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.

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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

 

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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.

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“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.

“Measure Something:” Prevalence of Pathological and of Problem Gamblers

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Most American adults gamble not at all (20-30%) or so little they get no damage from it. The gigantic social costs of legalized gambling move almost entirely through current “pathological gamblers,” who enmesh and drain their families, employers, employees and associates, and   through current “problem gamblers.”   Problem gamblers, more common,  impose each a smaller social cost. The two groups combined make up 4 % of the U.S. and Canadian adult (>18) population.1   Lower estimates for prevalence are also in the literature. 2, 3     CAGNY reports  use the 4% from the update of the Shaffer et al 1997 meta-analysis 4  as it is based on over a hundred studies, not a single survey.

Pathological gamblers (addicts) and problem gamblers combined generate almost all the costs of legalized gambling. Pathological (addicted) gamblers make up conservatively 1.14% of adults in North America; problem gamblers, at least 2.8%. In the U.S. that’s 2.5 million pathological gamblers (addicts) and 6.5 million problem gamblers.

Prevalence is not a good marker of the rate at which new cases occur. If it seems  stable over time, that does not mean no new  problem gamblers are forming. Not at all. To maintain the same prevalence of current pathological gambling, replacement pathological gamblers must  take the place of those who have recovered or died or disappeared.

Prevalence is usually given as the proportion (can be %) of a population that has the condition of interest (in this case a certain level of gambling) at a given moment or at some point in a time interval.  Prevalence can also be a count. It is not the same thing as incidence. Incidence is a rate,  the number of new cases in a time divided by the number at risk. It too can be correctly given as a count of cases.  Incidence, a rate,  must  be written per <time interval>  e.g  ” per year.”

Prevalence is governed by incidence  and  duration. Cases prevalent at a certain time will not be all the same ones as at a different time. Individuals leave the active ( = “past-year”) prevalence pool by out-migration, recovery, death, incarceration or disabling illness. New cases enter the pool. If prevalence, accurately measured,   is  steady over (say)  ten years,  that stability requires  replacement problem gamblers in the stead of those who died; or recovered (one estimate is that 1/3 recover 5 ); or went to jail (more than half of PGs commit prosecutable crimes); or moved to another country. The lifetime prevalence pool is depleted only by death or out-migration.

There are very few figures on incidence of pathological or problem gambling in adults, though in adolescents and college students these are available, and horrifying.  Estimates of incidence of pathological gambling in North American adults must be drawn from changes in prevalence, full of pitfalls. Rapid climbs in past-year or even lifetime prevalence imply relatively high incidence; rapid drops suggest high rates of recovery or death combined with low replacement.

References and notes to “Prevalence of Pathological and of Problem Gamblers”

1. Shaffer HJ, Hall MN Updating and Refining Prevalence Estimates of Disordered Gambling Behaviour in the United States and Canada. Canadian J Pub Health 2001 92(3): 168-172

2. Gerstein D et al Gambling Impact and Behavior Study. Research done by NORC for NGISC http://govinfo.library.unt.edu/ngisc/reports/gibstdy.pdf .

3. Petry N, Stinson FS, Grant B Comorbidity of DSM-IV Pathological Gamblers and Other Psychiatric Disorders. J Clin Psychiatry 2005. 66(5): 566-574

[ NOTE:In this report the lifetime prevalence of pathological gambling is 0.6% and of problem, 2.3%. A past-year figure would be lower.]

4. 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

Using these past-year prevalence figures the Shaffer et al study projected the following figures in millions of persons who were in each category (based on US pop in 1997)

Table 1. Number of persons classed as Problem or Pathological Gamblers, by age group,  USA , millions

 

ADULT                                  YOUTH (age 16-17)   ADULT & YOUTH

Prob     Pathol Both                Prob     Pathol Both                Prob     Pathol Both

5.3       2.2       7.5                   5.7       2.2       7.9                   11        4.4      15.4

IMPORTANT NOTE On p. 43 of Shaffer et al are figures showing an increase in the prevalence of past-year level 3  (abbreviated here to PYL3) between the earlier years covered by their meta-analysis (1977-1993) and the most recent three years (1994-1997). PYL3 in adults went from 0.84% to 1.29%, a statistically significant increase (p<.05). Comparing the same two epochs, lifetime level 2 in adults went from 2.93% to 4.88% (p < .05). The absolute increase in prevalence of PYL3 in adults was 0.45% , the relative increase 154%. When the authors merged all the studies, earlier and later, the higher prevalence figure (1.29%) was lost to view. The lower figure of 1.14 is probably too conservative.

A later paper (Shaffer and Hall Can J Pub Health 2001, referenced above as ref 1 found strong evidence that PYL3 continued to rise in the last years of the study interval. The authors updated the library of studies to review, adding ones published since 1997 and also some 91 studies that had never been published, furnished by their authors. 139 studies with at least one prevalence estimate (some compared two instruments) were analyzed for the 2001 paper. For adults only  Past year level 3 1.46%  lifetime level 3 1.92%.  There was a  positive correlation (r = .313, p<.05) for later year and higher prevalence. The authors found fifteen geographic areas in which earlier and later estimates had been done by the same methods. PYL3 averaged 1.02% in the earlier look, 1.33% in the second (p < .05)

5. Slutske WS Natural Recovery and Treatment –Seeking in Pathological Gambling. Am J. Psychiatry 2006: 163:297-502  The researcher looked at the past-year experience of the 201 persons who had met criteria for lifetime pathological gambling in one of two surveys, found that about a third no longer met criteria for the preceding year. The two surveys are in refs 2 and 3

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Permission to reprint or quote is hereby given by the author as long as the above permalink is cited.

photo image from flickr creative commons titled “16/17”  1925077643_a9ec21bcb4_m

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.

“Poison pill” in Upstate Gaming Act of 2013

5329333422_f79c211100_m alien            Surrender ! Resistance is futile !

The upcoming referendum on whether to amend the NYS constitution and allow “up to seven casinos as prescribed by the legislature” has been subverted by  Governor Cuomo, turned into  an  ultimatum  to all who oppose the  amendment for its expansion of  predatory gambling.  ” Heads I win, tails you lose.”    New Yorkers, even those who favor the amendment,  should be  horrified.  This behavior  belongs to a despot or a cartoon  alien invading the planet, not to a Governor who proclaimed he wants  the people to say yes or no to amending the constitution.  What  happened ?  

Simply put, if the amendment fails, Lottery gets carte blanche to expand instead.   The “Upstate New York Gaming Economic Development Act of 2013,”  passed on 21 June as S 5883 (same as  A 8101), provides in section 32 a. (3)  that if the amendment does not pass referendum, Lottery is authorized to operate  an unspecified number of new Video Lottery Terminal (VLT)   facilities of unspecified size,  not necessarily at race tracks.  The VLT facilities provided for in this  hedge plan would go into the three “regions” of “zone 2” that are not excluded by compacts with Indians, viz. Catskills + Hudson Valley,   Eastern Southern Tier and  Capital Region.  An article originating with AP in Albany  http://online.wsj.com/article/APbabc9a4fefdc488cb8a30eb9ec800e12.html    cites possible numbers (three or four upstate) and possible sizes (up to five thousand VLTs each).  These numbers are not in the bill, but were softly confirmed by a spokesperson for the Governor on June 19. 

Thus a successful  fight against  the amendment would be punished by the imposition of a gambling system probably no better  for New York’s people than  “up to seven” casinos.  [There is no reason to think Lottery would stop at four new slot barns; that was a trial balloon on one day in June.]

The hedge plan unveiled in June was probably  mostly  a “poison pill” for two readily identifiable groups to which  the amendment could bring damaging competition.  One was the Seneca Nation, which as of June 12 was  not yet  “in good standing.”  The next day, however,  the Nation  moved into that status. http://www.indianz.com/IndianGaming/2013/026500.asp    Now assured of no new competition in their territory,  they would cease to  threaten  the amendment.  The  pill was no longer toxic to them.  The other group, the  New York Gaming Association (the racino lobby)   had come out on June 10th  against the Governor’s Program Bill, as it was then called.  [To see that press release, which on the web site is undated,  go to their web site and click on press releases .  http://www.newyorkgaming.org/Home.aspx    ]  NYGA  voiced fears that new casinos would take away 85% of their action.  They  were quickly placated with changes ensuring that the horse industry would not take a loss in  the large (> $200 million last year) income stream it counts  on from racino  VLTs.   Any new casinos  would have to pitch in to keep parity.  Not long before June 21, the NYGA reversed its stand in a second press release [also on their web site, undated].

The “poison pill,”  in Section 32 was made by developments around mid-June less baneful  to the two richest groups that want predatory gambling in NYS but not competition.  It still  had   had potency as of voting day, June 21.  It could  deter opposition to the  amendment  that might spring up if any of the May-June agreements with Indian casino operators fell through before Election Day.  On out-of-state casino interests, however, it would probably have little effect.    Though expected by many to work [under false flags]  against the amendment, these groups  would would not see section 32 as virulent to them.   They  would surely prefer that if NYS must  boost its  predatory gambling it go with slot barns, not  full-scale casinos. 

The constituency to which the poison pill is most bitter and potentially paralyzing is opponents of predatory gambling.  We are perhaps collateral casualties of the Governor’s tactics  to neutralize, or actually turn,  rich profit-seeking opponents of the amendment . Or (this may be  folie de grandeur)  the Governor  sees us as a threat to his objective, a threat that needs to be squashed.   We don’t need to know.   In either case,  the Governor and those who craft his bills  have done  their utmost to make the referendum meaningless.      Instead of a plebiscite on whether to amend the constitution it has become a double bind: casinos or  VLT barns.    See the New York Post http://www.nypost.com/p/news/opinion/editorials/gambling_man_FRWmSBGiGVE5KXK1w58IcM

The  VLT  barn  hedge plan has been latent since September  2001, when the legislature  at the urging of Gov. Pataki  authorized   thousands of  VLTs  at racetracks as  “racinos.”  In the words of Gov. Cuomo (May 9 press conference)  “The racinos were created to get around,  frankly, the existing state law and they were in many ways created as a loophole, but for all intents and purposes they are a casino.”     Why VLT proliferation was not Gov. Cuomo’s plan  A  for gambling expansion is for speculation.  Let’s suppose that in early 2012 he truly  believed  (unlike us) that casinos bring “economic development”  that VLT barns would not.  Let’s credit him with a desire to play by the rules and respect the Constitution,  as long as he looks like winning. This wish foundered in June 2013 when polls showed his approval rating going down and no clear margin of victory for a future amendment.   Time for the ace in the hole.  

Coalition Against Gambling in New York will oppose the amendment even if the hedge plan in section 32  forces  an odious alternative to casinos.  If the amendment fails as it deserves to, we and other groups allied against predatory gambling will seek legislation  to amend  section 32 and defang it.

The opinions expressed herein are those of the writer, Stephen Q. Shafer and do not necessarily reflect opinions of all members of CAGNY.  Permission  is granted to reproduce this text in whole or part as long as the permalink attached is cited.

Buying Silence

    

West Canada Creek 8648883400_05b7c72b4bwestcanada

West Canada Creek 8648883400_05b7c72b4bwestcanada

 

 

 

 

 

 

 

 

 

 

     NYS  Legislature should not approve the  pact between NYS and the Oneidas  

     The provisional deal (ref.  6, below) of 16 May between the State and the Oneida Nation of Indians, if not literally vote-buying, is arrant influence-peddling. Dead set on adding   commercial casinos to his legacy for New York, Gov. Cuomo has sold  out the rights of several parties for the contracted silence of the Nation about  his proposed “casino amendment.”  Those  non-ONI parties, historically discordant,  differ on why they object to the pact.   They agree it is a bad deal for everyone except the ONI.  Casino promoters elsewhere could also benefit; so might some residents of the proposed ten-county exclusivity area who sensibly  don’t want another casino close to home but myopically  don’t mind it somewhere else.  

     The county governments of Oneida and Madison Counties have acceded to the pact, under duress.  (ref. 2)  The NYS Legislature, the Attorney General  and the Federal Government must also approve it.  There are good grounds why they should not.

     Opposition to all or some terms of the pact has come from the Cayuga Nation (ref. 5); from traditional Iroquois besides Cayugas (ref. 1); from the Conservative Party of NY; from Republican Assembly Member Claudia Tenney (ref. 3) ; and from the towns of Vernon and Verona.  (ref. 5)  For most of these entities, however,   the implications for expanding predatory gambling are not  the crux of their opposition.   

     To the Coalition Against Gambling in New York (CAGNY), a statewide organization, it is obvious that the  pact was crafted  just to prevent  the ONI  from using its money to fight the “casino amendment,”  some outcomes of which could bring  competition to Turning Stone.  CAGNY totally opposes the proposed amendment.  We thus oppose the ONI pact,  which if ratified at all levels would make passage of the amendment more likely than  if the  ONI were against it.  Our dismay with the pact, however,  is  less that it could smooth the path to more casinos in the state than that it gives further evidence our  Governor will stop at nothing  to gain his ends by any means.    

     To paraphrase  Cornelius Murray,  Esq. , attorney for Verona and Vernon, as he spoke  in a press conference on June 4, “This is not about gambling.  It’s about Constitutional law.”  Mr. Murray’s concerns about the law are detailed in his letter to the NYS Attorney General (link in ref. 5).    This is not a “win-win.”  It’s a “win big-lose big.”

     Read further  for brief summary of the proposed terms of the pact is below and for the listed references.

Continue reading

Assets for Sale

Peering over the Edge Flickr CC

Peering over the Edge
Flickr CC

Governor Cuomo  spoke in his press conference on May 9, 2013 (at  minute 46:16)   about setting tax rates on the new casinos he wants to see and the competition he expects among bidders.  He continued  “I think we have an asset to sell.”

He did not say what the asset is. It must be something big casino companies want. 

Greek yogurt production capability?

Deep shale natural gas?

Apple production capability?

Olympic-quality winter sports settings?

Maple sugar production capability?

Nanotechnology infrastructure?

 None of the above.

What else could that asset be other than a population to be trawled for customers?    New York’s people are on the block.

Casinos depend for half their “gross gaming revenue” on the small minority of their customers who are pathological or problem gamblers.*  These categories make up a very small fraction (about 4%) of the adult population.  To reward owners richly,  the casinos must maintain this small sector AND  replace each person in it as he or she recovers, dies, goes to prison, gets deathly ill or moves out of range.  The asset that’s really up for grabs, the mother lode, is current and future pathological and problem gamblers

Yet this is not all that’s for sale.   Each of these gambling addicts or problem gamblers has hidden assets that can be tapped through him or her.  Those are the fiscal and emotional resources of many non-gamblers who enable the addiction while the gambler betrays their love or trust .

The casino companies don’t just buy the opportunity to capture or create compulsive gamblers,  They buy a network of pipelines through each one of those afflicted gamblers to drain six, eight or a dozen other people.   Lesieur* put the number at  seventeen.

This is the asset for sale.  What are we bid?

 Grinols, Earl L. and  J.D. Omorow.  J Law and Commerce (1996-97) 16: 49-87

Lesieur, Henry   The Chase, 1976

The above text was distributed by hand to the offices of all legislators on June 4 and read at a press conference held by CAGNY that morning in the legislative office building.  It does not necessarily represent  the opinion of all CAGNY members.  Permission is granted by the author, Stephen Q. Shafer, to reproduce in whole or in part as long as the permalink above is cited.

Negative Expected Value

 

sheep

Negative Expected Value:   The Ultimate Triumph of Loss.

Summary: Though  only one form of predatory gambling,  lottery  illustrates how and why predatory gambling drains not only the gambler  but also everyone around each gambler from whom he or she can winkle or steal a dollar to pursue “the chase.”   Using a simple model of lottery, this essay distinguishes “wins” from net gain, showing that unless a compulsive  gambler quits, “extinction” is inevitable.  Every rational person knows this. Sad to say,  however, most people deny  how badly  trusting persons around the gambler will be hurt as the gambler fends off   the inevitable.  “The gambler’s ruin” is not confined to  him or her.   This is the central evil of predatory gambling.

Adam  Smith wrote about  lottery  “That the chance of gain is naturally overvalued we may learn from the universal success of lotteries.  The world neither ever saw, nor ever will see, a perfectly fair lottery; or one in which the whole gain compensated the whole loss; because the undertaker could make nothing by it . . .  There is not, however, a more certain proposition in mathematics than that the more tickets you adventure upon, the more likely you are to be a loser.  Adventure upon all the tickets in the lottery, and you lose for certain; and the greater the number of your tickets the nearer you approach to that certainty.”   Wealth of Nations book I Chapter 10 p 153

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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