Caesars at Woodbury: Problem Gambling ? No Problem

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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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Q and A on Predatory Gambling in New York

Kollwitz  Woman with Dead Child

Kollwitz Woman with Dead Child

A Dialogue on Predatory Gambling for New York State

 

 

 

 

 

 

 

Q You say that 1.4% of adults are gambling addicts and another 2.6% ,problem gamblers.  I accept  that this 4% are out of control,  are a drawdown  on  society.   Yet  4% is not a lot.  Why should the other 96%  be kept from doing something they can control ? 

 R Defeat of  the “casino amendment” in November would  not deprive that 96% of access to legalized predatory gambling.   New Yorkers, as the Governor said last year.
are surrounded by it.  There are thousands of Lottery outlets, more than a dozen “racinos” (which the Governor said in his May 9 2013 press conference are basically casinos) and five class III tribal casinos with table games staffed by humans.  Nearby  states are flush with casinos or about to build them.

Q  But many gamblers want full-fledged casinos.  That’s why people say parking lots at casinos in nearby states are full of cars and buses from NY.   The hidden costs those visitors rack up are externalized (“charged to”)  NY society,  yet all of the money left behind stays in other states  as casino profits  and  taxes on  gaming revenue.  If NYS is to get a piece of the action on its own residents and “own” tourists,   give us new casinos in-state.

R  If  new casinos in NYS could recapture 100% of the traffic now going out-of -state without creating new gambling addicts or problem gambler, NYS would have less net loss from gambling than now.  It  would  still not be near  break-even.  Worse, convenient casinos will create gambling addicts and problem gamblers.  The recapture solution to out- of-state travel  then becomes part of the problem.

Q You are a prohibitionist. 

R  Not really.  Opponents  of  the gambling amendment  are not trying in 2013 to close every gambling  joint in the state.  We just want to make access to casinos for NYS residents and visitors no easier than it is now. 

Q Come on!   You want to deny 100%  of  New Yorkers a benefit  because  4%  can’t take care of themselves.  That’s letting the tail wag the dog!

R  The dark side of convenience is the unavoidable creation of new addicts and problem gamblers.  How strong the effect is across all settings cannot be reliably stated.  Intuition says that a single casino set  in a metropolis previously casino-free will create more problem gamblers than a similar one new to a rural area in which there is already a casino 30 miles away.  Twice as many?  Five times?  Ten times? No one can say. 

Q  OK.  NYS would add some more gambling addicts; we already have 170,000,     What’s a few more?

Q  “Few”  may be thousands, and none of them “is an island entire of itself.*”  The evil of  predatory gambling is not just torment to the problem gamblers whom the cartel exploits  for high profit; it is the damage to innocent people who trust them – spouses and domestic partners, children, parents, siblings, other relatives,  neighbors, business associates,  financial institutions like banks, credit unions or insurance agencies.  For every problem gambler there are seventeen other parties affected, wrote Politzer et al ** , citing Lesieur.  They are never affected to the good.  Those who condone predatory gambling consider expendable — worthless — everyone in the circle of misery around a problem gambler. That is a lot of people in this state: millions.  A society cannot allow this and be just or even pretend to be.

*John Donne, Meditation 17 (1624)

** Politzer Robert M. et al.  The Epidemiologic Model and the Risk of Legalized Gambling: Where Are We Headed? Health Values (1992)  vol.  16 no. 2: 20-27.

Woman with Dead Child, etching by Kathe Kollwitz, is  owned by the National Gallery of Art.  This image is in the public domain.

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Robbing Peter to pay Paul

St Paul's  from flickr 5172661797_d7003e47a8_m

St Paul’s             flickr 5172661797_d7003e47a8_m

5639243328_ce8f602a7b_mStPeter's

 

 

 

 

St Peter’s ,  photo from Flickr

 

     Some cynic wrote “Whoever robs Peter to pay Paul can always count on Paul’s support.”  Too many people, though they might  hesitate to call gambling robbery, are comfortable with  government’s taking gambling-derived revenues from Peter (the gambler)  and converting them into what looks like a fiscal benefit  to Paul.  Paul here is the citizen whose tax rates were not perceptibly increased when government got revenue another way, from its share of Peter’s losses at legalized gambling.   Paul is expected to be grateful for government’s easing up on him thanks to  Peter’s losses.  To feel that way in good conscience,  though,  he has to think it’s really not “robbery,”  merely  “parting a fool from his money.”

     In NY we are most all Pauls, thanking government for fending off tax rate increases by reaping Lottery money.  There are two things wrong with this state of affairs that should make us change it, hard as that would be.  First, about half the revenue to government from gambling it sanctions is from the losses of addicted and problem gamblers.  To keep “playing,” these people almost always have to take money from others who trust them. Whether predatory gambling literally robs the gambler himself or herself can be disputed.  (See discussion below the “read more”  break.)  That it robs others via the gambler cannot be disputed.  It robs them not only of savings accounts, vehicles, retirement funds, lunch money,  furniture etc., but of reputation, affection and self-esteem.  These others number,  for each affected gambler, as many as 10 to 17 [Politzer et al, 1992 citing Lesieur 1977].

      Then there is robbery going on to keep Paul’s tax rate from rising. Paul can still be comfortable with that, if the identity of the victims is  abstract enough.  He ought also to realize, however, that he is not really benefiting by the apparent flatness of his tax rate.  The money Peter cozened  from his trusting family and associates (referred to as “abused dollars”) are only a piece of the hidden quantifiable socioeconomic costs of gambling.   Counting in all those hidden costs doubles what it costs society to  raise a dollar by tax-on-casino instead of by  stepping up the rate of a conventional distortionary tax like sales tax or income tax. [Earl Grinols (2004), Gambling in America  pp 180-181]

     If Paul feels no compunction about seeming to get a break on his taxes due to revenue  to government from gambling,  still insists  it’s a free lunch,  it’s not.  He gave at the office without knowing it.  Some of his tax money went to criminal justice administration or social services triggered by events in  the gambling exchange.  He is also part of an economy hurt by lost productivity and lost creativity due to gambling.  This is  a touch of rot. Continue reading