Mr. JAHODA. What impressed me or what caught my ear, I heard a gentleman on television on "Crossfire" Sunday night, very savvy, articulate guy, he's a prepaid hustler for the Gambling Association, and he was asked three or four times by a very astute woman, "Why don't you use the word?"

Mr. HOKE. He is sitting behind you.

Mr. JAHODA. "Why do you use the word 'gaming' instead of 'gambling'."

I made a bet with a friend of mine. I said this gentleman will eat his children before the word "gambling" passes his lips, because you can't use the word "gambling," you have got to describe it as “gaming." That's just part of the ploy. That is just part of the busi

ness.

Mr. GOODLATTE. Is there any type of gambling, any of the particular activities people participate in, that's better than other gambling?

Mr. JAHODA. Myself?

Mr. GOODLATTE. Yes.

Mr. JAHODA. I played a little bit of poker as a young boy.

Mr. GOODLATTE. No, I am talking about the merits of these different type things. Some of them are illegal, some are legal, some are legal in some places, illegal in other places. Is there any particular type of gambling that is better than others that would be deserving?

Mr. JAHODA. There are some parts of gambling that are less worse than others in that particular sense where you can kind of change your odds on the fly, where you will lose slower.

Mr. HYDE. If the gentleman would yield, the stock market's a gamble, isn't it? And that's supposed to be very respectable. But people invest in the hopes that it will go up, they can sell, and make some money.

Mr. GOODLATTE. If the gentleman will allow me another moment, since my time has expired, let me say that when you invest in the stock market, you are buying something, and, yes, the value of that may change over time, but I don't see that that is at all comparable to putting money down on the chance that that wheel is going to turn in your favor.

Mr. HYDE. No. You asked about good gambling. It would seem to me, investing in the stock market, you may not want to attach the word "gambling" to it, but

Mr. GOODLATTE. I don't.

Mr. HYDE. I do. I think it has some of the aspects of risk-taking. Mr. GOODLATTE. I think some of it can be created that way, yes. Mr. HYDE. The gentleman and I know that "gaming" is an appropriate euphemism for "gambling," just as "undocumented alien"or "undocumented worker" is used. In fact, we don't use "senior citizen" around here anymore. We say "chronologically gifted.

In any event, may I just suggest to the two marvelous, patient gentlemen waiting, we have six more witnesses and we have spent a lot of time with Mr. Jahoda, and rightfully so, because he has a fascinating story to tell.

But I would implore my two colleagues, without in any way mandating it, that they ask a targeted question so Mr. Jahoda can be

released and we can get to the other six witnesses who have been patiently waiting.

So Mr. Hoke, the gentleman from Ohio.

Mr. HOKE. Well, since unfortunately I had other places to be earlier, I didn't have a chance to say anything on the record, and rather than ask Mr. Jahoda any questions though I find his testimony fascinating—I am going to use 2 minutes of my 5 minutes just to make some observations. It seems to me that in this area of gambling we have made the same kinds of mistakes that we have made in connection with other vices that we find to be noxious in a general way but at the same time clearly have a market.

And so trying to balance the desires or the market-driven predilections of the citizens of the United States against the harms that these things can do, we have made them legal.

But I think that where we have made the mistake is in not regulating advertising. It seems to me that after Prohibition, which was a dreadfully stupid experiment, we had the opportunity to say, well, look, obviously there is a market for booze, and people want to be able to drink alcoholic beverages, and they should be allowed to drink alcoholic beverages, but there is no reason that we should sanction the glamorization of that and the promotion of that in a way that is legal.

So it strikes me that we had an opportunity to outlaw advertising but we didn't take advantage of it. I guess we did not realize just how powerful advertising would become in the era of four-color process printing, television, and mass communication. We had the opportunity then to say we were going to make all of these beverages completely legal, but the industry would not be allowed to advertise them.

We moved in that direction when we made it illegal to advertise hard spirits. It is actually not illegal, it is more by agreement with respect to the advertising of hard spirits on television and radio. But still, if you tune into any athletic event, you are going to see a very, very, not-so-subtle attempt to manipulate the minds of very impressionable young people that the use of alcohol is glamorous. The same is true with respect to tobacco. And as a Congress, we said some 30 years ago that we will no longer allow tobacco to be advertised on television and radio. We did it pursuant to the powers that we have over the federally regulated airwaves.

I would go further. I would make it illegal to advertise tobacco products in any way whatsoever or name-brand materials that are tobacco products in any way whatsoever, and I think the same is true or should be true with respect to gambling. Because what you have seen in gambling is that there was actually an intelligent choice to move the numbers racket—that is, the illegal lottery-toward a legal lottery.

We have a long and checkered and kind of interesting history of lotteries in this country going right back to prerevolutionary days. The idea was to get gambling out of the hands of the illegal bookmakers and the mobsters, and instead put it in the hands of the State. And there is arguably a good social purpose to that.

But what has happened is that we ended up with an extraordinarily regressive tax. And there has been a mushrooming, an ex

plosion of lottery revenues, as a result of that. That is where we are today.

I think it will be very, very different if we say no advertising under any circumstances in the States, across States, et cetera, et cetera, and then people that really want to seek this out can. That is fine. But the brainwashing and the kind of overwrought and extremely persuasive techniques that can be used by mass advertising should not be available to gaming, gambling, or whatever other euphemistic expression you want to describe it.

There is a lot of money at stake, and we are going to hear people that will undoubtedly say that their first amendment rights are somehow being abrogated by that. And we are about to hear my chairman say that I didn't use 2 minutes of my 5 minutes, but in fact have used them all. I thank you for your indulgence, Mr. Hyde. Mr. HYDE. Time just slips by when you are talking, Mr. Hoke. Mr. HOKE. Oh, well, thank you so much.

Mr. HYDE. It is always interesting.

And so the next speaker, the next-I am sorry-the next Member to question the witness is Michael Patrick Flanagan of the great city of Chicago.

Mr. FLANAGAN. Thank you for coming, Mr. Jahoda.

Mr. Jahoda, I will try to use only 2 of the minutes here because we do need to move on. We have got many panels and many people today.

Mr. JAHODA. I am having difficulty hearing you, Congressman. Mr. FLANAGAN. Is that better? Can you hear me now?

Mr. JAHODA. Yes, thank you.

Mr. FLANAGAN. OK. You have very deftly drawn no difference or at least evaded the difference between legal and legalized gambling by calling them both bad and having very bad attributes and causing very difficult hardships on various communities.

That is a question that this committee will take up in the context of the 10th amendment versus the commerce clause or article I, section 8, matters and the ability of the Federal Government to impose upon the States certain rules and regulations. Those are issues that we will undoubtedly engage in, in our titanic debate over whether we will legislate gaming or gambling or the stock market, whichever we are calling it today.

But I would like to solicit from you some specific information that you possess that will help us. I think that in the area of legitimate versus illegitimate gambling, legalized versus illegal gambling, a lot it has to do with who controls it; a lot of it has to do with who owns it.

I would offer you that many of the casino owners in Vegas are legitimate businessmen, if not all of them; that the riverboat owners in Illinois are legitimate businessmen, if not all of them; the reservation gambling by the Indians is certainly run on an up and up, four-square basis. The native Americans are scrupulous in that. I would further argue that the lotteries run by the various States are run by legitimate, honest people. If you believe otherwise, could you tell us so?

Mr. JAHODA. I believe that, as I said earlier, that the industry itself has done a magnificent job of policing itself and cleaning it

self up. But I have only one concern, and I could be-I could be wrong. My information may not be correct.

I had read at one time that the casino doing the most business per square foot in the country is this Foxwoods up in the New England States someplace. Now, it's my understanding-I really hope my information is wrong-is that the owner of that contract is a— I am trying to think of the word for it, but a group of businessmen from the country of Malaysia that literally own the proceeds of that, the net profits out of that casino, and I can't imagine how the biggest casino in the United States can be shipping money to Malaysia in a 55-gallon oil drum. That kind of—that kind of goes over my head.

So I can't speak for how they run their businesses in Malaysia, but everything that's happened in the States that I have seen-and I am no authority; you will have authority on those subjects later in the day-that's one aspect of the industry where they deserve to be proud of themselves. They have done a tremendous job of licensing.

Mr. FLANAGAN. Then on the other side, if I may just ask one last question, Mr. Chairman-on the illegal side, again, you have it owned by the most disreputable, unsavory criminal people imaginable, and into that web are pulled perhaps and maybe you can tell us about crooked lawyers, crooked judges, crooked politicians, prosecutors, and others who salt that industry with its pernicious evilness through an area where the locality has decided that gambling is not something that they will have there.

I am sure that you could testify as to the validity of what I have just said. But I think there is a distinction that needs to be drawn, is that if the locality, in its own wisdom, desires to have gaming, gambling, or the stock markets, as the case may be, I don't understand how that is going to build the criminality of it based upon the testimony just given us that they have done a terrific job in policing themselves.

Mr. JAHODA. As I mentioned, all forms of gambling, once you have got cash, you have got people gravitating; even legitimate businessmen get corrupted, trying to win that cash.

I think that there have been studies that have been done, particularly in white-collar crime, in fraud, embezzlement, where you can almost guarantee one-third out of every incidence period is related to gambling, legal or illegal. It doesn't make any difference; you get a tremendous incidence of that sort of crime. If people need to play, they need to pay in order to play, so you have got an underclass of crime that is needed to support the habit.

I can't go much more beyond that, but, as I say, I am sure other people that are coming up will. I just don't-I am I just don't have the background to give you a complete answer. I just know what my exposure has been over the years, what I have witnessed. Mr. FLANAGAN. Thank you, Mr. Jahoda.

Thank you, Mr. Chairman.

Mr. JAHODA. Thank you, sir.

Mr. HYDE. I thank the gentleman.

Mr. Jahoda, we have come to the end of the questions and your testimony. I want to thank you for very valuable testimony, interesting but valuable and important, as we determine whether to

pass legislation creating such a Commission, and I really admire you for coming forward at some risk. So I want to thank you on behalf of the committee.

Mr. JAHODA. I want to thank you very much, Mr. Chairman. I also want to thank you personally because I know you-I know you went out of your way to get me here, and I am very, very grateful for that.

Mr. HYDE. Not at all.

Mr. JAHODA. And thank you, ladies and gentlemen of the Congress. It has been a pleasure for me to be here.

Mr. HYDE. Thank you, sir.

If the people would stay seated while Mr. Jahoda leaves, and we will get the furniture movers. There are some easels to be set up. Shall we set those up now?

While the staff is setting up the easels for the displays, I would like to introduce our final panel which consists of six witnesses who have varying perspectives on this issue.

First we have a Mr. Paul Ashe, Paul R. Ashe, the president of the National Council on Problem Gambling in Altamonte Springs, FL. Mr. Ashe will speak to the problem of compulsive gambling.

We also have an old friend, Mr. Frank Fahrenkopf, Jr., who is president and chief executive officer of the American Gaming Association. This association represents the operators of casinos and the manufacturers of the equipment used in them.

Next are Mr. Tom Grey, the executive director of the National Coalition Against Legalized Gambling; and Prof. Earl Grinols, Department of Economics, University of Illinois. Both of these gentlemen are from my home State of Illinois, and I am particularly glad to have them here.

We also will hear from Richard G. Hill, chairman of the National Indian Gaming Association. Mr. Hill represents the interests of the Indian tribes that have gambling operations, and we are certainly glad to have him here.

And finally, from my hometown of Chicago, we are going to hear from Jeremy Margolis, who will speak to the crime issue from the perspective of those who favor gambling.

If the gentlemen would take their places, please. Very well. We will start off with Mr. Ashe.

Mr. ASHE. Good afternoon, Mr. Chairman, members of the subcommittee.

Mr. HYDE. Let me suggest that each of you take 5 minutes, give or take all, part of the 5, and then your statements, full statements, should you wish, will be placed in the record, and then there will be questions where you can expand. But we do want do hear from everybody.

Mr. Ashe.

STATEMENT OF PAUL R. ASHE, PRESIDENT, NATIONAL
COUNCIL ON PROBLEM GAMBLING, INC.

Mr. ASHE. Thank you, sir.

The National Council on Problem Gambling and its 25 State affiliates are nonprofit corporations and take a neutral position on legalized gambling and neither support nor oppose any gambling activities. The national council was originally formed in 1972 and