Daily Fantasy Sports Is Internet Gambling and Illegal

220px-TheprocessionofthetrojanhorseintroybygiovannidomenicotiepoloOn Nov 10 2015  NYS Attorney General Eric Schneiderman  announced that his had issued  a cease and desist order to  Fan Duel and Draft Kings, the two largest operator of Daily Fantasy Sports.  He gave them five days to voluntarily close, which they did not do. The November 10 order  got  much  notice in the NY papers, with an editorial in the NY Times essentially supporting it,  though talking about “strict regulation.”   The Daily News had a 2-page news article      and an  editorial saying that the AG is correct, plus  an op-ed. The news article had a sidebar by the writer of this post..  The Post had a front page article, though their editorial took issue with  the AG’s action.

The Times article on Nov 11 provoked a flood of comments, most angry at the decision.    Dissenters generally used one or more  of four basic  arguments (1) skill is involved; so, it’s not gambling  (2) the NYS lottery holds a much higher proportion  of users’  losses  than do DFS operators,  yet the AG does not try to enjoin it  (3)  no one is being hurt by participation (4) the AG wants to get money for the state by imposing regulation.

My comments on these comments:

“Skill”  certainly determines success, but relatively  few participants have that skill,  It lets them  exploit the vast majority.  As the AG memo below says, this is still gambling.  Take a few minutes to watch TV satirist John Oliver on this.  A recent lawsuit in Alabama gives a another useful perspective on gambling.

The NYS Lottery is an abomination,  but it is technically legal with enough seniority in that status that even I can’t fault the AG for not now going after every aspect of it.  The floridly illegal aspects, like hybrid table games with physical dice,  I do wish he would challenge.

Full-blown cases of gambling addiction already spawned by DFS are not numerous, are still largely hearsay to my ears. It is still early.  Yet  the exploitation of  “fish”  (less expert participants) by “sharks”  with their computer routines is no less predatory than the behavior of a casino or a state lottery.  It’s just that in DFS there are two types of predator,  not one.  Besides the operator there are the sharks. The ad blitz of the last few months is meant to recruit  millions of fish by deceptive advertising.

To the fourth argument   I would reply that  the AG has not proposed to regulate DFS.  He has said they are illegal and should stop operating in NYS.  Devising regulations to legalize is not his job.  His motivation is to protect New York’s people from being exploited by illegal gambling and to enforce existing regulations.  It is up to  the legislature to regulate.

Daily Fantasy Sports herniated through a loophole in the 2006 Unlawful Internet Gambling Enforcement Act and should be surgically reduced.  It is  a strong bridge to two activities that are at this time illegal in New York State and in most jurisdictions in this country: internet gambling not on sports, such as i-poker or internet casino “games” and betting on sports.  The bridge could reach  further,  to the gambling entrepreneurs’ promised land of legalized internet betting on sports.  DFS should not be “regulated.”  It should stay illegal.

Below is a forwarded message from the AG to the public and press,  a strong summary.

If you read this post, please send a comment to the AG to counter the pickets and telephone chains of complaint his office has been dealing with from DFS partisans.

Click here for a link to the AG’s office

Below is a press release from the AG dated November 17.  On Nov 19 Mr.  Schneiderman had an op-ed in the Daily News that complements the press release.  Either is a great source for writing a letter to the editor of a paper near to you.

News from Attorney General Eric T. Schneiderman

November 17, 2015

New York City Press Office / 212-416-8060
Albany Press Office / 518-776-2427
Twitter: AGSchneiderman


NEW YORK—Attorney General Eric Schneiderman filed an enforcement action this morning in New York State Supreme Court in the County of New York, seeking a preliminary injunction against DraftKings and FanDuel.  The Attorney General’s suit details alleged violations of law by DraftKings and FanDuel.

The Attorney General’s memorandum of law and complaint against DraftKings can be found here and here. A copy of the memorandum of law and complaint against FanDuel can be found here and here.

The following are excerpts of the memorandum of law filed by the Office of the Attorney General:

  • The New York State Constitution has prohibited bookmaking and other forms of sports gambling since 1894. Under New York law, a wager constitutes gambling when it depends on either a (1) “future contingent event not under [the bettor’s] control or influence” or (2) “contest of chance.” So-called Daily Fantasy Sports (“DFS”) wagers fit squarely in both these definitions, though by meeting just one of the two definitions DFS would be considered gambling.  DFS is nothing more than a rebranding of sports betting. It is plainly illegal.
  • Yet FanDuel and DraftKings insist that DFS is not gambling because it involves skill. But this argument fails for two clear reasons. First, this view overlooks the explicit prohibition against wagering on future contingent events, a statutory test that requires no judgment of the relative importance of skill and chance—they are irrelevant to the question. Second, the key factor establishing a game of skill is not the presence of skill, but the absence of a material element of chance. Here, chance plays just as much of a role (if not more) than it does in games like poker and blackjack. A few good players in a poker tournament may rise to the top based on their skill; but the game is still gambling.  So is DFS.
  • FanDuel and DraftKings’ current denials about DFS constituting gambling are belied by how the sites depicted themselves in the past and how they portray themselves behind closed doors.  FanDuel’s DFS contests were designed by a veteran of the legal online betting industry in the United Kingdom, Nigel Eccles.  The company admitted to an early investor that its target market is male sports fans who “cannot gamble online legally.”
  • DraftKings depicts itself to investors in a similar fashion. For example, in one investor presentation, DraftKings pitched itself to a prospective investor by noting the “Global opportunity for online betting,” pointing to the massive revenue of the “global online poker market,” and making direct comparisons throughout the presentation to poker and sports wagering.
  • The CEO of DraftKings previously spoke openly about DraftKings as a gambling company.  He called DFS a “mash[-]up between poker and fantasy sports,” suggested that DraftKings operates in the “gambling space,” and  described its revenue model as “identical to a casino.”
  • The rejection of the gambling label by the DFS sites is particularly hard to square with the overt strategy of recruiting gamblers. For FanDuel, this has meant hiring a former top executive from Full Tilt, the online poker company, and affiliating with gambling industry stalwarts like “Vegas Insider” and BetVega, a sports betting and handicapping website. For DraftKings, this has meant aligning itself closely and negotiating sponsorships with other gambling ventures, like the World Series of Poker and the Belmont Stakes.
  • DraftKings has also embedded gambling keywords into the programming code for its website. Some of these keywords include “‘fantasy golf betting,’’ “weekly fantasy basketball betting,” ‘‘weekly fantasy hockey betting,” “weekly fantasy football betting,” “weekly fantasy college football betting,” “weekly fantasy college basketball betting,” “Fantasy College Football Betting,” “daily fantasy basketball betting,” and “Fantasy College Basketball Betting.” This increases the likelihood that search engines, like Google, will send users looking for gambling straight to the DraftKings site.
  • FanDuel’s advertisements commonly showcase testimonials from ostensibly ordinary DFS players (g.,“Zack from Fairfield, California”), and play up the ease of playing and of winning huge cash prizes…The reality is that like poker, blackjack, and horseracing, a small percentage of professional gamblers use research, software, and large bankrolls to extract a disproportionate share of DFS jackpots. With poker and DFS, professional players, known as “sharks,” profit at the expense of casual players, known as “minnows.” The numbers show that the vast majority of players are net losers, losing far more money playing on the sites than they win. DraftKings data show that 89.3% of DFS players had an overall negative return on investment across 2013 and 2014.
  • While irresponsibly denying their status as gambling companies, the DFS Sites pose precisely the same risks to New York residents that New York’s anti-gambling laws were intended to avoid. Experts in gambling addiction and other compulsive behaviors have identified DFS as a serious and growing threat to people at risk for, or already struggling with, gambling-related illnesses.
  • Jeffrey L. Derevensky, Director of the International Centre for Youth Gambling Problems and High-Risk Behavior at McGill University, notes that, among other things, false or misleading representations of the skill involved in DFS “can lead players to a preoccupation with DFS, chasing of losses, and developing symptoms and behaviors associated with a gambling disorder.”

The illustration reproduces  a painting by Tiepolo with a timeless theme.  The opinions expressed in this post, aside from the quote by the AG’s office, are entirely those of the editor, Stephen Q. Shafer and do not necessarily reflect those of any or all other members of Coalition Against Gambling in New York.  Permission to reproduce in full or in part is hereby granted on condition that the permalink above is cited.



From the Front Lines Against Predatory Gambling

Nelson Acquilano photoA Stop Predatory Gambling National Day of Action in Geneva NY 26 September 2015 was co-sponsored by  CAGNY, Women’s Interfaith Institute, Geneva Assembly of God “Celebrate Recovery,” Phelps Baptist Church, and Concerned Citizens of Seneca County (CCSC).       Nelson Acquilano. LMSW, MPA, MA gave the audience his views on the untrue assertion that making  predatory gambling more convenient benefits the community and the region.  Mr Acquilano (pictured) is on the Board  of Directors of CAGNY.

” My name is Nelson Acquilano. Many of you know me because of the work I have done in the Finger Lakes and because of the many different human service groups and agencies I have worked with over these past 40 years.

We have a terrible problem in New York. Our families, our communities are in great crisis. But this is not an economic problem. No, New York has a Quality of Life Problem… and it is a real crisis for our families and our community.  It will only further decline if we allow it.

New York has a high rate of crime…. a high rate of divorce, high rates of child abuse, academic underachievement, teen pregnancy, and drug abuse.….. our jails are full, our schools are faltering, and our families are failing. Now given this background, the introduction of gambling in New York is contra-indicated.

Given these community problems, to allow a known environmental carcinogen such as gambling into an otherwise delicately balanced community… to take a powerful risk factor, a known risk factor — and allow it to flourish will only further undermine the healthy families and healthy communities we are trying to build and maintain.

Gambling is one of the most destructive dynamics that can be introduced into a community, and when it is – it spreads like a cancer – like an epidemic, leaving broken lives, broken families, and broken communities in its path.

All states that have legalized gambling have found subsequent dramatic increases not only in the incidence of compulsive gamblers, but in crime, family dysfunction, divorce, bankruptcy, and mental illness. But by then it’s too late. Once legalized, communities cannot reverse the trend and control the increase in the gambling addiction and negative consequences.

Compulsive gambling leads to many thousands of personal and family bankruptcies each year. It leads to lost homes, broken families, lost savings accounts, lost college funds, and to a dramatic increase in crime including embezzlement at business. It is strongly correlated with mental illness, and also seriously affects the spouse, children, parents, and friends of the problem gambler.

Some states have reported that divorce tripled after the introduction of casinos. Others reported an explosion in domestic violence.

Other research shows that gambling is indirectly subsidized by the taxpayers. For every dollar that gambling contributes in taxes, it usually costs the taxpayers at least 3 dollars (and higher numbers have been calculated) because of major increases in the welfare system, mental health system, and the criminal justice system. The ultimate cost in broken families and disintegrated communities from gambling never even comes close to justifying it as a means to raise revenue.

Gambling is exploding across America but America is not ready for the consequences.

The National Council on Problem Gambling has found that pathological gamblers have a suicide rate twenty times higher than non-gamblers.

Now if we could stop an epidemic – something that would destroy tens of thousands of families wouldn’t we have an imperative – a compelling moral and ethical responsibility to serve and protect our families?

And that is why I am against gambling anywhere in New York State, but especially in the Finger Lakes. Studies show that the negative consequences impact not just upon the host community, but all communities within a 50 mile radius…. the region I have served for the last 40 years. Gambling is simply the worst strategy for a delicate community.

I would like to leave you with a few final points:

1) It never ceases to amaze me how the moral and ethical implications of gambling are so easily dismissed. When I see casino owners say that the future of gambling is with our youth and we need to have more youth gamble, when I see a casino that comes out and targets women to get more women to gamble, when I see a casino develop a youth program to get more college students to the tables….. then I need to question the morality of that entire industry.

In fact, one college Chaplin told me he is increasingly experiencing college students with a high percent of gambling issues – losing their tuition and room and board monies.

And by the way, a couple of years ago, researcher Natasha Schull who wrote the book “Addiction by Design” was in Rochester. She explained how the gambling industry models psychological experiments on rats for behavior modification techniques on humans, to increase time – and money spent – sitting and playing at slot machines.

She explained extensive studies on Time-on-Device, on algorithms of “Intermittent Positive Reinforcement”, and on how the gambling industry studies the best variance of high-frequency low payout wins and low-frequency high payout wins to keep you gambling. These are some of the strongest shapers of human behavior.

And today’s slot machines are actually learning your preferred method of play….. it hasn’t reached the level of artificial intelligence yet, but according to Natasha… the machines are studying YOU.

There are some 30 organizations opposed to casino gambling in New York, including:- The Institute for American Values

The New Yorkers Family Research Foundation

–   the Roman Catholic Church

– the Episcopal Church

– the United Methodist Church…

– the Baptists….
– the Interfaith Impact of New York State, and

– the New York State Council of Churches!

The Catholics….. Methodists, Baptists and Episcopal Churches are all publicly on record as denouncing the expansion of gambling…..   and I don’t know about you… but I prefer to listen to them for my spiritual health and wellness.

2) Second, the gambling industry follows a business model – that model is all about growth and expansion….. to survive, profits need to grow, which means more and newer ways to gamble… and more and newer ways to get non-gamblers to the table.

At the Senate Hearing one gambling company was asked if they are concerned about the proliferation and saturation of gambling, and their response was “no”, that is not a concern of ours.

Well let me say that it is a concern of ours! And it is already happening. There are all types of efforts to expand gambling throughout New York State. We’ve opened Pandora’s Box.

There is one Italian City, Pavia, that has so much gambling, that it has surpassed most every other city for debt, bankruptcies, depression, domestic violence and broken homes.
It is devastating to the community, and now the people said they have had enough and are trying to pass legislation to curb gambling.

3) And third, if you take a look at the true voting outcome for Proposition I, even with all the manipulation and irregularities to get the voters to vote for it….. Proposition I was voted DOWN in the central Finger Lakes region:

If you include….. Ontario County, Cayuga County, Monroe, Onondaga, Schuyler, Seneca, Wayne and Yates Counties….. 125,031 voted to pass Prop I, but over 126,648 voted against it!

Developers wanted to put a casino in Rochester, but the people defeated it….. they wanted to put a casino in Syracuse, and the people defeated that…. And now they are trying to put one here in the Finger Lakes….

I believe that local citizens groups should be honored, not demonized, for their fight against a proposed casino.

You know, Governor Cuomo accepted some $715,000 from the gambling industry prior to changing the constitution, although he did not include gambling in his pre-election platform. According to Common Cause, over $47 million had been spent on lobbying and campaign contributions to other senators and assemblymen by the gambling industry prior to the changing of the NYS Constitution.

And there have been other discrepancies and irregularities, even with Proposition I itself.

I have reviewed over 100 gambling studies and articles, and I have yet to find one that says that gambling helps to build positive youth development. I have yet to see one that says that gambling supports healthy families. I have yet to see one that says that gambling builds strong communities… in fact, they all say exactly the opposite.

When local groups t recognize the real environmental impact – the human costs, and decide to commit themselves to fight such a devastating dynamic as casinos present, then I applaud their work….. and ask our representatives to remember that the fundamental purpose of public service is for the health, safety and welfare of our residents… and there is nothing about gambling that supports the health, safety and welfare of the people.

Thank you.”

Permission is hereby given to reproduce the words of the above text in whole or part as long as the above permalink is cited and Nelson Acquilano is credited as author.

If the casino comes to town


Aerial view of proposed Tyre casino site April 7 2015,

Remarks by Robert H. Steele   at the Stop Predatory Gambling National Day of Action event in Geneva NY,  26 September 2015,  Geneva is a few miles from Tyre, NY

“Although I’m from Connecticut, I should to tell you at the start that I feel a special connection to the Finger Lakes region for two reasons. First, because my wife went to Wells College on Lake Cayuga and I spent many, many enjoyable weekends here getting to know the area. And second, we in CT are very familiar with the Wilmorite group, because it financed an effort to open an Indian casino in Connecticut. That effort ultimately failed because the tribe in question could not prove it qualified for federal recognition.

I also appreciate your interest in my book – The Curse: Big-Time Gambling’s Seduction of a Small New England Town. The book is a fact-based novel set against the explosion of casino gambling in Connecticut during the 1990s, when Congress and the courts opened the door to the construction of the world’s two biggest casinos in the southeastern corner of my state.

In the end, The Curse is a cautionary tale about a small, quintessential Connecticut town that faces a Faustian dilemma in which it must choose between preserving its character and values or accepting an enormously seductive offer that would change the town forever – in other words, a story that has played out in one way or another in hundreds of communities across America and is playing out in Tyre today.

In 2013, the Institute for American Values, an independent think tank in New York, released a landmark report about the impact the spread of casino gambling is having on the nation.

The report began with this powerful statement:

“From time to time in American history, a new institution takes root across the country, and in doing so, changes the nation—changes the physical landscape of communities, impacts the patterns and habits of daily life, and affects citizens’ and communities’ economic outcomes…Something of this magnitude is now occurring in the United States. It is the spread of casinos.”

For many local people, the first thing that would probably come to mind in hearing this opening statement is the way Wilmorite’s proposed $425 million Tyre casino would impact the physical environment – including the nearby [Montezuma] National Wildlife refuge, federal and state protected species and habitat, as well as traffic congestion, noise, and air quality. The developer and key local officials evidently thought so little of these issues that they tried to get by with a slipshod environmental impact study, but in a stinging rebuff, the N.Y. State Court of Appeals ruled that their study did not meet state requirements.

As important as the environmental impact would be, however, I would like to zero in on the social and economic impact of what is being proposed for Tyre, using what is happening in Connecticut and elsewhere as background.

Connecticut’s two casinos, Foxwoods and Mohegan Sun, got off to blistering starts. With no significant competition other than in Atlantic City, 250 miles away, they quickly grew into the two biggest casinos on the planet, drawing more than half their combined customers from out of state, creating over 20,000 casino jobs, and sending hundreds of millions of dollars a year in slot revenues to the state treasury.

Today, however, the bloom is off the rose for Connecticut’s casinos as the Northeast fills up with competing casinos, fewer and fewer out-of-staters come to CT to gamble, and the out-of- state money that fueled CT’s gambling boom, and that of other early casino states, increasingly dries up.

Thanks to the growing competition, the combined revenue for CT’s two casinos is already down 38% from its peak. The casinos have eliminated 8,000 jobs and have been increasingly replacing full-time jobs with part-time jobs to reduce wage costs and eliminate medical benefits, while Foxwoods has stopped all profit-sharing payments to its tribal owners and is mired in debt.

The story is similar elsewhere, with growing competition cutting into the profits of casinos and changing the dynamics of the casino business in more and more states. For example, Delaware has had to put millions of dollars toward bailing out its 3 casinos, while New Jersey has spent hundreds of millions trying to prop up its casinos, only to see a third of them close in the past 20 months. In Ohio and Maryland, casino revenue is roughly 40% below original projections.

As the casinos’ profits slide, we have also been getting a clearer picture of the overall economic and social downside of what has happened in Connecticut.

First, with less out of state money coming in, an increasing percentage of the casinos’ profits and resulting state revenue is coming from the gambling losses of Connecticut residents, resulting in what Nobel Prize-winning economist Paul Samuelson called “the sterile transfer of money” from one group to another without creating any net new value.

Second, even with all the out-of-state money that came in in the past, the Connecticut casinos did little to create spin-off businesses, but did cannibalize other businesses.

One example of cannibalization actually involved a good friend of mine who owned one of the region’s most successful restaurants and who I never saw more excited than when one of the casinos opened nearby. He thought the casino would be great for his business, that with all the people coming down from Boston and up from New York, surely hundreds of them would stop at his restaurant every week.

Unfortunately, it didn’t work out that way, and I remember what he told me when he closed his restaurant because of competition from the casinos. “I have to admit,” he said sadly, “that I had no idea how the casinos actually work. But now I understand. People drive to the casinos, play at the casinos, go to shows at the casinos, stay at the casino hotels, eat at the casino restaurants, and then fill up their gas tanks at the casino gas stations and drive home. We as local merchants rarely see any of them.”

As casino mogul Steve Wynn once told a group of Connecticut businessmen when he was trying to put a casino in Bridgeport: “Get it straight, there is no reason on earth for any of you to expect for more than one second that just because (people come to my casino) they are going to run into your store or restaurant.”

And third, there is little evidence that casinos ultimately strengthen state or local government finances. Connecticut receives 25% of its casinos’ slots profits, which has provided the state with over $6 ½ billion in revenue in the past 22 years. Yet CT today is in the worst financial shape in its history, with a lagging economy and the third worst debt and unfunded liability ratio of any state.

And then there are the social issues.

For starters, the casinos have created a pervasive gambling culture in southeastern CT and they were followed by a steep increase in the number of CT residents seeking treatment for gambling addiction, with an attendant increase in debt, bankruptcies, broken families and crime.

One of the most remarkable findings from a 2009 state-sponsored study was that there had been a 400% increase in arrests for embezzlements in Connecticut since the casinos opened, a rate of increase 10 times the national average.

One of the embezzlers, incidentally, was my tax collector in the town of Ledyard, where Foxwoods is located. She stole $302,000 from tax receipts to play the slots at Foxwoods. And of course she didn’t win. Indeed, statistically it is almost impossible to win when the casino takes up to 10% of everything you bet over time. I should note that the embezzler, who was sentenced to prison, had a pristine record as an individual and public servant before she became hooked on slots.

There were so many embezzlement cases in southeastern Connecticut, in fact, that a columnist for the New London Day newspaper described the region as the embezzlement capital of America.

Recent embezzlement stories range from a Bridgeport elementary school principal charged with taking $10 thousand in student funds to gamble at Mohegan Sun to the chief financial officer of the town of Winchester, Connecticut stealing over $2 million from that town and losing much of it at the state’s casinos. The Winchester embezzlement was so serious that there was talk of the town having to temporarily close its school system.

Looking at crime overall, a 2014 study from Western CT State University shows that the number of violent crimes (including murder, rape, robbery and aggravated assault) increased in nearby towns after the casinos opened DESPITE A SHARP DROP in violent crime nationally and CT as a whole, while interviews with local police and judicial officials indicated increases in non-violent crimes such as prostitution and illicit drug use.

As far back as 1997, Congress became so concerned about the spread of casino gambling that it set up a National Commission to study the issue. Based on its findings, the Commission recommended that there be a moratorium on opening new casinos until the government could get a better handle on their social and economic costs.

But the recommendation was never implemented, and casinos have continued to multiply as state governments have invited them into their states to raise revenue without having to openly raise taxes.

In the process, casino gambling has become a $67 billion industry, with casinos arguing that they spur economic development and provide state and local governments with much-needed money.

But both economic studies and experience refute those arguments.

In fact, looking at all the evidence, the 2013 Institute for American Values report concludes that the regional and local casinos springing up across the nation drain wealth from communities, weaken nearby businesses, hurt property values, and reduce civic participation, family stability, and other forms of social capital that are at the heart of a successful society.

At this point, one might think states would begin to recognize the shortsightedness of depending on casino revenue. But that’s not what’s happening. Instead, state after state has become so hooked on casino money that it is seeking to expand gambling either to increase gambling revenue or replace the gambling revenue it is losing to cross-border competition.

And that is precisely what is happening in CT. The state began by increasing Foxwoods’ and Mohegan Sun’s FREE PLAY ALLOWANCE so they could beef up promotions and attract more customers; the state legalized the casino game KENO for restaurants, bars, and convenience stores, and the legislature has passed a bill which would allow construction of the state’s third casino and which could quickly lead to two more casinos after that.

Casino expansion advocates argue that the so called “convenience” casinos would help keep CT gamblers from going to MA and NY to gamble and thereby protect CT casino jobs and revenue. What they carefully avoid discussing, is that one or more new casinos would create thousands of new Connecticut gamblers and encourage current Connecticut gamblers to gamble more frequently, leaving CT residents with even less money for other goods and services and further adding to the state’s social problems.

Moreover, with both government and investors constantly pushing for new ways to make money from gambling, there is no reason to think that CT’s gambling expansion would stop there.

For example:

Video slots are beginning to spread beyond casinos into local neighborhoods in many states. There are now some 12,000 video slot machines at so-called “lottery delis” in Oregon, and more than 20,000 video slots at bars, restaurants, truck stops, fraternal clubs, gaming cafes, and even 2 flower shops in Illinois.

Next, there is a strong effort underway to expand legalized sports betting in the United States, including on daily Fantasy Sports.

And finally, thanks to a 2011 U.S. Justice Department ruling, New Jersey, Delaware, and Nevada have legalized in-state online betting for their casinos, and other states, including NY, are considering legalizing Internet gambling as well.

In short, the lesson across the country, and the lesson we are increasingly learning in Connecticut, is that each new expansion of legalized gambling is followed by increased pressure for still more gambling, and the only way to stop it is for individual citizens like you and me to stand up and say to our government leaders: STOP!

STOP trying to expand gambling in my state and trying to bring it into my community.

Stopping it is admittedly an enormous challenge – a true David and Goliath fight. The casino developers and gambling promoters have enormous financial resources which they use to dominate the public debate, gain political and government support, and overwhelm the opposition, while average citizens typically have little money with which to fight back.

For instance, in last fall’s statewide referendum in Massachusetts on whether to repeal the law allowing casinos in that state, casino interests ran a reported 4,000 TV ads in the last month of the campaign in a successful effort to kill repeal, while those supporting repeal were unable to afford any TV time. Then this summer, the developer seeking to put a casino in Brockton, MA reportedly outspent a coalition of churches, civic groups and individuals by 450-1 in order to win a narrow victory there.

Yet, remarkably, casino opponents have recently won important victories in which they (1) stopped casinos from being legalized in New Hampshire, (2) defeated efforts to expand casino gambling in Rhode Island and (3) beat back casino proposals in Newport, RI; in West Springfield, Palmer, Milford, Tewksbury, Worcester, and East Boston, MA; and in Albany, East Greenbush, and Tuxedo, NY.

One of the saddest aspects about your battle against the proposed Tyre casino is the extent to which the developer has gone to try to keep you from speaking out against its proposal. Here is a giant real estate corporation which is spending a fortune on an army of designers, engineers, lawyers, consultants and publicists to break into Tyre to further enrich itself, yet criticizes Casino Free Tyre for trying to raise a modicum of money to defend its town.

It is truly an act of monumental hypocrisy and demonstrates how worried the developer is about your ability to persuade others to actively join your fight and demonstrate to the State Gaming Commission how strong the opposition among everyday citizens is to the proposed casino. Hopefully the casino advocates’ tactics will encourage you to redouble your efforts to speak out, to recruit your neighbors, to reiterate your opposition to the casino to the Gaming Commission and town and county officials, and to support Town Board candidates who oppose the casino.

In defeating the casino in Palmer, MA, opponents used the slogan “The more you know about casinos, the less you’ll like them,” and used every possible means to explain to the community what casinos are really all about.

The opponents did a particularly good job of getting across the predatory nature of casinos, pointing out that multiple independent studies show that roughly half of a typical casino’s gambling profits come via problem gamblers, whether the money is their own, or they have begged, borrowed, or taken it from others. In other words, that the casino industry’s very business model is dependent upon preying on addicted gamblers.

That’s the nature of the business they want to bring to your community.

Palmer’s slogan pretty much said it all. “The more you know about casinos, the less you’ll like them.”

Thanks very much.”

Permission is hereby granted to reproduce the above text  in whole or in part as long as the permalink is cited and the speaker, Robert H. Steele, is credited.

Mr. Steele, a Connecticut businessman, is a former Representative to Congress from Connecticut who recently joined the Board of Stop Predatory Gambling.

Online Poker Hearing Misses the Point






The New York State Senate website has announced that the Senate Racing, Gaming, and Wagering Committee will ‘discuss the future of online poker in New York State’ at a hearing scheduled for 1:00 p.m. on September 9, Wednesday. ORAL TESTIMONY BY INVITATION ONLY

Coalition Against Gambling in New York believes that there should be no future for online poker.  Not invited to speak, we submit the statement below to  the record:

No form of internet gambling is now legal in NY. State Senator John  Bonacic’s bill S 5302 proposes to legalize internet poker. The upcoming  hearing looks like a shout-out to gambling interests*, including the Poker Players’ Alliance.  The Senator seems indifferent to social and constitutional legal issues about internet gambling.  According to Tight Poker,   his concern is how   it might profit NYS to legalize  i-poker ASAP.

Online poker is the thin end of the “legalization” wedge because some savants hold there can be enough skill in poker to make it  not gambling. They note that  a star  player may   win big over time, unlike a slot machine user. The vast majority  of players who aren’t stars, however, are certainly gambling. Outside “World Series” tournaments that draw skilled peers, the consistent big winners are sustained by  the predictable losses of the less apt, the more chance-tossed.

Ominously, were i-poker  “legalized,” other on-line games would likely follow. First would come those that have less, but still some, element of decision-making skill relative to chance than does poker. Later, with these precedents, would come casino “games” of pure chance, which everyone agrees are gambling.

If stymied by a future ruling that i-poker is gambling, the Senator may try a different tactic.   He knows that unless a bill to rebuild the longstanding federal ban on internet gambling passes soon, each state may make its own laws about internet gambling (except on sports). He may anticipate that the Legislature would concede him i-gambling after the trite argument that “Other states will be doing it; so, we should too and before them.” New York, however, has a constitutional prohibition against all types of gambling other than those that have been allowed in by amendment, most recently casinos. The Legislature has shown itself ever ready to re-define words like “lottery,” but it cannot amend the Constitution.  That would require a vote of the people, who have shown no special desire for internet gambling.

Article 1 § 9 . . .no lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling, except lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature, the net proceeds of which shall be applied exclusively to or in aid or support of education in this state as the legislature may prescribe, except pari-mutual betting on horse races as may be prescribed by the legislature and from which the state shall derive a reasonable revenue for the support of government, and except casino gambling at no more than seven facilities as authorized and prescribed by the legislature shall hereafter be authorized or allowed within this state; and the legislature shall pass appropriate laws to prevent offenses against any of the provisions of this section. (Amendment approved by vote of the people November 5, 2013.)

Sen. Bonacic will perhaps argue that i-gamblers can be required (the NJ model) to be registered with an  in-state casino, which they need never visit again.   He may assert that when “Prop 1” passed in 2013  it  implied this easy fix.  Plainly it did not.

Or, less likely, the Senator might try to graft internet gambling onto the New York State Lottery, requiring participants to register with a racino, not a licensed casino.

There are many arguments against i-gambling that we don’t take up here. Our focus today is on the wrongness of hearings that have nothing to do with whether internet poker should be made legal and everything with “When do we start?”  . Mr.  Bonacic acts as if legalizing internet poker in New York State is a mere formality, like closing a business deal with allies. Such arrogance should be called.

[*] In August, Tight Poker interviewed Sen. Bonacic about who had been invited to testify orally. “ ‘Lawmakers and various representatives of the gambling industry will be present at the hearing.’ Bonacic said: ‘I’m bringing in Caesars and MGM plus all of my [emphasis added] casinos, racinos, and OTBs. We are going to have a discussion on the pros and cons of moving the legislation.’ ”

Permission to reproduce this in whole or in part is hereby granted by cagnyeditor as long as the permalink above is cited.  The Trojan Horse painting is by Tiepolo.

The Curse




A Talk at Patchogue-Medford Library Long Island NY  July 30, 2015  by Robert H. Steele

Mr. Steele is a Connecticut business executive and former U.S. Congressman, and was a nominee for Governor of Connecticut.


Comment by CAGNY editor: This talk starts about  a book set in Connecticut but moves through many important issues about predatory gambling before homing in on a location in New York State now threatened with the imposition of a 1000-device slot parlor.  It is a privilege to present it here.

Thank you for the invitation to come to Patchogue and for your interest in my book, The Curse: Big-Time Gambling’s Seduction of a Small New England Town.

The book is a fact-based novel set against the explosion of casino gambling that hit southeastern CT during the 1990.

The novel begins with the Pequot War in 1637, when Connecticut’s Puritan colonists joined with their Mohegan allies to defeat and almost destroy the Pequots, who were the largest and most warlike of the Connecticut tribes. The story then jumps 350 years, as these two tribes reemerge to build the world’s two biggest casinos – Foxwoods and Mohegan Sun – and a Connecticut family, led by a descendant of one of the Puritan colonists, becomes embroiled in a battle to stop a third casino that threatens the family’s town and ancestral home.

In the end, a small, quintessential New England town faces a Faustian dilemma in which it must choose between preserving its character and values or accepting an enormously seductive offer that would change the town forever.

The Curse, in sum, is a novel based on fact, and this evening I’d like to focus on the factual background of what has occurred in Connecticut and elsewhere – in other words, on the story behind the book.

First, I should probably give you a little more of my background since it entered into my writing the book.

I represented eastern Connecticut in Congress in the 1970s. Then, after running unsuccessfully for governor, I left politics and my family – my wife and four children and I – moved to Ledyard, Connecticut well before anyone dreamed of casinos coming to Connecticut. Those two experiences – knowing Connecticut’s politics as intimately as I did and then living in the midst of the subsequent casino explosion – gave me a front row seat for watching the political maneuverings that led to the casinos and then seeing their impact.

Indian casinos got their start in 1988, when Congress passed the Indian Gaming Regulatory Act, which was seen as a means of promoting tribal economic development and self-sufficiency by allowing federally recognized tribes to open casinos on their reservations.

It would be fair to say, however, that Congress had no idea of the Pandora’s Box it was opening when it passed the act.

As it turned out, the law not only opened the door to Indian-owned casinos, but it spurred the legalization of commercial casinos as many states rushed to open casinos as way to raise revenue without directly and overly raising taxes.

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Bad add

Peering over the Edge Flickr CC

Peering over the Edge
Flickr CC


The message below was sent by e-mail on the morning of Jan 5, 2015 to Bradley Fischer, Esq.,  Director of Policy, Development and External Affairs, NYS Gaming Commission.




Coalition Against Gambling in New York (CAGNY) urges the Gaming Commission not to heed the Governor’s request to have its Facilities Location Board amend its recommendations announced Dec 17 and open the door to a second casino site in Region 5.

CAGNY believes that a casino cannot net for any region or sub-region the “benefits” touted by the interests that got “Proposition 1” passed in 2013. We believe that none of the three sites recommended on Dec. 17 will if built be anything but a detriment to the people in its locality and to the state. Thus we see no good reason for a second license in Region 5 or any other region. For that matter, we see no good reason for any license anywhere.

Please convey this message as soon as possible to the Chairman and members of the Gaming Commission.

With best wishes for a healthy 2015 for all,

Stephen Q. Shafer, M.D.. M.A., M.P.H..                                                                  Chairperson, Coalition Against Gambling in New York                                                         cell phone 917 453 7371                                                                                                        e-mail sqs1@columbia.edu or shpcount@earthlink.net

Permission is hereby granted to quote the above in full or in part at long as the permalink above is cited.



Hidden social costs of predatory gambling


Under the rug

Under the rug

Statement of Stephen Q, Shafer MD MPH to the Gaming Facility Location Board of the New York State Gaming Commission at the hearing in Poughkeepsie on Sept 23, 2014

My name is Stephen Shafer. A retired physician who now lives in Saugerties, I am Chairperson of Coalition Against Gambling in New York. I was born and brought up in Dutchess County, where my daughter and her family now reside.

Hudson Valley Casino and Resort has presented an analysis of health impacts as incomplete as an analysis of vehicle traffic limited to trucks. The report finds regional health care facilities ready for a slight increase in physical maladies of visitors and perhaps a slightly larger population. The impact of predatory gambling on society, however, goes far beyond in-casino heart attacks, The report ignores socio-economic impacts of pathological and problem gambling such as lowered productivity at work, administration of the justice system, “abused dollars” and social services. Outside those quantifiable costs are other costs too abstract to have a dollar value. Most are related  to problem and pathological gamblers, who yield about half the revenue of the average casino. These costs include family breakup, psychological hurt, and suicide. Casino promoters are not obliged to tell you about what they call “emotional” costs when they talk money but they should tell you that predatory gambling tolls society in estimatable dollars much more than the trifle Hudson Valley Casino concedes.

The application is mute on how many new problem gamblers and addicted gamblers a casino in Newburgh might generate, It gives not even an order of magnitude figure for the annual cost to society associated with each new problem or pathological gambler.  The only costs acknowledged due to gambling are for treatment and prevention. It is assumed that all foreseeable increases in these costs due to the casino would be covered by present Office of Alcohol and Substance Abuse Services programs plus an annual 1.5 million dollars to be collected by the state for treatment and prevention from 3000 gambling positions @$500/yr. The report writer must think this money would go back to Orange County dollar for dollar. Not so; it would be divvied up across the state.

The applicant is wrong to pretend that 1.5 million dollars would begin to cover the socio-economic costs attendant on a new casino in Newburgh.  Here is one estimate of the quantifiable socio-economic costs, neither best-case nor worst-case:

Within a fifty mile radius of the proposed site live at least 2.5 million adults. At least 1.14% (28,500) of them are pathological gamblers now [ Shaffer et al meta-analysis ref 1 ]. If the allure of a Newburgh casino were to notch up the 1.14% by just 15%, that’s 4275 new pathological gamblers. If the quantifiable socioeconomic cost per year of one pathological gambler is 12,790 dollars ( Grinols ref 2 ) the total cost for new pathological gamblers only (not counting problem gamblers) would be $54.7 million/year.

My attack on this proposal does not mean that I think there’s a proposal in Region 1 or anywhere in the state that has such a better analysis of societal health costs and benefits that it merits a license instead of Hudson Valley Casino.   A cost-benefit analysis that gave due regard to societal health would find that none of the sixteen proposals passes. The Upstate Gaming Act authorized up to four casinos in “upstate;” it did not mandate them. No proposed casino deserves a license.  Thank you.

The opinions expressed  are the speaker’s own and do not necessarily reflect those of any or all members of Coalition Against Gambling in New York .  Permission is granted to reproduce text or image in whole or part as long as the permalink above is cited.


Rainbow's end

Rainbow’s end


Most people assume that the New York State Gaming Commission has to award four new casino licenses in 2014 or 2015.  This assumption has made some individuals and groups in “regions eligible for gaming” hesitant to speak against particular proposals. They worry lest opposition in one place push the site selection to another locale no better suited. Think of the “Far Side” cartoon where a bear in the crosshairs points emphatically at another bear by his side.

It’s not true, however, that the Commission must sign off on four licenses. Coalition Against Gambling in New York (CAGNY) calls the attention of press and public to the fact that the Gaming Commission is not required to award even one casino license now or ever.  The passage of “Prop 1” in 2013 and its enabling legislation, the Upstate New York Gaming Economic Development Act of 2013, authorized the Gaming Commission to award up to four licenses “upstate.”   The law did not mandate a single one.

The law states (Title 1 §1300 ¶ 4) that “The state should authorize four destination resort casinos in upstate New York.”    Note the wording: “should” is used, not “shall,” “will” or “must.”

Further, in Title 2 §1311 the law reads : “The Commission is authorized to award up to four gaming facility licenses . . .”   Again, the language is permissive.

CAGNY observes that if the Gaming Commission has a green light from the legislature for up to four licenses, it also has the prerogative to award fewer. When the built-in drawbacks to casinos, like unchecked problem gambling, are compounded by the current fiscal woes of market saturation and leapfrogging interstate competition, not even one casino is called for. Columnist Fred Lebrun wrote thus of our state’s rush to expand casino gambling: “We’re embracing a corpse.”

Persons who speak against a particular proposal at the hearings on  September 22-24 2014  should make that point loud and clear. If someone asks “Supposing the proposal you’re fighting does not get a license, where should that license go?”   the reply is “Nowhere.”



Photo image “It’s just an illusion” from FlickrCC  4490566126_9ce7b24272

Permission to use this post  in whole or part is hereby granted  as long as the  permalink above is cited.  The opinions expressed are those of the writer, Stephen Q. Shafer MD MPH,  and are not necessarily shared by any or all members of Coalition Against Gambling in New York.

Caesars at Woodbury: Problem Gambling ? No Problem







Summary: This is a critique of Attachment IX.A.2.a_A2  in  section  07 – IX.A. Assessment of Local Support and Mitigation Local Impact  of the  application by Caesars Entertainment to the New York State Gaming Facilities Location Board.    Being an epidemiologist and physician familiar with problem gambling as a public health problem,  I found  Attachment IX.A.2.a_A2  extremely biased in downplaying,  to near zero.  the possible health impacts  of a new Woodbury Casino.   The report asserts  as follows:

  • no socio-economic costs of pathological gambling and problem gambling warrant $ consideration, as none can be quantified so that all parties are close to agreement.
  • making casinos more convenient hardly  increases the prevalence of pathological gambling and problem gambling in the surrounding population in the long run.
  • the only population within a 50 mile radius of Woodbury that is  at theoretical  risk of having even a temporary surge in prevalence of pathological gambling and problem gambling  is that of Orange, Dutchess and Putnam Counties.
  • efforts by Caesars elsewhere to address “problem gambling” have been highly successful and will minimize “problem gambling” in southern New York State.

The  report greatly understates the possibility of harm to residents of the region due to a casino in Woodbury to residents of the region.  This essay addresses the first three  points in the above order.  The fourth  I have discussed in an e-mail to the NYS Gaming Commission last April.


In reading the Caesars Entertainment Inc application for a Woodbury casino I focused as a physician versed in public health  on the 40- page report   Study of Addiction and Public Health Implications of a Proposed Casino and Resort in Woodbury New York by Bo J. Bernhard Ph.D., Khalil Philander Ph.D., and Brett Abarbanel Ph.D.

The authors are all experienced consultants for gambling-related  enterprises. Two are senior members of the International Gaming Institute (IGI) at University of Nevada at Las Vegas. This is a highly polished presentation by experts who know the field but hide large tracts of it from view.   It  dismisses or never mentions four crucial facets of the ecology of pathological gambling and problem gambling. The report basically concludes that

  • socio-economic costs of pathological gambling and problem gambling don’t warrant consideration, as none can be quantified so that all parties are close to agreement.
  • making casinos more convenient does not much increase the prevalence of pathological gambling and problem gambling in the surrounding population in the medium  run of 2 to 4 years.
  • the only population within a 50 mile radius of Woodbury that is now under-served by racinos or casinos (and hence at theoretical  risk of having even a temporary surge in prevalence of pathological gambling and problem gambling) is that of Orange, Dutchess and Putnam Counties.
  • efforts by Caesars elsewhere to address “problem gambling” have been highly successful and can be relied on to minimize “problem gambling” in southern NY

The report nowhere mentions a statistic often cited by opponents of predatory gambling but never addressed head-on by casino advocates and never refuted: 40-50% of revenue at the average casino comes from pathological and problem gamblers, who comprise perhaps 12-15% of its customers, maybe 4% of all adults. [ http://cagnyinf.org/wp/april-9-2014-central-stat-of-casino-revenues] For the casino lobby to refute the statistic (if it is refutable) they would have to acknowledge that they can spot pathological and problem gamblers among their “visitors” while those persons are still active customers. This means before the person has loudly threatened suicide within an employee’s hearing or left town suddenly or thrown an ugly scene on the “gaming floor” or been arraigned or jumped.

Casinos will not acknowledge they have any  ability to spot problem or pathological gambling signs and symptoms that are not florid and end-stage. Why not? To move in even gently on such persons would risk offending them so they would go elsewhere or sending them to premature recovery before they have been “played to extinction.” [ https://www.youtube.com/watch?v=9C2BPZYLW_U ] .  To recognize the problem gamblers before they are end-stage yet not do anything for them  would reveal how insincere are the “preventive measures.” .

The casino cartel does not deny that its net revenues follow the Pareto principle: most come from a small proportion of gamblers. What casino promoters won’t say is what proportion on the average of that small proportion are pathological gamblers or problem gamblers. The promoters just do not want to know who among their customers is a problem gambler or pathological gambler until the gambler hits bottom or worse.   Promoters and detractors alike recognize that not everyone who loses a lot of money over time at casinos is a problem gambler. Anti-casino activists hold that most are; the American Gaming Association counters that most are affluent people having fun with their disposable income.

Assuming the central statistic is close to truth, casinos are not motivated to sincerely counter problem gambling and pathological gambling.  A successful effort to do so would lower their revenues by 40-50%.  Nor is government motivated; lower casino gross gaming revenues   would reduce  government’s share  by a like amount.

The report prepared for Caesars (in this no different from all the literature on problem gambling) also does not recognize that “unchanging prevalence” of problem and pathological gambling requires the formation of replacement problem gamblers and pathological gamblers to fill the shoes of those who have recovered, died, moved far away or are no longer free-living. What might appear a steady state is built on creating new problem gamblers. The more effective  the casino is at encouraging current problem gamblers and pathological gamblers into lasting recovery before they have fiscally and emotionally wiped out themselves and and ten people around them, the faster it must generate replacement problem and pathological gamblers to keep up its high profit margins.

I will now cover the first three bullet points above in more detail. The fourth bullet point I wrote about in the above-mentioned letter to the Gaming Commission.

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