The National Gambling Impact Study Commission (NGISC) is expected to issue its final report this month. While we don’t know the specifics of the report at press time, there are some things we do know.
If the committee considers the entirety of the evidence presented as both testimony and research, the final report should reflect the overall positive economic and social impact of casino gaming. It should also find that while a small percentage of Americans cannot gamble responsibly, the casino entertainment industry has been proactive in addressing this problem by funding independent, peer—reviewed research on pathological and youth gambling, and conducting employee and public education campaigns to raise awareness about this issue.
ECONOMIC IMPACT OF GAMING ON THE NATIONAL ECONOMY
Adam Rose of Pennsylvania State University conducted a study of the economic impact of gambling for the NGISC, The Regional Economic Impacts of Casino Gambling: Assessment of the Literature and Establishment of a Research Agenda. Rose discussed his findings with the commission, reporting that:
[M]y overall conclusion…is that the aggregate direct and indirect regional economic impacts of the construction, operation and taxation of casinos are significantly positive. Broader economic costs are not trivial but they do not cancel out the more conventional gains. Broader negative impacts are offset by some longer—term positive impacts from tax revenue and subsequent spending on education, infrastructure, and redevelopment.
Eugene Martin Christiansen, a principal of Christiansen/Cummings Associates, Inc., performed an overview of legalized gambling for the commission, An Overview of Gambling in the United States. He reported to the commissioners that:
[T]he $51 billion consumers spent on legal commercial games (in 1997) is about what they spent on movie tickets, spectator sports, cruise ships, video games, recorded music and theme parks combined. This is a very substantial expenditure, and commercial games are important drivers of the U.S. economy. At the lowest estimate…aggregate employment provided by legal gambling industries can hardly have been less than 600,000 jobs in 1997. In all likelihood the actual number was higher. In 1997 about $18.5 billion of the $51 billion consumer expenditure on commercial games was paid directly to government in…gambling privilege taxes.
SOCIAL IMPACT OF GAMING IN THE UNITED STATES
The commission heard a number of public officials testify as to the positive, progressive social benefits brought to their communities by the gaming industry. Among these was Jeff Griffin, mayor of Reno, Nev., and chairman of the U.S. Conference of Mayors Task Force on Gaming.
In my city of Reno, gaming is part of a diverse economy, with non—gaming businesses relocating to Reno due to an ideal tax structure and an enviable quality of life. With legalized gambling in Nevada, citizens of our communities benefit from the absence of state income taxes, corporate income taxes, and the presence of an expanding economy resulting from this tax structure.
Kenneth Murphree, county administrator for Tunica County, Miss., told the commission that:
The gaming industry has…had a dramatic effect on county government and its ability to provide services. We’ve been able to implement a housing rehabilitation program for elderly and handicapped homeowners. You have to understand there is (sic) tremendous needs for improvement to substandard housing and we’re able to address those issues now. We have a youth recreation program with a brand new $2 million facility. [I]t’s able to get our children where we can have good recreation, good leadership and be exposed to those things that they formerly just weren’t getting in Tunica County. We’ve increased elderly services for meals and transportation and for homemaker services.
Kenneth LeFevre, a state legislator from New Jersey, testified before the commission on state social programs that benefit from casino funding.
I’d like to mention two of the largest individual programs funded primarily by casino tax revenues because together they receive more than half of the tax dollars. I’m referring…to the Pharmaceutical Assistance to the Aged or Disabled, or PAAD, and the Lifeline Program. The Lifeline Program is…largely funded by the casino tax revenue and has an annual budget of about $30 million. A needy senior or disabled citizen can receive $225 in just one year to help defray the cost of their heating bill. Statewide more than 140,000 senior and disabled citizens receive this assistance.
The National Gambling Impact Study Commission looked carefully at the issue of disordered gambling. This phenomenon is complex and difficult to understand and has led to the development of disparate and often conflicting information about the number of people who suffer from gambling addictions. Opponents of gaming have put the number as high as 11 percent of the population, but national studies conducted for the commission found the numbers to be considerably smaller.
A study conducted for the commission by the National Research Council (NRC) of the National Academy of Sciences, Pathological Gambling: A Critical Review, concluded that:
…1.5 percent of adults in the United States, at some time in their lives, have been pathological gamblers. We estimate that, in a given year, 0.9 percent of adults in the United States, or 1.8 million, are pathological gamblers. Men are more likely than women to be pathological gamblers, and the proportion of pathological gamblers among adolescents is higher than it is among adults.
A study conducted by the National Opinion Research Center (NORC) at the University of Chicago, Gambling Impact and Behavior Study, reported estimates similar to those found by the NRC in the category of pathological gambling.
…pathological gamblers…comprise about 0.8 percent of the adult population based on the Random Digit—Dial (RDD — telephone) sample alone.
The commission was supplied with detailed information on the manner in which the casino entertainment industry is developing and adopting comprehensive voluntary guidelines to promote responsible gaming programs and practices. These guidelines pertain to:
- Disordered and Underage Gambling
- Casino marketing and Advertising (including Marketing and Advertising Guidelines Pertaining to Children and Minors)
- General Voluntary Guidelines: Children and Minors
A number of witnesses also testified on the activities of the gaming industry in the area of responsible gaming, including Reece Middleton, executive director of the Louisiana Association on Compulsive Gambling:
I’ve worked with a number of casinos in training their employees in signs and symptoms of compulsive gambling and underage gambling; I’ve worked with a number of casinos in setting up procedures and policies with regard to intervention officers of the day or intervention officers as a group or a category, senior supervisors, and so on. It’s unusual for me to go a week without receiving more than one call from a senior casino executive about a customer that they have a concern about, and they refer those persons to our office for evaluation, assessment and referral into treatment.
The commission also heard testimony on the positive activities of the National Center for Responsible Gaming (NCRG), established in 1996 by the casino industry to fund research on pathological and youth gambling. Twenty—two gaming entertainment companies and one foundation have committed almost $5 million to the National Center. Since it was founded, the National Center has awarded 19 grants totaling approximately $2.5 million to respected universities and medical centers such as Harvard Medical School and Washington University School of Medicine.
The deliberations of the National Gambling Impact Commission will soon culminate in a report to the president, Congress and state governors. We are confident that — while recognizing that certain problems must be more thoroughly studied and understood — a truly “comprehensive, factual, and legal study of the social and economic impact of legalized gambling” will find that the gaming industry is a positive and responsible contributor to our society.
More complete information on the material contained in this article is available in The 1999 Industry Report published by the American Gaming Association (AGA). For a copy of the document, please fax a written request to the AGA at 202-637-6507.
The National Gambling Impact Study Commission also heard testimony on two controversial issues often associated with the gaming industry: crime and bankruptcies.
Twenty—four sheriffs and chiefs of police from gaming jurisdictions around the country submitted Crime and Gaming: Statement of Findings to the commission. This statement by the law enforcement officers indicated that they saw no connection between gaming and crime in their jurisdictions.
New Jersey Attorney General Peter Verniero testified before the commission that:
[O]ther statistics show that when adjusted for ever increasing visitor volume…crime is actually lower today then before the advent of casinos. In 1977, prior to casinos, the visitor adjusted crime rate was almost 70 crimes per 1,000 people. In 1996, this number dropped to fewer than 53 crimes per 1,000 people, a decrease of almost 25 percent.
Bob Waterbury, executive director of the Mississippi Coast Crime Commission, reported to the commission that:
Our crime office has no direct evidence to indicate that casinos have caused an increase of crime along our three—county coast from 1994 to 1997.
On the issue of bankruptcy, the commission heard from Rudy Cerone, an active member of the American Bankruptcy Institute and the immediate past chair of the Bankruptcy Section of the Louisiana State Bar Association. Cerone told the commission:
[T]he increase in consumer bankruptcies has little or nothing to do with gambling in the gross amount. It’s mainly credit card companies pushing their products on the consumers and the ease of the bankruptcy laws allowing consumers an easy way out. Those are the two main factors for the great rise in bankruptcies, not only here in Louisiana, but across the country.
Furthermore, the National Opinion Research Center (NORC) at the University of Chicago performed a survey for the commission, compiling and examining information from 100 randomly selected communities as well as 10 communities within 50 miles of a casino. This survey found that casino proximity did not contribute to increased bankruptcy, crime or infant mortality.