While government-sanctioned gambling is often trumpeted as a new source of revenue, a 2013 study shows shows the staggering cost of problem gambling. This national Australian report reveals that the social and economic cost of problem gambling could total up to $2.8 billion per year.
Form of Government-Sanctioned Gambling
Slot Machine Profits Jump 70% In a Decade
According to Nevada Gaming Control Board statistics, there were about 197,000 slot machines in that state that won roughly $4.8 billion from gamblers in 1997. By 2007, the number of slot machines increased just 2.5 percent to 202,000, but the amount they won from gamblers jumped 72.9 percent to about $8.3 billion. This is primarily because slot design became far more advanced in fleecing and exploiting users.
Casinos Make Their Money From Slot Machines
Why do predatory gambling operators push slot machines over other forms of gambling? According to Casino Operations Management, a textbook written by Jim Kilby, Jim Fox and Anthony Lucas, a typical large casino receives 60-70% of their profits from slots and 15-20% from table games.
Casinos Wipe Out Local Music Theaters
Bringing casinos into a region severely hurts other cultural arts organizations. Unlike casinos, which thrive on gamblers, local arts and music theaters must make money on ticket sales. They sell tickets when they host popular shows. But popular musicians and comedians often end up playing at casinos, because casinos can pay them more. Casinos also set radius restrictions that ban performers from going to other nearby venues.
“It’s the fact that we can’t get the performer — that’s the problem,” said James D. O’Brien Jr., chairman of the Hanover Theater in Worcester, Massachusetts.
The Bushnell Center for the Performing Arts in Hartford, Connecticut — a 50-mile drive from Foxwoods and Mohegan Sun — provides a glimpse of what happens to theaters. The Bushnell used to attract dozens of pop and rock shows every year. Now, the theater is lucky to get six.
“When the casinos came, that really put the nail in our coffin,” said David Fay, the theater’s president and chief executive officer. “They absolutely take all of the major pop attractions. Luckily, we have not been challenged with Broadway products.”
The economic recession hit the Bushnell hard, eroding the theater’s endowment and leading to a loss of corporate donors. Those factors, combined with competition from casinos, have left the theater with a deficit of more than $1 million.
With casinos, theaters fear competition for big acts
Lotteries Generate More Revenue Than Corporate Income Taxes in Some States
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In this Reuters piece, David Cay Johnston examines the shift in 11 states that shows, lotteries, the most heavily taxed consumer product in America, generate more revenue than state corporate income taxes. For example, the Rhode Island Lottery netted the state more than $3 for each dollar of state corporate income tax in fiscal 2009. Johnston also spotlights how the increasing trend toward easy reliance on lotteries has not translated to increased revenue for states.
The Effects of Video Poker in South Carolina
In 1997, Dr. Quinn founded the South Carolina Center for Gambling Studies and directed a statewide study of Video Poker’s impact on South Carolina. This study outlined the pattern of devastation Video Poker was having on average citizens and demonstrated the uniquely addictive nature of electronic gambling. Dr. Quinn’s study and a follow-up study with Dr. William Thompson of UNLV focusing on the economic impact of Video Poker in South Carolina, contributed greatly to demise of Video Poker in South Carolina.
Here are some key findings from the research:
1. The combination of electronic gambling and convenience venues is extremely addictive and destructive.
2. Minorities and women in particular appear disproportionately vulnerable to video poker.
3. People often gamble more often and/or longer when they are induced.
4. Sometimes people gamble and develop pathology because they have the opportunity.
5. The pathology associated with video poker, unlike other forms of gambling, may prove to be largely non-transferable.
6. The long term economic and social costs associated with gambling are often ignored by political processes obsessed with short term and visible financial gain.
Gambling Limits Do Not Last
When riverboat gambling came to Iowa in 1991, limits were placed on the amount of money people could lose and gambling could only take place when boats were cruising along the river. By 1994, these betting ceilings had been removed, cruising requirements were relaxed, and land-based slot machine locations were legalized. Why is this important? Because it highlights that the predatory gambling industry constantly pushes past initial limits to expand its reach into citizens’ wallets.
Horse Racing Remains a Dying Pastime
There has been many reports in recent years regarding the decline in the horse racing industry. In August 2011, the Associated Press released another story stating that there was “a generally unfavorable public view of racing, a long and frustrating learning curve for new bettors and increased competition from casinos and other forms of gambling as central to the sport’s decline.”
The Ugly World of Casino Debt Collection
Casinos often give out loans (or “markers” as they are known) to players in need of cash. To keep them coming back, casinos generally charge an interest rate of 0% and give players several months to repay loans that can run into the hundreds of thousands of dollars. But when players can’t pay the loans back, casinos send a demand letter and can refer the case to the local District Attorney’s office bad check unit which prosecutes such crimes. Sometimes casinos file a civil suit as well. In addition, casinos (like other debt collection agencies) do not have to abide by regulations of the Fair Debt Collection Practices Act.
Dopamine: Not About Pleasure But Its Anticipation
In this web video, Stanford Neurology Professor Robert Sapolsky discusses how dopamine affects human behavior: the anticipation of a particular reward is more important than actually getting the reward. He singles out Las Vegas as a place where human beings are manipulated to believe they can win money, even though they have a slim chance of doing so. It is a great explanation about dopamine and how, why, and when our levels rise. Casinos and lotteries design their experience to blatantly exploit these traits.