By Frank J. Fahrenkopf, Jr.
A few weeks ago, I testified before the National Gambling Impact Study Commission to offer our industry’s recommendations for the commission’s final report. I asked the commissioners to look back to the guidance given to them by Congressman Frank Wolf—an opponent of gaming—as they began their deliberations. He told them to seek “reliable and factual and unbiased answers to their questions.” He also told them to be “open-minded, fair, and undaunted in the pursuit of knowledge based on solid research.” I couldn’t agree more.
At the heart of our recommendations was a request to rely on the facts. Not on stereotypes. Not on economic models. Not on theories. But on documented statistics and scientifically proven facts. In the past, this has not been an easy task. Until the early 1990s, there were only two places with casino gaming: Nevada—where it has been legal since 1931 and, therefore, few “before” statistics exist—and Atlantic City, N.J. With only this limited data available, any type of credible scientific analysis is impossible. But our business is now a national one, with casino gaming in areas from the Gulf Coast of Mississippi to the Black Hills of South Dakota. This recent growth has made it easier for us to quantify the economic and social impact of our business on the communities where we operate. It also has made it harder for our opponents’ unsubstantiated theories to hold any water.
The American Gaming Association has compiled many of those facts about our business into a new publication, A Report on America’s Casino Gaming Industry, which I submitted to the commission. The report is a compilation of information from every site visit—including testimony from employees, public officials, community leaders and industry representatives, as well as reports submitted for the record. Finally, we have a single resource of fact-based information on the casino gaming industry, whether it’s the number of jobs created in Nevada, the amount paid for redevelopment projects in Atlantic City, the amount of tax revenue generated in Mississippi or the economic impact on local businesses in Iowa.
When the final report comes out this spring, we hope it will take a page from this effort and from the following recommendations I made to the commission:
Look at the facts, and you will find that the casino gaming industry is an economic force that provides benefits to not only those working within the industry but also to many communities and their citizens. More than 700,000 jobs created directly and indirectly. More than $7 billion paid in wages. More than $3 billion paid in federal, state and gaming taxes. Not only is gaming a significant contributor in terms of tax revenue, jobs and wages, and the related social benefits, but it also creates indirect growth through increased retail sales, residential and commercial construction, and other capital investment.
Look at the facts, and you will find that much of the rhetoric about so-called “social costs” is inaccurate. One of the most common arguments made by opponents is that ‘social costs’ of gaming exceed any economic benefits. What they don’t take into account is the fact that the tremendous economic benefits of gaming—jobs, tax revenue and commercial development, among others—bring considerable social benefits, which too often are lost in discussions that revolve around these so-called ‘social costs’ of gaming.” A track record of hiring significant numbers of employees off welfare and other government assistance. Providing access to benefits, including health care and skills training. Employing a high percentage of minority, female and disabled workers. And so I told the commission to be sure to look at social benefits as well as costs when determining the overall “social impact.”
Look at the facts, and you will find an industry that is one of the most highly regulated in the United States. More than 1,000 regulators work in Nevada and New Jersey alone at a cost to the industry of approximately $70 million. And since most major casinos are publicly traded, they have additional layers of oversight from the Securities and Exchange Commission, stockholders and institutional investors. I reiterated our support for strong state regulation and asked the commission to use its authority to put to rest, once and for all, the myth that organized crime owns, operates or influences casinos.
Look at the facts, and you will find that our segment of the industry has devoted significant resources to address disordered gambling. We know that disordered gambling is a concern to the commission and is expected to be a focus of the final report. And so I took this opportunity not only to outline our recommendations in this area, but also to highlight our actions. I unveiled our latest initiative, the PROGRESS (Promoting Responsible Gaming Resources and Education Standards) program, a new component of the AGA’s ongoing Responsible Gaming National Education Campaign. A big part of those plans include a multimedia PROGRESS kit, which will be available this spring (see box).
In this area, I made numerous substantive recommendations, including a call for an across-the-board increase in the legal gambling age to 21. I announced plans to adopt an advertising program for the casino gaming industry that will include voluntary standards. And I called for all gaming companies—including casinos, lotteries, pari-mutuels and charitable gaming operations—to participate in and contribute to public and employee awareness programs, research and training. I urged commissioners to support funding for sound scientific research to prevent and treat the problem. And finally, I indicated the industry’s support for state funding of disordered gambling programs from existing state tax revenues, based on actual need.
As long as the commission follows the guidance of its chairman, Kay Coles James—”to do what the American people, through their elected representatives in Congress, have asked us to do, and that is to conduct a comprehensive, factual, and legal study of the social and economic impact of legalized gambling”—I am confident the final report will put to rest, once and for all, the many misconceptions about our industry.
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Commission-Funded Study Reveals Lower Prevalence Rate
Preliminary results of a national survey commissioned by the National Gambling Impact Study Commission found that less than 1 percent of the population are pathological gamblers, a figure far lower than previous research—including one funded by the industry—has indicated. The survey, conducted by the National Opinion Research Center (NORC) at the University of Chicago, revealed that only 0.6 percent of the U.S. adult population suffers from serious gambling disorders. This figure is less than half of the 1.29 percent past year adult prevalence rate reported in the landmark 1997 study by Harvard Medical School’s Division on Addictions. Importantly, the survey also found that increased access to legalized casino gaming did not affect prevalence rates. Data for the NORC survey were gathered through phone interviews with 2,400 adults and 500 youths ages 16 and 17. In addition, NORC reported on the preliminary results of its community database research, in which it compiled and examined information from 100 randomly selected communities as well as 10 communities within 50 miles of a casino. NORC’s analysis of the community database found that casino proximity did not contribute to increased bankruptcy, crime or infant mortality. Also, those communities close to casinos experienced a 12 percent to 17 percent drop in welfare payments, unemployment rates and unemployment insurance. The NORC report was released at the commission’s Feb. 8-10 meeting in Virginia Beach, Va. For a copy of the report, visit the NORC Web site at www.norc.uchicago.edu/new/gambling.htm.
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We’re Making PROGRESS!
On May 1, The American Gaming Association (AGA) will be unveiling a kit to provide companies in the gaming industry with all the tools necessary to initiate a comprehensive responsible gaming program within their facilities. The PROGRESS (Promoting Responsible Gaming Resources and Education Standards) kit will be comprised of three volumes: Volume One will provide issue overviews; voluntary guidelines; and sample brochures, posters and other materials, along with electronic files of them for companies to customize and print. Volumes Two and Three will consist of curricula to address problem and underage gambling. The kit will be available free to all members and sold to nonmembers for a nominal cost.