U.S. News & World Report

Letter to the Editor
U.S. News & World Report
2400 N Street, NW
Washington, D.C. 20037—1196

Dear Editor:

Your recent article, “Is Legalized Gambling Becoming Unsinkable?”, is a classic case of subjective reporting. Your article contained only one—sided, biased information from anti—gaming zealots and an occasional editorial comment from the author. I found it disappointing that there was no attempt whatsoever to offer any balance to the anti—gaming stance taken in your article. I saw no mention of any of the information I provided to Mr. Shenk in the lengthy telephone discussion I had with him in preparation for his piece.

Anti—gaming advocates like to take credit for gambling initiatives that have been defeated in recent elections. While there is no question that there have been defeats, gaming opponents often fail to tell the whole story. Here are some points your article doesn’t include: In November 1996’s election, voters in 13 states were asked to consider various state and local gaming referenda. Pro—gaming initiatives passed on the state level in Arizona and Michigan, while local option votes succeeded in Indiana, Louisiana and West Virginia. You also left out the fact that in New Orleans voters approved land—based casinos by more than 2/3 majority. Additionally, all six current riverboat parishes in Louisiana voted to keep casinos legal, and 23 parishes that currently do not host riverboats voted in favor of them. Considering that most gaming initiatives are usually passed by state or local legislatures, these referenda victories are quite substantial and represent the choice of the people.

I must also correct your article’s inference that gaming is a direct cause of personal bankruptcies. There is no correlation between bankruptcies and casinos, although this claim has been widely propagated by anti—gaming advocates and the media. Most experts agree that soaring bankruptcy rates are caused by the ease in receiving consumer credit and by relaxed bankruptcy laws. A recent USA Today series that offered a detailed analysis of the increase of bankruptcies in the United States listed the two most common reasons for bankruptcies as: credit card bills, which account for 63 percent of bankruptcies, and job loss/pay cuts, which account for 50 percent. Only 2 percent of bankruptcy filers cite gambling debts as a major reason for their bankruptcy.

Although the United States economy is enjoying a period of unprecedented prosperity, personal bankruptcies grew 41 percent between 1994 and 1996. According to a recent study, in 1996, the states with the highest bankruptcy rates were those with no casino gaming. The eight states having the highest percentage of increases were: Hawaii, Arkansas, Maine, Vermont, North Carolina, West Virginia, Pennsylvania and New Mexico. Out of these states, one of them — Hawaii — has no legalized gaming whatsoever, and four of the remaining seven states have no casino gaming.

Gaming opponents, and your article, insist that social costs wrought by gaming exceed the benefits. One of the ways we have always judged growth and progress in this country is by examining the numbers of those who must resort to public assistance. The lower these numbers, the better a community is faring. Recent studies conducted by Arthur Andersen have revealed that the gaming industry employs more than one million men and women in this country, either directly or indirectly, and the average salary is $26,000. Arthur Andersen’s micro study revealed that in Joliet, Illinois; Bossier City/Shreveport, Louisiania; and Biloxi/Gulfport, Mississippi, social costs have fallen, not risen, after the introduction of gaming. In all three areas, there has been a sharp decline in public assistance, such as welfare, food stamp and Aid to Families with Dependent Children (AFDC) programs.

As gaming opponents take credit for the closing of the Silver Eagle, I must once again remind them, and you, that the reason it closed was strictly revenue—driven — nothing more, nothing less. No one is claiming that the gaming industry is a magic economic silver bullet that is right for every community — the Silver Eagle is a clear example of a place where it didn’t work. But if gaming is made part of a carefully—crafted economic development plan, gaming has proven to help many communities prosper.

Sincerely,

Frank J. Fahrenkopf, Jr.

cc:  Josh Shenk, Senior Writer
Lee Rainie, Managing Editor