IGWB Editorial

When the National Gambling Impact Study Commission (NGISC) opened its doors two years ago to study the social and economic impacts of gaming in the United States, our opponents were certain that the results of the commission’s work would lead to a blanket condemnation of our business. That was a serious miscalculation.

The commissioners held hearings across the country and heard testimony from hundreds of witnesses and gathered thousands of pages of information. The final report, issued June 18, 1999, confirmed the important and dramatic contributions the commercial casino gaming industry makes to communities across the United States. It also put to rest the erroneous anti-gaming rhetoric, myths and superstitions regarding regulation, crime and social problems.

GAMING ACCEPTABLE TO AMERICANS AND BEST REGULATED AT STATE AND LOCAL LEVELS

The commission found that gaming has become an accepted part of our lives, from both a social and economic standpoint. The NGISC report noted that:

As it [gambling] has grown, it has become more than simply an entertaining pastime: The gambling industry has emerged as an economic mainstay in many communities, and plays an increasingly prominent role in state and even regional economies.

The commission also determined that the gaming industry is best regulated at the state and local levels, reporting in a recommendation that:

…states are best equipped to regulate gambling within their own borders with two exceptions—tribal and Internet gambling.

GAMING A DIVERSE INDUSTRY AND AN ENGINE OF ECONOMIC GROWTH

The commission report makes it clear that gambling in the United States is not monolithic and that there are very distinct types or classes of gambling with different impacts on society:

Commercial casinos
Tribal casinos
Lotteries
Pari-mutuels
Charitable
Internet
Sports Wagering (only legal in Nevada, Oregon and Delaware)
Non-casino electronic gaming devices (“convenience gambling”)
Illegal
In studying the economic impacts of gaming, the commission reported that “destination type resorts” offer major economic advantages and benefits.

Research conducted on behalf of the Commission confirms the testimony of…casino workers and government officials that casino gambling creates jobs and reduces levels of unemployment and government assistance in communities that have legalized it.

A study performed by Adam Rose and Associates for the National Gambling Impact Study Commission also found that:

…a new casino of even limited attractiveness, placed in a market that is not already saturated, will yield positive economic benefits on net to its host economy.

AMERICANS GAMBLE RESPONSIBLY

For years, our opponents have used the specter of problem and pathological gambling to smear our industry. They have claimed that between 10 percent and 20 percent of adults are pathological gamblers and that the net cost to society from this problem is between $50 billion and $200 billion a year, thereby exceeding any economic benefit brought by the gaming industry. We have steadfastly denied these claims, and the information collected by the commission came down on our side.

Research funded by the NGISC found that the overwhelming majority of Americans gamble responsibly. As the report states:

Today, the vast majority of Americans either gamble recreationally and experience no measurable side effects related to their gambling, or they choose not to gamble at all.

The findings of studies on pathological gambling that were conducted for the commission by the National Research Council and the National Opinion Research Center conclude that:

The range of pathological gambling prevalence is somewhere between 0.6 percent and 1.5 percent.

The yearly cost to society is about $5 billion, not $50 billion to $200 billion. This $5 billion cost compares to the annual $166 billion cost to society for alcohol, $125 billion annual cost for heart disease and $72 billion annual cost for tobacco.
Although the number of people who do not gamble responsibly is very small, they deserve attention and help. And, the commission report acknowledges that we in the commercial casino gaming industry are acting to help those in need, pointing out that:

…the largest source of funding for research on problem and pathological gambling is the commercial casino industry.

DISPROVING MYTHS AND SUPERSTITIONS

Gaming opponents have long used myths, superstitions, half-truths and full lies to build their case against our industry. Here again, they took a hit from the findings of the National Gambling Impact Study Commission, which disproved once and for all the fabrications of those who oppose gaming. Among the many fabrications that have been finally put to rest are:

The claim that casinos are controlled by organized crime. As the commission report states:

All of the evidence presented to the Commission indicates that effective state regulation, coupled with the takeover of much of the industry by public corporations, has eliminated organized crime from the direct ownership and operation of casinos.

The contention that gaming leads to bankruptcy, causes crime and child abuse. The National Opinion Research Center concluded:

…the casino effect is not statistically significant for any of the bankruptcy or crime outcome measures or for the infant mortality measure (which is as close to a common measure of child welfare as can be obtained).

The belief that the commission would find a “smoking gun” that the industry targets compulsive gamblers. The commission heard testimony from a marketing panel during its hearings that:

The marketing techniques practiced by the commercial casino gaming industry are the same as those practiced by all commercial industries. This testimony also demonstrated that targeting pathological gamblers, compulsive or otherwise, would be bad business

PROBLEMS WITH THE NGISC REPORT

Unfortunately, although 90 percent of the commission’s 70-plus recommendations were either suggested by our industry, supported by our industry, or are already being implemented by our industry, it includes several recommendations and much rhetoric that do not conform with the facts presented to the commission and that paint an inaccurate and biased picture of the gaming industry.

Two recommendations stand out: the recommended ban on all legal sports betting on collegiate events and the recommendation that states adopt tight restrictions on political contributions to state and local campaigns by gaming interests.

The commission’s goal in supporting an end to legal sports betting is aimed at maintaining the integrity of college and other amateur sports. While that’s an admirable goal, the record shows that illegal betting on collegiate sports is the problem, not legal wagering. This recommendation is aimed at the wrong target. Furthermore, legal sports books can be used as a valuable instrument of law enforcement. In fact, recent point-shaving incidents involving college sports events were brought to the attention of law enforcement by the legal sports books in Nevada.

As to the recommendation that political contributions from gaming interests be restricted, the hundreds of thousands of individuals who work in our industry, along with the millions of people who invest in it, deserve to participate fully in the political process of this nation. To deny them this opportunity would start the country down the slippery slope of discrimination against other legal businesses and industries.

Also, some of the language and statistics used in the commission report are unacceptable. For example, there has been much attention focused on the so-called “moratorium” recommendation on gambling expansion. The commission never called for a moratorium; it recommended a “pause” and suggested that some policy-makers may wish to impose a temporary moratorium on gambling expansion until they have gathered all the facts.

The commission’s decision to accept a fabricated “at-risk” category to identify individuals who may have gambling problems is both wrong and counterproductive. This decision flies in the face of solid scientific practice and serves no purpose other than to create the impression that more men and women have gambling problems than is honestly the case. Those who do not gamble responsibly deserve help and compassion, but we can only do an effective job for these people if the information we receive about them is accurate.

While there are elements of the National Gambling Impact Study Commission’s final report that are disappointing and questionable, it presents a fairer and more accurate picture of the commercial casino gaming industry then has sometimes been presented in the past. Our battle will continue against those who would like to impose their narrow views on others, but we are now armed with a government report that sets the record straight on a number of key issues, correcting many of the distortions disseminated by our opponents throughout the years.

SIDEBAR

Excerpts from the National Gambling Impact Study Commission final report:

[G]ambling has quickly taken its place in mainstream culture.

It is clear that the American people want legalized gambling and it has already sunk deep economic roots in many communities.

[E]conomic benefits, including improvements in community infrastructure, particularly in transportation, as well as a reduction in public assistance spending are evidenced in the Commission’s research.

The Commission… heard from a number of local officials in jurisdictions where casinos are located. … Without exception these elected officials expressed support for gambling and recited instances of increased revenues for their cities. They also discussed community improvements made possible since the advent of gambling in their communities and reviewed the general betterment of life for the citizenry in their cities and towns.

The Commission recommends to state, local and tribal governments that (when considering the legalization of gambling or the repeal of gambling that is already legal) they should recognize that especially in economically depressed communities, casino gambling has demonstrated the ability to generate economic development through the creation of quality jobs.

The Commission recommends to state, local and tribal governments that (when considering the legalization of casino gambling) casino development should be targeted for locations where the attendant jobs and economic development will benefit communities with high levels of unemployment and underemployment and a scarcity of jobs for which the residents of such communities are qualified.