Thank you for that kind introduction.
We’re all used to hearing and reading the serious accusations that for years have been leveled against our industry by gaming opponents. Claims of gaming causing crime, suicide, bankruptcy and even the Asian financial crisis are not new for us. But in the past year alone, findings from three independent major government studies have discredited their claims.
So you can imagine how strange it was to find myself hearing those same arguments from our same opponents last week, in the very room I heard them two years ago during the hearings of the National Gambling Impact Study Commission in Chicago. Yes, there was Tom Grey (still quoting Grinols and Kindt), there was Valerie Lorenz, Anita Bedell, Tom Coats and a cadre of familiar opponents spewing the same old nostrums and inaccuracies.
But this shouldn’t be a surprise for any of us involved in this industry. We know that those who oppose our business are not swayed by the facts. They will continue to repeat their claims, despite independent scientific evidence to the contrary. It is our responsibility as supporters of the industry to learn the facts and make sure the American public understands them.
Today, I’d like to begin that education process. I’d like to take the time I have today to explain some of the important findings of these recent government studies. It will be your job to take these facts back to your communities and properties to ensure that others have this information.
As most will recall, gaming opponents predicted that the National Gambling Impact Study Commission would send a death knell for legalized gaming in the country. However, the final commission report (even though a majority of the commissioners opposed any form of gaming) recognized the tremendous contribution that casino gaming had brought by way of quality jobs, capital investment and economic development to the new casino jurisdictions in the country. Unhappy with the NGISC report, United States Rep. Frank Wolf (R -Va.), one of the most ardent foes of our industry, ordered the General Accounting Office (GAO) to conduct another investigation of the industry on most of the same topics covered by the NGISC report. Just two weeks ago, the GAO released their report following an in depth investigation of casino gambling in Atlantic City, and I’m happy to report to you that just as with the NGISC report, Congressman Wolf did not get the results he wanted. The GAO found that “[w]hile NGISC and our case study in Atlantic City found testimonial evidence that gambling, particularly pathological gambling, has resulted in increased family problems, crime, and suicides, NGISC reached no conclusions on whether gambling increased family problems, crime, or suicide for the general population. Similarly, we found no conclusive evidence on whether or not gambling caused increased social problems in Atlantic City [the only city examined in the study].” Despite this finding, Rev. Tom Grey told the Las Vegas Review-Journal: “It’s not a matter of studies. We have no trouble finding social costs at the local level, and they are not outweighed by gambling’s economic benefits.” Once again, Rev. Grey and the facts are strangers to one another.
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One of the most difficult issues we have had to face as an industry is pathological gambling. While opponents have claimed that approximately 10 percent of our customers are pathological gamblers, this claim has been totally rejected. Research by the NGISC, the National Research Council of the National Academy of Sciences and by the Harvard Medical School, School of Addiction indicated that approximately 1 percent of the adult population meets the criteria of pathological gambling. As the NGISC pointed out “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.”
We do recognize that a small percentage of the population doesn’t gamble responsibly, and we want to do everything we can to minimize this problem. Since the American Gaming Association was founded five years ago, we have had a commitment to addressing problem gambling in every way the scientific community has told us to. This has been a commitment in words and deeds. In fact, the NGISC acknowledged that the commercial casino industry is funding more research and doing more in the area of responsible gaming than any other source in this nation through the National Center for Responsible Gaming and our individual company responsible gaming programs.
I’m sure you’ve heard the claim that social costs from our industry exceed the benefits. Again, I will cite the federal commission’s research. The National Research Council of the National Academy of Sciences (NRC) found that “[g]ambling appears to have net economic benefits for economically depressed communities.” Additional research for the commission 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.” And NORC determined that “[t]hose communities closest to casinos experienced a 12% to 17% drop in welfare payments, unemployment rates and unemployment insurance.” And the recent GAO report agreed with the NGISC in finding no conclusive evidence that gambling caused increases in social problems in Atlantic City.
While opponents of our industry have made outlandish claims about social costs of $200 billion annually, the commission-funded research conducted by NORC placed the annual cost to society of all forms of gambling - casinos, lotteries, pari-mutuel wagering and charitable gaming, as well as illegal gambling - at about $5 billion. While $5 billion is not an insignificant number, it is helpful to keep it in perspective with the annual cost for alcohol abuse, which is $166 billion, and the annual cost for heart disease, which is $125 billion.
A lot of people like to make the assumptions that increased availability of gambling, access to funds and expanded hours of operation lead to an increase in pathological gambling. While this might seem like a logical assumption, and certainly one perpetuated by our opponents, the facts show otherwise. The first federal gambling commission during the 1970s found that the number of “probable compulsive gamblers” was 0.77 percent of the U.S. adult population, virtually identical to the findings of the more recent federal commission, despite the growth of gambling opportunities during that time. In addition, research conducted for the 1999 federal commission stated, “The availability of casinos within driving distance does not appear to affect prevalence rates.” Similar government-sponsored research in Minnesota, Texas and Connecticut all showed statistically stable rates of pathological gambling in those states, despite significant increases in the availability of gaming.
Another erroneous assumption about our industry is that the more people gamble, the more likely they are to become pathological gamblers. In fact, the NORC research found that while many more people have gambled at least once in their lifetimes (68 percent in 1975, compared to 86 percent in 1999), the number of people who have gambled in the past year has remained relatively unchanged (61 percent in 1975, versus 63 percent in 1999). As Lance deHaven-Smith, executive director of the recently completed Public Sector Gaming Study Commission, explained in his analysis of the National Gambling Impact Study Commission’s final report: “[T]hese findings mean that Americans have become much more likely to have experimented with gambling, but this experimentation has not turned them into people who gamble regularly or routinely.”
An oft-repeated claim by our opponents is that a high percentage of our revenue, up to 50 percent, comes from pathological gamblers. The commission’s NORC research estimated that 5 percent to 15 percent of the industry’s gross revenues were from pathological gamblers. We all know that we don’t want customers who bet over their heads. Our industry has been working in every way the scientific experts tell us to promote responsible gaming, whether it’s by educating our customers through posters and brochures, training employees, or posting toll-free help line phone numbers on our casino floors.
Another irresponsible charge is that our companies in some way target pathological gamblers in our marketing and that somehow we are able to detect pathological gamblers through our customer database. Treatment experts tell us that it is impossible for us - or anyone else - to determine who is a pathological gambler based on a list of names and data. In fact, they’ll tell you that even in person it is a difficult disorder to diagnose. The experts have told us that our role should be one of educating our employees and customers and funding research - a role that we certainly have undertaken and will continue to do.
Despite overwhelming evidence to the contrary, industry foes continue outlandish false accusations about the issue of bankruptcy. A U.S. Treasury Department study released last year found “… no connection between state bankruptcy rates and either the extent of or introduction of casino gambling.” This was on the heels of federal commission research by NORC, which concluded, “… the casino effect is not statistically significant for any of the bankruptcy … measures. …” In the recent GAO report, I discussed earlier, the GAO states that the NGISC report notes that a “…1998 analysis of data on 100 communities between 1980 and 1997 showed no significant change in per capita bankruptcy rates in communities where casinos were introduced.”
Our opponents also are fond of claiming that gambling will contribute to an increase in crime - this despite the fact that the federal commission found no link between the two, stating in its research that “… the casino effect is not statistically significant for any of the … crime outcome measures. …” The federal commission’s final report also cited a study in which a comprehensive review of publicly available information on gaming and crime found no documentation of a causal relationship between the two.
One of the most commonly held myths perpetuated by our opponents is a purported link between gambling and suicide. As has been demonstrated through recent research by the NRC and Harvard Medical School, individuals who are pathological gamblers often suffer from other disorders (co-morbidity); a simplistic approach linking gambling with suicide cannot explain away a decision this complex. While opponents of gambling use anecdotal evidence to attempt to prove a link, recent studies contradict their assumptions. A 1997 report from the Centers for Disease Control (CDC) found that suicide rates are a regional phenomenon and do not mirror the availability of legalized gambling. The CDC study pointed out that suicide levels in the West are 70 percent higher than in the Northeast. A study written for the AGA by a team of researchers from the University of California-Irvine compared actual suicide rates and found that gaming communities have “no higher risk” of suicide than non-gaming communities.
In conclusion, let me say that these claims about our business are made in government hearings, such as the one I participated in last week, and other public forums nationwide. Inevitably, they end up being reported by the news media, without any basis in fact. It’s up to each and every one of us to make sure that any decisions about our business are based on facts, not anecdotes; science, not theories. We can only accomplish this by working together to educate each other, our customers and our communities.