Drawing on research conducted in Las Vegas among game developers and gamblers, MIT Professor Natasha Schull provides an in-depth analysis behind the design and technology of electronic gambling machines.
2016
National Report Concludes That Predatory Gambling Worsens Long-Term Budget Problems
A 2009 report by the Rockefeller Institute of Government at the State University of New York Albany concluded that predatory gambling worsens long term budgetary problems for states. Read the report below to see why states that institute predatory gambling as a means to stabilize the budget are deeply disappointed time and again:
“Income from casinos and lotteries does not tend to grow over time as rapidly as general tax revenue. Expenditures on education and other programs will generally grow more rapidly than gambling revenue over time. Thus, new gambling operations that are intended to pay for normal increases in general state spending add to, rather than ease, long-term budget imbalances.”
Why the Poor Play the Lottery Even More When Times Are Tough
Yale University’s Emily Haisley analyzed why poor people play the lottery even more when times are tough. Read this New York Times story about her report.
Citation: Carnegie Mellon University (2008, July 24). Why Play A Losing Game? Study Uncovers Why Low-income People Buy Lottery Tickets.
Lottery Advertising: The Pathology of Hope
Respected gambling researcher Robert Goodman has called lottery advertising “the pathology of hope” and state lotteries, because of their exemption from truth-in-advertising laws, fully exploit this pathology.
Most industries and companies are subject to truth-in-advertising laws enforced by the Federal Trade Commission. According to these laws, advertising must be truthful and non-deceptive, advertisers must have evidence to back up their claims, and advertisements cannot be unfair. Since 1974, the U.S. Congress has exempted state-run lotteries from these laws. Because of this, governments and lotteries have wide latitude in how they can promote their product, exaggerate chances of winning, and encourage more of our fellow citizens to lose their money instead of saving or investing. All federal laws relative to the lottery can be found in Title 18 of the U.S. Code, Sections 1301 to 1307. The final section, 1307, outlines the lottery’s exemption from truth-in-advertising laws.
These predatory and deceptive practices can be found in the media plans of the lotteries. Ohio’s Super Lotto media plan, for example, stated that lottery promotions should be timed to coincide with the receipt of government benefits, payroll and Social Security payments.
A Nation in Debt: How We Killed Thrift, Enthroned Loan Sharks and Undermined American Prosperity
This essay written by Barbara Dafoe Whitehead appeared in the July/August 2008 issue of The American Interest. It is excerpted and adapted from For a New Thrift: Confronting the Debt Culture, a report released in May 2008 by the Commission on Thrift. Whitehead exposes how anti-thrift institutions like state lotteries, casinos, payday lenders and credit card companies hinder the average American’s ability to save their earnings and get ahead financially. These institutions have been the main contributors to the growing amount of consumer debt accumulated in recent decades. Whitehead calls on the public to reform these institutions and to advocate for a culture based on saving and wealth-building.
Measuring Industry Externalities: The Curious Case of Casinos and Crime
The predatory gambling business dismisses crime increases which parallel the introduction of casinos as being the simple result of increased population. This landmark study by economists Earl Grinols and David Mustard exhaustively reviews the reality of casinos and crime. Most gambling studies are done very soon after the opening of casinos and are funded by gambling interests. This independent academic review is far more extensive in its research, and illustrates the escalating occurrence of crime as local gambling impact “matures.” The study shows that casinos increased crime after a lag of 3 to 4 years. It also shows, by studying the crime rates in counties that border casino host counties, that the data suggests casinos create crime, and not merely move it from one area to another. Neighbor county data indicates that casino crime spills over into border areas rather than is moved from them.
Measuring Industry Externalities – The Curious Case of Casinos and Crime
U.S. Department of Justice Links Gambling and Crime Among Arrestees
U.S. Department of Justice – Office of Justice Programs National Institute of Justice, July, 2004
This report, funded and published by the U.S. Department of Justice studied people who had been arrested in Las Vegas and Des Moines, Iowa. They found significant connections between gambling and crime. “More than 30 percent of pathological gamblers who had been arrested in Las Vegas and Des Moines reported having committed a robbery within the past year, nearly double the percentage for low-risk gamblers. Nearly one-third admitted that they had committed the robbery to pay for gambling or to pay gambling debts. In addition, about 13 percent said they had assaulted someone to get money.
Exploring the Limits of Responsible Gambling: Harm Minimization or Consumer Protection?
Predatory gambling in Australia has matured faster than that in America, providing valuable lessons on addiction. Mark Dickerson, a noted academic from the University of Western Sydney, shared his work at McGill University in Montreal, Canada. Essentially, Dickerson proves conclusively that the only truly “responsible” gamblers are professional gamblers. Gambling is designed, marketed and packaged to carry customers beyond the point of reason and control. Dickerson believes there are methods the gambling operators could employ to ameliorate these dangers. But operators are unlikely to voluntarily jeopardize revenues from its victims. The study provides remarkable insight into how predatory gambling works and what it does to its customers. The second report below was also written by Professor Dickerson and it deals with similar issues as the study above. In the second report he notes the difficulty of identifying problem gamblers and suggests ways the operators could reduce harm.
Lottery Revenue Comes Largely From People Already Receiving Government Support
Studies of lottery spending, including this study from the Federal Reserve Bank of St. Louis in 2008, show lottery revenue comes largely from Social Security, unemployment and other forms of government support. Government, in other words, is paying government — with an enormous amount of money being siphoned off by gambling interests. It also reflects a key reason why predatory gambling worsens state budget deficits over time and taxpayers end up footing the bill.
Citizens Are Not Adapting to Availability of Predatory Gambling But They Are Adapting to Losing More Money Than Ever Before
Some researchers funded by predatory gambling interests attempt to argue that after the introduction of extreme forms of gambling into a community addiction rates will spike but then, over a period of years, addiction rates will decline once people “adapt” to its availability. It is called the “social adaptation theory.” Here is a memo showing why this theory is misplaced and how the only thing people are adapting to is losing more money than ever before.