Hold ’em Harmless?

high7

The following letter was sent by US mail on 26 October 2015 to the Delhi District office of State Senator John J. Bonacic.  An electronic version  with attachment was transmitted to the  Senator’s  e-mail three days later.

 

 

Dear Senator Bonacic,

At the hearing you held Sept 9 regarding S5302 there was good news: you gave at least a little time to the important question of whether legalizing i-poker would have an impact on problem gambling and gambling addiction. The bad news was that you readily accepted a “negdec”   from Mr Pappas of the Poker Players Alliance. I fear your questioning was to get this assurance of no harm onto the record.

Your questioning of Mr Pappas did not show the trial lawyer skills that Mr Featherstonaugh accorded you later in the hearing. Was this just a lapse in preparation, or was it deliberate? Whichever it was, your “OK” to Mr Pappas’s reply surely gave most listeners the false impression that internet gambling — of all kinds – has been well-studied and found not to be worse in any dimension for individuals or populations than other kinds of gambling. Not so.

I would be glad to meet with you and your staff to go over some basic principles of epidemiology and public health that should be applied to the important work you and your colleagues do. They are explained in the enclosed 12-page critique. Sad to say, the approach in the September hearing to this basic science  is no more valid than evaluating a corporation by whether it declared a profit or loss in the most recent annual report.

Sincerely,

Stephen Q. Shafer MD MPH

Chairperson,  Coalition Against Gambling in New York  917 453 7371

Below is the critique that was enclosed with the cover letter

Considerations of Internet Problem Gambling in the New York State Senate i-Poker Hearings of September 9 2015: an Epidemiologist’s Critique

Stephen Q. Shafer MD MA MPH                                              27 October 2015

 

The author is a retired Clinical Professor of Neurology, Columbia University and Chairperson of Coalition Against Gambling in New York, a non-profit all-volunteer organization registered in Buffalo.

 

During the Sept 9 2015 hearing on legalizing i-poker held by Senator Bonacic there was scant mention of the potential for i-poker or other forms of i-gambling to cause addiction or problem gambling or to sustain these conditions when they had developed in another setting such as a b and m [bricks and mortar] casino. Below is the nearest approach.

At about 15:50 Mr Bonacic, chairing, asked Mr Pappas, CEO of the Poker Players Alliance and the first person to testify, “Is there a ratio for the amount of people that play on line poker, gaming, as opposed to those that get addicted? Is it one in three hundred, one in five hundred?   Is it ascertainable?”

Senator Bonacic seems here to be groping for the prevalence of gambling addiction among persons who do i-poker or i-“gaming.” I expect he meant to make the ratio as he set it up  500 to one, not one in 500. He is certainly leading the witness towards a very low proportion of addicted gamblers among all on-line gamblers.  Note also that the question does not separate poker from other types of i-gambling. This is likely intentional, to blur distinctions in readiness for the transition I think he and associates plan, from two particular forms of i-poker to all forms of casino-type “gaming” on the internet and ultimately to i-betting on sports.

 Mr Pappas responded that he didn’t have notes in hand but that his written testimony gave backup. He summarized,    “There is not a discernible increase, not any increase.” Mr. Bonacic replied “OK. ”

Note well: Mr Pappas did not answer the question Senator Bonacic asked, which was about a “ratio,” not an increase. His response belonged to a question not put. Perhaps he had been expecting something like one of the following:

Continue reading

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

        and
–   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.

The Curse

Pachinko

Pachinko

 

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.

Continue reading

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.

Nowhere

Rainbow's end

Rainbow’s end

Nowhere

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.

Cornfields and Dreamfields

The New Bridge

The New Bridge

 

States of the States in Casinoland: Cornfields  and  Dreamfields

Summary:  An overview of casino spread in the United States                                             (1) Looks at locations and fiscal markers of “cornfield casinos” in Iowa, a thinly-populated state that  has  eighteen commercial casinos and two Indian ones.                                       (2) Discusses likely rationales for two sites proposed for new casinos in Iowa.                (3) A table using  figures from  the American Gaming Association web site  compares  year-2012 fiscal data for commercial casinos or racetrack electronic gaming devices  among all  twenty-three states that have either or both.  States can be ranked on  characteristics such as “win per capita” or taxes paid to government.  

Talking with someone from a very small city in NY (pop 900)   proposed as casino site,  I  remarked  naively that it must be unique in the country in being a truly rural community into which a commercial casino might come. I had thought all commercial casinos are in suburbs,  exurbs or fair-sized towns when  not in big cities.  Iowa then came to mind as predominantly rural but with commercial casinos.

A look at that state surprised me.  Iowa has fifteen commercial casinos classed  as “riverboats,”  three tracks with electronic gambling devices (EGDs)  and two Indian casinos.   It is hard to understand how the state could support so many; yet it is  considering two more.    This count led me  to compare Iowa to other states as to number, size and locations of casinos.  Two questions arose:  (1) were  impacts on small rural communities  assessed  in any way by  independent studies?  (2) how  did landlocked rural casinos fare financially compared to ones at riverside  or more urban settings?

Question 1 is a rapid dead end. No.  Question 2 opened a window on the United States as casinoland that this essay props wide.

To imagine from  the Iowa experience what a very small rural community in upstate NY might expect from a casino’s arrival,   I picked  four  similar locales in Iowa that now have casinos and one (Jefferson, in Green County) for which a casino is proposed.  Click here for a map.    Four locales were chosen by developers.  One, in Tama (Tama County),  is Indian-operated and was thus not free to roam.  Because it is a small “city” like the other four  and evidently  a test case for new competition while Iowa plans  more  casinos,  I included Tama.

Emmetsburg, pop 3900,  is home since 2006 to the Wild Rose Casino (550 slots,  17 table games, or TGs).   The casino is right in town on (literally)  Main Street,  US Rte 18,  which crosses the state.  Emmetsburg is the County Seat of Palo Alto County,  with a population  density of 16.5/sq mile it ranks 84th out of 99 in the state (Iowa pop. density is about 54/sq mi).  The town’s web site shows merited civic pride in history.    A report by a consulting group  in 2009 commented that there are no communities of much size nearby,  though Highway 18 eases travel.  The report stated that win/admission ratio (“win” means “gaming revenue”  of course)  and gaming revenue in first two full years were below most other markets in Iowa.  This is still true through FY 2013.

Northwood, pop 1989,  hosts  the Diamond Jo Worth casino  with 1000 slots and 32 TGs.  The casino is right off  I-35,  ( 9 mi west of the center of town)  about 25 mi south of  I-90 as it traverses southern Minnesota.   Click here for  Christmas Greetings from the casino in  2009.   Worth County ,  with population  density of 18.9 / sq mi,  ranks 76th in the state.   The  report by a consulting group in 2009 remarked that  the casino’s nearness to I-35 brought Mason City  into its reach at the time.  In its first two years the casino had an   “win”/admission ratio  and adjusted gross gambling revenues that outdid the state average.

Larchwood (pop.  866) is the city in Iowa most remote from  the capital, Des Moines.  Lyon County ranks 75th in state in pop density,  at 19.7.  In the northwest corner of Iowa,  Larchwood  saw in 2011 the rapid   opening of the Grand Falls casino,  which cost $120 million and offers   900 slots.  Tables games are now up to thirty-seven. This casino was obviously sited to capture Sioux Falls, South Dakota,  the largest city in that state.  A website blurb says it’s just eight minutes from Sioux Falls.  Actually eight miles from the extreme eastern side,  it is  more like 15 mi and 25 minutes from the center of the city.  The manager of the Grand Falls casino   told a reporter that she expected  an annual revenue of $70 million,  with 80%  to come from out-of-staters.

South Dakota  on the AGA listing ( see table below ) has thirty-five (35) “casinos”  but total “gaming” revenue is only $107M with revenue to state only $ 16.6M.  [Note well: these data may be wrong, but are copied correctly from the web site.]  I did not research the  state  in detail but would guess that many  of the “casinos” are like Borrowed Buck’s Roadhouse, the only “casino” in Sioux Falls that shows on a commercial website map  It has ten (10)  VLTs, pool tables and foosball.  South Dakota had decided,  upon legalizing casinos,  to put all its  real commercial casinos in one town,  Deadwood, almost 400 miles from Sioux Falls.   Since 1989 S. D. has had video lottery.  In FY 2013 an average of 9133 machines operated in the state in an average of 1426 establishments.  The nearest real casino to S.F. is an Indian one at Flandreau, 44 miles away.   A casino in nearer-by Larchwood was supposed to appeal to people in Sioux Falls who want live table games and lots of slots.

In Larchwood  gaming revenue has not reached the anticipated 70 M .   At 59 M for 2012 it was in the red $ 4.8 million.  Adjusted gross revenue in 2013 was $58 million, and the “win”/capita $46 in FY 2013, below the state average.  It may be that Sioux Falls gamblers find the convenient VLTs in town surpass the call of the casino.

These three active commercial casinos can be compared in the table to the fifteen “riverboat” casinos in Iowa, which includes them.  Data are for FY 2013   Some figures are rounded-off.

Continue reading

The Crying of Prop. 1, 2013

The Crying of Prop. 1

Stephen Q. Shafer, M.D., M.A. , M.P.H.

Chairperson, Coalition Against Gambling in New York

 

8561188366_eda5d758cf_mbuckets

 

 

 

 

 

Summary Social costs due to  increased  problem gambling after  “up to seven” new casinos open in New York State will almost certainly exceed revenues from the State’s taxing new casinos.  These costs are real but externalized,  thus easily hidden or denied.  Just a 10% increase in the statewide prevalence of problem gambling would almost wipe out the gains in revenue to the State treasury and create thousands more gambling addicts than “permanent good jobs.”   A  25%  increase would nearly negate the entire sum ($1.2 billion)  targeted for recovery via in-state casinos.  In their quest for revenue without increases in conventional taxes,  state officials implied by silence  that  the number of  new problem gamblers anticipated either cannot be estimated or need not be. It is a nullity, off  the board.

No public policy can be evaluated properly without considering costs. Yet that’s what happened in the legislature and on the campaign trail.  This paper gives a public health physician’s   viewpoint of  the dishonesty in marketing “Proposal 1” right into the polling booth.

Introduction  The victorious campaign to legalize casinos in New York State  played up  hoped-for benefits and  played down  likely costs.  While conceding when pressed that problem gambling is a problem, promoters never  acknowledged  the flip side to making casinos more convenient to New Yorkers.  This step, to become law on January 1,  will (not might, will) create new addicted gamblers and new problem gamblers as well as service current ones.  Costs quite possibly in the hundreds of millions of dollars per year  will extend  to society from this sector.

Neither government nor business interests have made public any consideration whatsoever of   these costs.  The deliberate silence moved me, as a physician trained in public health, to compare these costs to the much-publicized  benefits.  I focused on a narrow question:  will the inflow of casino money to the State Treasury equal or outweigh the costs of the new casinos, externalized to New York’s people?  This is only one type of benefit, only one category of costs.

Analysis   What inflow is expected?    Proposal 1 promoters  have repeatedly said that gamblers from  NY  “spend”  $ 1.2 billion / yr  at  casinos in adjoining states and Canada.  [1]   The basis for this figure is not known to me.  In 2012 patrons from NY left behind at the two Indian casinos in Connecticut $259 million. [2]   Presumably the other billion was left behind in Pennsylvania, New Jersey, and Canada.  If this amount were lost in NYS  instead of elsewhere,  taxing it at the rates in Table 1  would yield to the State treasury the following amounts:.

 

                                                       Abbreviations used in the textNYS     New York StateQSEC   Quantifiable Socio-Economic Costs

 

Table 1.  Division of  $1.2 billion  “spent”  in out-of –NYS  casinos between State Treasury and  casino  ownership if all  $1.2 billion were kept in NYS.

Tax rate     State Treasury                Owners

$ millions               $ millions

20%                   240                            960

25%                   300                            900

30%                   360                            840

35%                   420                            780

40%                   480                            720

45%                   540                            660

At  30%  (reasonable guesstimate for NYS non-tribal casinos with 70% slots 30% other), the State Treasury would gain $360 million.  This is not the only possible benefit to the state, but is the most easily measured and the most talked-about, as in  “educating our children,” “property tax relief.”

Now to costs:   the principal (but far from the only) cost of “up to seven” casinos is the creation of new addicted and problem gamblers through a “distance  effect. ”     For a brief review of the literature, see pages 2-4 of a Dec 2012 paper which looked at the hypothetical scenario of five new casinos in New York City   [3]

The entry of  new gamblers during a specified time (incidence) into a category like “addicted”  is not well  measured by the prevalence (proportion active at a given time) [4].  This is because individuals leave the active prevalence pool over time through recovery, death, imprisonment, totally disabling illness or out-migration.  As hard as it is to measure the  prevalence of problem gambling,  it is far harder to measure incidence. Thus prevalence, fraught with methodological problems,  is the usual benchmark.

To assess costs of new addicted gamblers and problem gamblers we need  head counts and  per-head figures for cost.  The cost figures cited most often are from Earl L. Grinols, Distinguished Professor of Economics at Baylor. His book shows clearly how he came to them. [5]   I call these Quantifiable Socioeconomic Costs  (abbrev. QSEC), though Grinols does not use that term.  In  2012 dollars  QSEC  are $13787 / yr  per pathological (addicted ) gambler; those per problem Gambler are $3600 /yr .  Note well:  QSEC do not include suicide, divorce,  mental anguish, family disruption.  The costs of   these calamities are un-quantifiable; no monetary values can be assigned.  Thus they are even easier to disregard than QSEC.

Regarding the head count: the number of active addicted gamblers in NYS can be estimated by applying to a rounded-off figure of 15 million adults statistics for prevalence among adults of addicted (1.14%) and of problem gamblers (2.8%).  These are not recent but are well-established from a meta-analysis. [6]   In a national sample reported in 2004 [7] the prevalence of pathological and problem gamblers combined was 3.5% .

If at baseline there are 171,000 active addicted gamblers (15 million * 1.14%) and prevalence goes  up  by 5%, NYS  has  at least 9,000 new addicts.  Table 2 shows the number of new cases for a given increment in prevalence,  and the QSEC attached.  Table 3 works the same way for problem gamblers.  Table 4 combines the QSEC  for both types, arrayed by % increase.

Table 2.  Number of  new addicted  gamblers in NYS and Quantifiable Socioeconomic Costs of new addicted gamblers, by increase in prevalence  over baseline.  e.g. 9,000 * $13,787 /yr = $ 124 million/yr

Increase                       New addicted  gamblers   QSEC of increase in $ millions/yr

5%                                             9,000                         124

10%                                         17,000                         234

15%                                         26,000                         358

20%                                         34,000                         469

25%                                         43,000                         593

30%                                         51,000                         703

Table 3.  Number of new problem gamblers in NYS and Quantifiable Socioeconomic Costs of new problem gamblers, by increase in prevalence  over baseline. e.g. 21,000 * $3,600 /yr = $ 76 million/yr

Increase                       New  problem  gamblers   QSEC of increase in $ millions/yr

5%                                           21,000                         76

10%                                         42,000                         151

15%                                         63,000                         227

20%                                         84,000                         302

25%                                       105,000                         378

30%                                       126,000                         454

Table 4.  Quantifiable Socioeconomic Costs of new addicted  gamblers + new problem gamblers by increase in prevalence  over baseline.  e.g. for 5% increase in both,  total is $124 + $76 = $200 million/year.

Increase                       QSEC of increase, in $ millions/yr

5%                                           200

10%                                         385

15%                                         585

20%                                         771

25%                                         971

30%                                       1157

From Table 4 we see that if prevalence of addictive gambling and of problem gambling both  rise by only 10%, the QSEC attached to that rise are more than the $360 million the State would recover by taxing 1.2 billion at 30%.

We must consider, though, that persons who became gamblers because of the convenient casinos (some addicted,  some  problem gamblers, most in neither type) will also lose money there  that can be taxed.  How much might that add to State treasury  revenue?  Would that be enough to “cover” the QSEC springing from new casinos?  To answer that we need an estimate for  losses by type of gambler.

Grinols and Omorov in a 1996 paper [7]  estimated annual losses to casinos by persons living within 35 miles of  Las Vegas or Atlantic City  at $14,200/year (1992 dollars)  per one hundred  persons.    This includes people who do not go to a casino from one year to the next.  Converting to 2012 dollars gives   $ 23, 400 per 100 persons.  This figure was used in my Dec 2012 paper to reckon that losses to casinos by the 8 million residents of Greater New York came to $1.87 billion/year. I assumed that all losses were to casinos outside the reach of NYS taxation.   If  $23, 400 were applied to the entire NYS population it would mean that losses to casinos come to  $3.5 billion /year,  three times higher that of the commonly-cited  estimate of 1.2 billion /year.  Assuming that  $ 1.2 billion for the whole state is correct, a likely explanation is that since no resident of Greater NY  lives within 35 miles of a full-service casino,   the $23,400/100 persons/yr  figure was high; the longer distance lowers willingness to travel then spend.

$1.2 billion lost at out of state casinos by residents of NYS means that the average loss per year is $1.2 billion/15 million, or $8000/100 persons/year.  I took liberties with the famous table in Grinols and Omorow [8] , keeping the ratios of annual loss per gambler between types very much like those in the original but lowering the values so that the annual loss / 100 persons comes out to $8000, not $23,400.  The results in dollars of 1992 are in Table 5.

Table 5.  Hypothetical structure of casino revenues in 1992 dollars, by type of gambler   This table is formatted like the one in Grinols and Omorov [ref 8]  but the input values  in columns 1 and 3 have been altered, producing figures in column 4 very  different from those in the original.  Percentages in column 5 are similar to those in the original.

Prevalence in population

Type of gambler

Annual loss per gambler

Annual loss per 100 adults

Cumulative % of casino gross

1.14%

Addicted

1480

1687

35

2.8%

Problem

250

700

49

6.06%

Heavy bettor

118

715

64

50%

Light bettor

35

1750

100

40%

Non-bettor

0

0

100

100%

All types

 

4852

 

 

Converting  $4852 dollars of 1992 to $8006 dollars of 2012 gives the amount lost last year out of state /100 persons in population. For a population of 15 million the annual out of state loss is reckoned at $1.2 billion.  If new casinos caused no rise in prevalence of problem gambling AND stopped 100% of leakage,  this table could also represent the gamblers’ losses ( ~ = “gaming revenue”)  at casinos in New York after new casinos are at full steam.  Of this $1.2 billion the State Treasury gets  $360 million at 30% tax rate.

Leaving the baseline of  Table 5, consider the changes in  losses at casinos by gamblers after new casinos open in state,  assuming a 10% rise in prevalences of gambling addiction and problem gambling.  In Table 6,  note  new figures in column 1, same figures in column 3.  The annual loss to casinos rises, as does the revenue to the state treasury.

Table 6.  Hypothetical structure of casino revenues in 1992 dollars, by type of gambler, reflecting changes in relative frequencies of type in population due to new casinos    Assumption: compared to baseline there is a 10 % increase in prevalence of all types of gambler and a decrease in proportion of non-bettors from 40% at baseline to 34%.

Prevalence in population

Type of gambler

Annual loss per gambler

Annual loss per 100 adults

Cumulative % of casino gross

1.25%

Addicted

1480

1850

35

3.08%

Problem

250

770

49

6.7%

Heavy bettor

118

791

64

55%

Light bettor

35

1925

100

34%

Non-bettor

0

0

100

100%

All types

 

5336

 

 

 

Converting $5336 to dollars of 2012 gives $8804 / 100 adults/yr .  This, multiplied by 15 million adults,    yields $1.32 billion as the amount that would be lost by gamblers from New York at casinos in  New York after new casinos are built.  In this scenario the non-tribal New York casinos realize from the losses of  new gamblers an extra $120 million  ( = $1.32B – $1.2B) of which the State gets by taxation 30 % , or $ 36 million.

If  the prevalences of addicted gambling and problem gambling rise by 25% with new casinos, not just by 10%, the annual loss to casinos rises in proportion.  See Table 7.

Table 7.  Hypothetical structure of casino revenues in 1992 dollars, by type of gambler, reflecting changes in relative frequencies of type in population due to new casinos   Assumption: compared to baseline there is a 25% increase in prevalence of  all types of gambler  and a decrease in proportion of non-bettors from 40% at baseline to 29%.

Prevalence in population

Type of gambler

Annual loss per gambler

Annual loss per 100 adults

Cumulative % of casino gross

1.43%

Addicted

1480

2116

36

3.5%

Problem

250

875

51

7.8%

Heavy bettor

118

920

64

62.5%

Light bettor

35

2188

100

25%

Non-bettor

0

0

100

100%

All types

 

6099

 

Converting $6099 to dollars of 2012 gives $10063 / 100 adults/yr. This figure, multiplied by  15 million adults,  yields $1.51 billion as the amount that would be lost at New York casinos by New Yorkers.  Casinos take  in $310 million above baseline (=$1.51B – $1.2B) from the new gamblers, of  which  the State Treasury collects 30%  or $93 million above the baseline intake of $360 million.

Discussion The QSEC to New York society associated with generating 17,000 new addicted gamblers and 42,000 new problem gamblers (10% increase in prevalence of both) are  $385 million, very nearly as much as the revenue to the state ($396 M) from taxing the losses by established and new gamblers at its new casinos.    If the State attended to costs, not just to revenues,  it would see this barely breaks even. The QSEC to New York society associated with generating 43,000 new addicted gamblers and 105,000 new problem gamblers (25% increase in prevalence of both)  are  $971 million, more than twice as much  as much as the revenue to the state ($450 million) from taxing the losses by established and new gamblers at its new casinos. If the State paid attention to costs,  it would see a fiasco.  This $971 million quantifiable cost almost equals the total of  $1.2 billion supposedly at stake.

The advertisements run by NY JOBS NOW implied that every dollar of the 1.2 billion that is lost to a casino in New York rather than across a border will benefit New York.    One ostensible benefit,  outweighed by QSEC,  is tax revenue to be disbursed  back to the populace as “aid to education” or  “property tax relief.”  Another,  not touted so loudly,  might be  to keep the rest of the money within the state where  it will go to overhead and profits of businesses with structures in NYS..  Much of that overhead will, we presume, pass to persons now living in the state as wages and as property tax paid to municipalities (if no abatements).  This would be a benefit to the state.  In fairness and transparency, however,  it  must still be weighed against QSEC, which in the 25% increase scenario may equal or exceed it.   That leaves profit.  Is this a benefit to NYS?    The casino buildings  will be in our state.  Where will the profit-takers be?

It  is too early to know if any of the owners will be NY companies.  Front-running candidates as of  Nov 18  include  Foxwoods, a Connecticut company;  Claremont Partners, “ a partnership of  mostly offshore investors based in the  Isle of Man;”  EPR Properties, based in Kansas City;  Empire Resorts, based in Kuala Lumpur; Concord Associates, New York; Muss Development, New York City; and Jeff  Gural, who lives in New York City.  RH Land Development has its New York State location in Rochester.  Traditions at the Glen Resort has one location, in Johnson City.    Vista Hospitality has its American offices in Binghamton. Caesar’s Entertainment, Las Vegas, is reported to be interested after having been dismissed in Massachusetts.  Rumor says the Stockbridge-Munsee Tribe of Wisconsin is interested. A list like this will change week-to-week.

Conclusion It is sad indeed that voters were sold the amendment by being shown none of the debits, only the income.  In place of a cost-benefit analysis,  the electorate got the travesty of a benefit-only analysis.  New York State’s leaders and legislative followers sought  revenue at any cost, as long as the latter was out of sight.

Most of the debit side of the ledger springs from the formation of new gambling addicts and problem gamblers, creating a public health problem never recognized as such.  In a progressive state such as New York has been and should be, this would have been addressed by Health in All Policy.  HiAP is a fairly new concept, not the law of the land but gaining ground in North America (e.g. California and Ontario).  It came out of a 1998 resolution by the World Health Organization .  Basically, it requires that large – scale governmental policy have a health impact assessment before adoption.  New York State deliberately bypassed the responsibility to offer voters a traditional cost-benefit analysis of policy.  Just as deliberately the state passed up the challenge of  applying innovative HiAP.

It is impossible to predict exactly how many new problem gamblers will develop in the “up to seven casinos” future.  It is also impossible  that there will not be more of  them as our state gets more convenient casinos. Legislators hinted at the threat by putting some funding for treatment and prevention into the Upstate Gaming and Economic Development Act passed last June.  Then they withdrew attention.  No one in Albany made any estimate of the scope of the problem, thus zeroing it away.  If it has no size, it’s nothing.

200px-A-dressing_the_White_Queen

“Alice laughed: “There’s no use trying,” she said; “one can’t believe impossible things.”
“I daresay you haven’t had much practice,” said the Queen. “When I was younger, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”     Lewis Carroll,   Through the Looking Glass

 

 

Afterword on prevalence Even if the prevalences of  addiction  and  problem gambling could be shown by a crystal ball to be absolutely stable over (say) four years following the introduction  of casinos, that first phase has created  new disordered gamblers.   Every year, some gambling addicts and problem gamblers leave the “active prevalence” pool  through  recovery, death,  imprisonment, disabling illness or out-migration. Suppose this rate is truly 10% a year;  after  four years,  prevalence of active addiction  that began at (say)  1.14% should be down to 0.75%.  If  it is not, “replacement addicts” have entered the pool,   Some are in-migrants, some relapses, many newly-minted.

 

Studies that purport to find no statistically significant increase in the prevalence of (say) problem gambling over time after exposure rises may also be underpowered.  A study to detect with reasonable statistical power a near-doubling of  prevalence from 1.14% to a prevalence of 2.17% would require 2000 interviews at each point.  This is impossibly expensive for a public agency to do.  A study to detect a 25% increase from 0.0114 to 0.0142 would require 20,000 interviews at each point.  The increase seems less than minuscule, yet in a population of 15 million it represents 43,000 new addicts.  No wonder the gambling promoters have no fear of someone’s proving an increase in the prevalence of addiction and thus no fear of being held responsible for any ominous trends.

References

  1. From the Home Page of  NY Jobs Now http://www.nyjobsnow.com/index.php#benefits

NEW JOBS. MONEY FOR SCHOOLS. LOWER PROPERTY TAXES.

New Yorkers currently spend more than $1.2 billion a year at destination casinos in neighboring states. Allowing casinos in New York will keep a lot of that money right here in New York where it belongs — helping to generate economic activity, fund our schools, and provide tax relief.

On the ballot this November, Proposal 1 will ask voters to approve the casino plan passed by Governor Andrew Cuomo and the State Legislature this spring.

2. Center for  Policy Analysis, University of Massachusetts at Dartmouth: New England Casino    Gaming Update 2013.  Economic Development series no. 74

3. Shafer, Stephen Q. New Commercial Casinos Will Mean Thousands of New Gambling Addicts  Dec. 2012  http://cagnyinf.org/wp/new-casinos-equal-1000s-of-gambling-addicts/

4. Shafer, Stephen Q.  Measure Something: Prevalence of Pathological and of Problem Gamblers. http://cagnyinf.org/wp/9_nov_2013_measure_prevalence/

5. Earl L. Grinols. Gambling in America Cambridge University Press 2004 pp. 171-174.

6. Shaffer HJ, Hall MN, Vander Bilt J. Estimated Disordered Gambling Behavior in the United States and Canada Report to National Gambling Impact Study Final Report 1999  https://divisiononaddictions.org/html/publications/meta.pdf

7.  Welte JW et al. The Relationship of Ecological and Geographic Factors to Gambling Behavior.  J. Gambling Studies ( 2004) 20: 405-442

8. Grinols EL and  Omorov  JD.  Development or Dreamfield Delusions? Assessing Casino Gambling’s Costs and Benefits.  J. Law and Commerce 1996-97, vol 16 p 59

The drawing is captured from Wikipedia.  Original by John Tenniel for  Through the Looking Glass and What Alice Found There, by Lewis Carroll

photograph of buckets is by Kevin Krebs from clickr.com photos 8561188366_eda5d758cf_

The author retired in 2010 as Clinical Professor of Neurology at Harlem Hospital Center, Columbia University. He has an M.P.H. in Epidemiology and an M.A. in Political Science gained while (1976-78) a Robert Wood Johnson Clinical Scholar in the Department of Medicine,  Columbia College of Physicians and Surgeons.  He is Chairperson of Coalition Against Gambling in New York,  a non-profit  registered in Buffalo.

Permission is hereby given to reproduce this post in whole or part as long as the permalink above is cited.

Disposition of Revenues from Casino Taxes: a Projection

 

Goya:  El Sueno de Razon

Goya: El Sueno de la Razon Produce Monstruos

 

 

 

Disposition of Revenues to New York State Residents from Casino Taxes per Upstate New York Gaming Economic Development Act of 2013: a Projection

 

 

 

On Monday, Sept 23 2013 at 12:01 AM EDT,  Coalition Against Gambling in New York released a report of high interest to all New York State voters and taxpayers.  Governor Cuomo has touted the proposed constitutional amendment that would legalize casinos as a benefit to all New Yorkers.  Now dubbed “Proposal One,”  it will be presented with heavy bias on the ballot for  a “yes” vote. Click on the link right below to read opinion of the NY Daily News about the ballot langauge.  http://www.nydailynews.com/opinion/house-wins-article-1.1454344

The framers of “Proposal One”  must hope voters won’t have thought about pros and cons until they enter the booth.  To counter this deliberate neglect by the casino promoters, we made conservative assumptions to project the impact of the amendment’s  passage on property tax bills around  the state. 

In our projections, if the amendment passes, the  benefits (as property tax relief or aid to education) to individuals from taxes on casinos’ gaming revenue would vary enormously (by more than twenty-fold) from place to place.   The size of these disparities is not rationalized in the legislation that prescribes them.   These tax relief measures if enacted  would hardly change the personal property tax situation for a majority of the state’s population.   We project, for example,  that if 80% of  the taxes paid to the state by four  exceptionally busy new casinos  were disbursed uniformly to the  whole state entirely as property tax relief, residents of “downstate” (NYC, L.I., Westchester, Rockland and Putnam) would have just $20  of relief per adult per year.    The “relief” to more than 99% of taxpayers if the amendment passes would  be less than the conservatively-projected  increase in hidden quantifiable social costs of legalized gambling to be expected from adding “up to seven”  new casinos.  In short, for almost all New Yorkers in relation to taxes cons >> pros.

Readers can develop their own scenarios and projections using our straightforward methods.  

Click on the link to see a pdf of the 22-page report, divided into Summary, Introduction, Methods, Results, Discussion, Conclusions and Appendix.     UNYGEDASept22_Final

This version varies slightly from that sent to members of the press and other media on Sept 18 in advance of release to the public in early morning of Monday Sept 23.  Changes are shown at the end.  

Opinions in this piece are those of the authors and do not necessarily reflect those of any or all other members of Coalition Against Gambling in New York. Permission is hereby granted to reproduce this post  in whole or part as long as there is a citation to the permalink above. Corresponding author is Dave Colavito ddcolavito@gmail.com .  You may request a pdf version of the report by e-mail.

 

 

 

New York State is Addicted

Despair

New York State is addicted to revenues from gambling.  This is not just a figure of speech. Below are hallmarks obvious in the state’s behavior over the 47 years since its Constitution was amended to allow a lottery with periodic drawings and paper tickets.  In November another amendment, to permit “up to seven” casinos, will be on the ballot statewide. Intervention is needed.

  • craving
  • upping the dose
  • seeking short-term rewards e.g. “aid to education” without an uptick in personal or business tax rates.
  • discounting adverse effects  Problem gambling in New York drains from society  more than 3.5 billion dollars a year in quantifiable socio-economic costs like judicial administration, lowered productivity, and abused dollars.  This amount excludes suicide, proceeds of crime and psychosocial harm to the dozen or so individuals who are betrayed by every problem gambler in “the chase.”  No state official ever acknowledges the size of this problem.  The econometrics are in Gambling in America (Cambridge University Press, 2004) by Earl L. Grinols, Distinguished Professor of Economics at Baylor.
  • denying long term liabilities (e.g. spectre of fiscal flop with saturation, need for bailout à la NJ or DE, future inroads by internet gambling)
  • scoffing at the diagnosis “There’s nothing wrong with me!”
  • dismissing prospects of recovery  
  • cheating (e.g. allowing as if they are video lottery terminals (VLTs) hybrid electronic table games with outcomes not under the control of Lottery’s central processing unit.  See New York Daily News May 5 and 12, 2013. Another more recent example: rewriting the text of the amendment   to be on November ballot to make it an advertisement for a yes vote and boosting the proposal from the sixth slot where it belongs by date of passage into the “number one” slot.
  • deceiving e.g. pretending  increased regional cash throughput is “economic development”  Another example: saying that government regulation of commercial casinos will prevent the creation and exploitation of problem gamblers. In fact, government wants tough regulation to protect itself from being cheated, not to end problem gambling.   Half of casino revenues flow from the 4% of adults who are problem gamblers.  The casino owners don’t want to stop mining this mother lode, nor would tax-collectors like a 50% drop in revenues to the state. Even the most credulous person will realize that “regulation” in this situation is  programmed to fall far short of stated intentions.
  • scheming and manipulating  item, conceding money due to the state, localities and private citizens to deflect Indian opposition to potential competitors; item, promising a piece of commercial casino revenues not to “education” nor to “local property tax relief” but to horse-breeding and tracks if legalized casinos “cannibalize” racino gambling
  • conniving “If a law is in your way, get rid of it.”
  • dealing in a desperate and dishonorable way to keep “the connection.”  The Upstate NY Gaming Economic Development Act of 2013 authorized additional video gaming establishments under Lottery if the casino amendment does not pass.  A spokesperson for the Governor (see Wall Street Journal June 15) offered ball-park figures: three to four “upstate” facilities with up to 5000 machines each.  This would more than double the state’s current battery.  The same bill enacted, regardless of the amendment’s outcome, additional VLT facilities “downstate.” Curious, for a bill denoted “Upstate.”

New York State is not addicted in the sense that its whole government is preoccupied each day with raising revenue from gambling. Nor is a large proportion of total revenue to the state from that source.  It’s less than 3%. That the state is a high-functioning addict still able to multi-task does not excuse its being addicted nor give assurance that its dependence will not get worse.

New York is not alone.  Many states and Canadian provinces are addicted too.  All show typical denial. Nowhere but in NY, however, do voters statewide have the chance in 2013 to call the addiction just that and say “Let’s start to ‘Recover New York.’”

Most people, even if they have never been in one, know what an intervention is, how it can launch recovery before catastrophe has struck.   New York needs an intervention now. Rejecting the proposed amendment at the General Election is a good start. Sad to say that’s all it can be.  The intervenors have no leverage here. The addict has a big stash locked in the garage and no intention of handing it over or entering treatment.

I personally regret NYS has the “casino referendum” because opponents may be outspent >1000 to 1 as is happening in Massachusetts and the public bamboozled.  Now that the Governor and his legislature have brought us the referendum, though, we can and must use it to confront our government, challenge it to lead recovery from gambling addiction the way it leads on recovery from natural disaster,

Photo image “Despair” from flickr creative commons 3503412461_815c19b748

Opinions in this piece are those of the writer, Stephen Shafer,  and do not necessarily reflect the views of any or all other members of CAGNY.  Permission to reproduce in whole or part is hereby granted as long as the permalink above is cited.

Problem Gambling Misery Summated

 

Graphic by Dave Colavito

Graphic by Dave Colavito

      The central statistic of casino finances is that 50% of taxable revenue comes from pathological and problem gamblers, about 4% of adults.  One evil of casino gambling is that almost none of the money that these unfortunate persons leave at casinos belongs clearly to them alone unless they have recently, and legally,  become very rich, without dependents.  Thus 50% of pre-tax revenue, more than 50% of profit, has been diverted from persons who may never have gambled, innocent bystanders or co-dependents.  Spouses, children, siblings, parents, employers, employees, clients – these are just a few examples.  The typical gambling addict is into eight, twelve, fifteen other people whom he or she will serially sacrifice to “the chase,” usually until it has consumed the gambler and destroyed all good social and emotional relationships.

     Most residents of the U.S. can recite that gambling addiction is a true addiction. Secretly, however, many believe it is a moral failing or a defect in reasoning that deserves catastrophe.  They rationalize that, if everyone can avoid a small increase in  personal tax outlays by the exenterating exploitation of the 4% who are problem gamblers,  that’s a win for the other 96%.   This “devil take the hindmost” approach may look utilitarian.  It does not take account of the dozen or more people around each problem gambler who are wrung out fiscally and emotionally in the quest for “more revenue to education.”  See the April 15 post “Robbing Peter” on this web site. 

      To comprehend the total misery dealt out by predatory gambling to a specified group of individuals would need much study. Consensus would be unlikely.  Economists like Earl Grinols have painstakingly  presented harm in terms of dollars.  While we respect this completely for cost-benefit analysis, we have always noted that  it understates the total impact, which is a stew of fiscal loss and emotional hurt.  Quantifying in an entire population the cumulative lifetime misery associated with problem gambling so as to reach consensus is impossible.  There are two aspects, however,  that everyone can agree on qualitatively.  First, the problem gambler alone does not sustain or mete out all the damage; second, not all the damage can be measured  econometrically.

          The graphic above, realized by Dave Colavito,  is an abstraction, not data-based.  It shows that the high casino profits due to problem gamblers,  which are taxed into “revenues to education” via gambling “regulated” or operated by state government come at the expense  — literal and figurative — of many more parties than those individual gamblers.  The “iceberg”  (actually it looks  more like a volcano rising above the waves from the ocean floor ) schematizes lifetime gambling-related cumulative misery as a function of psychosocial closeness to a problem gambler.  The problem gambler is the red apex.  The strata of adjoining locations represent lifetime cumulative misery of other parties at varying psychosocial distances from the problem gambler.  The anguish of a wife who has seen the furniture sold, the children made homeless and the husband she still tries to love gone  or jailed will be more than that of a client cheated or a friend whose loan to “help pay my kid’s doctor bill” is never repaid.  There are, however,  more clients and friends around a problem gambler than spouses.  Integrated  over all these more distant persons, the totality of hurt and loss is likely to exceed that of the very nearest and dearest. 

          However we define misery –as pure fiscal deprivation or that plus emotional damage  — it is not “just” the problem gambler who loses something lifelong  in the havoc of out-of-control gambling.  It is a dozen or more other people, whether innocent,  trusting, co-dependent or any combination. To the  casinos that prey on problem gamblers and governments that get income therefrom, these people are chopped liver.

Three references about impact on families http://s3.amazonaws.com/publicationslist.org/data/philip.darbyshire/ref-36/JGS%20gambling%20paper.pdf 

http://www.problemgambling.ca/gambling-help/support-for-families/effects-on-families.aspx

http://www.ncbi.nlm.nih.gov/pubmed/17667890 

Permission is given by Cagnyeditor to reproduce this in full or part as long as the permalink above is cited and the graphic is attributed to Dave Colavito.