While government-sanctioned gambling is often trumpeted as a new source of revenue, a 2013 study shows shows the staggering cost of problem gambling. This national Australian report reveals that the social and economic cost of problem gambling could total up to $2.8 billion per year.
According to Nevada Gaming Control Board statistics, there were about 197,000 slot machines in that state that won roughly $4.8 billion from gamblers in 1997. By 2007, the number of slot machines increased just 2.5 percent to 202,000, but the amount they won from gamblers jumped 72.9 percent to about $8.3 billion. This is primarily because slot design became far more advanced in fleecing and exploiting users.
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In this Reuters piece, David Cay Johnston examines the shift in 11 states that shows, lotteries, the most heavily taxed consumer product in America, generate more revenue than state corporate income taxes. For example, the Rhode Island Lottery netted the state more than $3 for each dollar of state corporate income tax in fiscal 2009. Johnston also spotlights how the increasing trend toward easy reliance on lotteries has not translated to increased revenue for states.
In 1997, Dr. Quinn founded the South Carolina Center for Gambling Studies and directed a statewide study of Video Poker’s impact on South Carolina. This study outlined the pattern of devastation Video Poker was having on average citizens and demonstrated the uniquely addictive nature of electronic gambling. Dr. Quinn’s study and a follow-up study with Dr. William Thompson of UNLV focusing on the economic impact of Video Poker in South Carolina, contributed greatly to demise of Video Poker in South Carolina.
Here are some key findings from the research:
1. The combination of electronic gambling and convenience venues is extremely addictive and destructive.
2. Minorities and women in particular appear disproportionately vulnerable to video poker.
3. People often gamble more often and/or longer when they are induced.
4. Sometimes people gamble and develop pathology because they have the opportunity.
5. The pathology associated with video poker, unlike other forms of gambling, may prove to be largely non-transferable.
6. The long term economic and social costs associated with gambling are often ignored by political processes obsessed with short term and visible financial gain.
When riverboat gambling came to Iowa in 1991, limits were placed on the amount of money people could lose and gambling could only take place when boats were cruising along the river. By 1994, these betting ceilings had been removed, cruising requirements were relaxed, and land-based slot machine locations were legalized. Why is this important? Because it highlights that the predatory gambling industry constantly pushes past initial limits to expand its reach into citizens’ wallets.
There has been many reports in recent years regarding the decline in the horse racing industry. In August 2011, the Associated Press released another story stating that there was “a generally unfavorable public view of racing, a long and frustrating learning curve for new bettors and increased competition from casinos and other forms of gambling as central to the sport’s decline.”
The predatory gambling industry does not always readily admit that the vast majority of their profits come from a small portion of their customers. However, in this article from the Chicago Tribune below, a casino marketing officer does just that. The reporter writes that “managers are…pushing casino membership, with special previews this weekend for VIPs and Des Plaines residents who were the first to join the club.” Typically, marketing officer Suzanne Trout said, members make up 20 percent of casino clientele but generate 80 percent of the revenue.” They know who the out-of-control gamblers are in their facilities.
In this Ontario population survey, researchers discovered that only 6% of problem and pathological gamblers sought treatment for gambling addiction (including attending self-help meetings or accessing self-help resources.) They also acknowledge that more research needs to be done on “the barriers to seeking treatment, both objective and perceived, encountered by gamblers at different levels of problem severity, as well as the triggers that motivate them to take the step of actually seeking help.” Interestingly, the researchers also found that while the use of lifetime gambling treatment services was higher than in other North American gambling surveys, for Ontarians with a lifetime diagnosis of alcohol abuse or dependence, the rate of treatment seeking was much lower. They speculate that this may be partially due to the fact that “gamblers may be struggling with more, different, or in some cases, more daunting obstacles to seeking treatment compared with people with alcohol problems.”
Treatment Seeking Among Ontario Problem Gamblers: Results of a Population Survey
A study by Dr. David Phillips, of the University of California in San Diego, has found that cities with increased gambling have higher suicide rates, and according to Dr. Phillips, this is no coincidence. It is already known that gambling losses can drive people to do things they normally wouldn’t, for example, embezzle large amounts of money to pay for their debts. However this study shows that gambling losses also causes an increased risk for suicide, which is seriously troubling news considering how much gambling has expanded in the US in recent years. Below is a copy of the study, as well as a New York Times article summarizing its findings.
This article explains how reel electronic gambling machines (EGMs) have been designed to mislead players and have directly contributed to the high rate of problem gambling: “Unbalanced reel design must be a major factor, if not the major factor, in the maintenance of problem gambling principally because the gambler unconsciously believes he or she cannot lose.” Unlike table games, EGMs offer widely different odds of winning, which the authors compare to loaded dice or rigged carnival games. “The fact that the players do not know the rules makes the reel gambling machine unique amongst gaming devices. Not only are the players ignorant of the rules but the rules vary from machine to machine and neither the gaming industry nor the regulators disclose them. As far as transparency is concerned, the standards applicable to reel gaming machines are totally out of step with all other forms of gaming.” The authors make a strong case for establishing uniform standards, banning biased, “virtually-mapped” reels on EGMs and providing more transparency regarding the player’s chances of winning.
