poor or undeveloped methodology, or CHAPTER 7. GAMBLING’S researchers’ biases. IMPACTS ON PEOPLE AND It is evident to this Commission that there are PLACES significant benefits and significant costs to the places, namely, those communities which embrace gambling and that many of the impacts, “Gambling is inevitable. No matter what both positive and negative, of gambling spill is said or done by advocates or over into the surrounding communities, which opponents in all its various forms, it is an often have no say in the matter. In addition, activity that is practiced, or tacitly those with compulsive gambling problems take endorsed, by a substantial majority of significant costs with them to communities 1 Americans.” throughout the nation. In an ideal environment, citizens and policy-makers consider all of the Even the members of the previous federal study relevant data and information as part of their would be astounded at the exponential growth of decisionmaking process. Unfortunately, the lack gambling, in its availability, forms and dollars of quality research and the controversy wagered, in the 23 years since they chose the surrounding this industry rarely enable citizens words above to begin their work. Today, the and policymakers to truly determine the net various components of legalized gambling have impact of gambling in their communities, or, in an impact¾in many cases, a significant one¾on some cases, their backyards. numerous communities and almost every citizen in this nation. The principal task of this Many communities, often those suffering Commission was to examine the “social and economic hardship and social problems, consider economic impacts of gambling on individuals, gambling as a panacea to those ills. Indeed, a families, businesses, social institutions, and the number of communities plagued by high economy generally.”2 unemployment have found a form of economic renewal through gambling, particularly through The numbers involved are staggering: “More the development of “destination resorts.”6 In than $50 billion spent on legal commercial addition, state, local, and tribal governments games in 1997”3 employing more than 600,000 have received substantial revenues from taxes on individuals.4 In 1976 only a few states allowed gambling enterprises and lottery receipts. gambling; today, 47 states and the District of However, there are costs associated with these Columbia permit some form of gambling.5 What decisions and gambling cannot be considered a is even more astonishing is how little is known panacea for all economic problems in a and has been studied regarding the social and community. economic impacts of this diverse industry upon our nation. Despite the growing magnitude of the To the economist John Kenneth Galbraith, industry and the widespread involvement of a “People are the common denominator of significant portion of the population, there is a progress.” Economic progress can only be paucity of research in this field. Much of what measured by its impact on individuals. does exist is flawed because of insufficient data, Gambling’s impact on people represents an even more complicated and understudied area. 1 Certainly, segments of the industry, especially Final Report, Commission on the Review of the National Policy the resort, hotel, and commercial casinos, Toward Gambling, p. 1 (Washington: 1976). 2 provide jobs with good pay and benefits. The Sec. 4 (a) (P.L. 104-169). short and long-term social benefits of work, 3 E.M. Christiansen, “An Overview of Gambling in the United States,” testimony before the National Gambling Impact Study 6 Commission, p. 2, Virginia Beach, VA (February 8, 1999). For the purposes of this document, “destination resorts” can be 4 Ibid., p.7. defined as “those tribal or commercial casinos that offer 5 restaurants, retail, recreation, entertainment, and/or hotels in The exceptions are Utah, Hawaii, and Tennessee. addition to a number and variety of gaming opportunities.” Gambling’s Impacts on People and Places Page 7-1 National Gambling Impact Study Commission Report health care, training and education are answer for all those and challenge anyone who undeniable. Some have argued that quality suggests otherwise. What the Commission does entertainment, in and of itself, is a social benefit offer in this chapter is a process and factors to to communities and individuals.7 consider in assessing the benefits and costs of gambling and its implications for businesses and Many witnesses before the Commission argued people. forcefully that gambling has been a good deal for hard pressed families and communities. In fact, if that were the whole story, our task would have DETERMINING THE IMPACT OF been easy. What has made it complex is the fact GAMBLING that along with the real benefits of gambling, come equally undeniable and significant costs. As the Commission noted earlier, and as the Commission will explicate in other chapters, the This Commission heard testimony about the gambling landscape is neither well-studied nor growing numbers of individuals suffering from well-understood. Studies have often been problem and pathological gambling, which often generally parochial, limited, and fragmentary. To results in bankruptcy, crime, suicide, divorce, or determine the impact of the various forms of abuse. While recent studies have attempted to gambling, the Commission has held hearings “quantify” these costs to society, the throughout the country, heard testimony on a Commission knows that no dollar amount can number of relevant topics, reviewed thousands of represent what a lost or impaired parent, spouse articles and comments, and considered academic or child means to the rest of the family. research. In addition, the Commission initiated Furthermore, many of these costs are hidden and new research through a number of projects, it is difficult to quantify the emotional damage including studies by the National Opinion and its long-term impact on families and their Research Center (NORC) and an analysis of children. As NORC indicated in its report, “In a professional literature by the National Research number of respects the tangible impacts from Council (NRC). problem gambling can be thought of as analogous to the economic impacts of alcohol The NRC project involved a review of all abuse. In both situations, inappropriate and/or existing and relevant studies by representatives excess participation in a legal and widely of a variety of scientific fields. In the end, NRC pursued leisure activity can exact an undesirable recommended that further study be initiated. Study of the benefits and costs of gambling “is toll in individuals, family, friends, and the 8 surrounding community.” In reality, it is these still in its infancy.” Lamenting past studies that hidden costs¾the emotional costs of addictive utilized “methods so inadequate as to invalidate behavior¾that concern us far more than the their conclusions,” the absence of “systematic annual economic expense of problem and data,” the substitution of “assumptions for the pathological gamblers. missing data,” the lack of testing of assumptions, “haphazard” applications of estimations in one We recognize that some policymakers and citizens study by another, the lack of clear identification have struggled and continue to struggle with these of the costs and benefits to be studied, and many sometimes conflicting impacts. Attempting to other problems, NRC concluded the situation determine the appropriate course of action for their demands a “need for more objective and communities while considering the introduction, extensive analysis of the economic impact that expansion, or restriction of gambling, is a difficult gambling has on the economy.” task. The Commission should begin by acknowledging that, at this time and based upon In addition to these activities, the Commission available information, we do not have a definitive invited input from a number of sources affected by 7 8 David Ramsey Steele, “Gambling is Productive and Rational,” National Research Council, “Pathological Gambling: A Critical Legalized Gambling, For and Against, Evans and Hance, ed. Review,” (April 1, 1999) at 5-18. Gambling’s Impacts on People and Places Page 7-2 National Gambling Impact Study Commission Report gambling, particularly governors and other tribal, this may be true to economists, we know that state, and local officials in jurisdictions in which bankruptcy is indeed a “cost” to the individuals some form of gambling is legalized, as well as and families involved, just as a good job is a organizations representing those affected by tremendous benefit to that family. gambling. Regrettably, some segments of the gambling industry were not as forthcoming in Just as only net economic and social benefits responding to information requests as were others. should be included on the positive side of In particular, many of the Indian tribes involved in legalized gambling’s ledger, only net social and Class III gambling, as well as the National Indian economic costs should be tallied on the negative Gaming Commission, refused to provide side. Determining net costs associated with pathological gambling, for example, requires an information to this Commission.9 This is in stark contrast to the assistance provided by many understanding of what researchers call “co- morbidity,” described as “the co-occurrence of commercial gambling companies, the pari-mutuel 10 industry, and state and local officials. The two or more disorders in a single individual.” Commission,