Gambling in America

Author: Stacy Mattingly

Gambling in America

by Stacy Mattingly

------------------------------------------------------------------ Over the last fifteen years, the gambling industry's image has gone from sleazy to slick. Once a pastime that had us conjuring up visions of cigar-toting, gold-chain - wearing, pot-bellied mobsters, gambling is now something we can associate with trim, tanned, Wall Street family men. Even GOP presidential nominee Bob Dole seems convinced that today's legal gambling operations are squeaky clean - so much so, in fact, that, according to the Wall Street Journal, he accepted $477,450 in campaign contributions from gambling interests in Las Vegas last summer. ------------------------------------------------------------------

If nothing else, gambling companies certainly look like other companies: they are publicly traded (Harvard University and U.S. Steel are among the institutions that hold 80 percent of available gambling shares); they are avowedly divested of all connections to organized crime; and they hire high-profile politicians and attorneys general to be lobbyists. As evidence that the gambling industry has become legitimate in the public eye, proponents point to Fortune magazine, which put Mirage Resorts Inc. on its 1996 list of the ten most admired companies in America.

This is fitting because Steve Wynn, Mirage's chairman, is the man who instigated the gambling industry's makeover. During the eighties, Frank Sinatra and Dolly Parton went on TV with Wynn - an athletics buff who himself is reported to have had a face-lift and liposuction - to let the American people know that gambling is really just entertainment. It's not gambling, aver the cadres of Armani-bedecked casino executives - it's "gaming," and it's as American as baseball, apple pie, and Mama.

One thing's for certain: Americans seem to clamor for seats at the blackjack table a lot more readily than they do for seats in the ballpark. Now more people gamble at casinos, or "family entertainment centers," than attend professional baseball games each year. With a foothold in twenty-three states, casinos grossed more revenue in 1995 than all sporting events, movies, plays, and concerts combined; $1.4 billion in taxes went to state and local governments.

Gambling interests chalk this up to their "product" - a host of garish architectural feats equipped with every feature and amenity imaginable. (Mirage Resort's Treasure Island, for instance, resembles an eighteenth-century pirate village and hosts a skirmish between a full-scale British man-of-war and a pirate ship every ninety minutes.) Whether or not gambling is part of our cultural heritage, the country certainly seems to have bought it. And for all of their flights of fancy, "family entertainment centers" could be on their way to becoming banal in America.

The opposition, of course, has a few things to say about this. According to Tom Grey, the executive director of the National Coalition Against Legalized Gambling, the country should not expect to see a casino on every street corner any time soon - thanks primarily to the dedication of his troops. A former Vietnam infantryman and a Methodist minister, Grey claims that his mostly volunteer forces (he calls them "Gideon's army") have won a decisive political victory over the lavishly funded gambling industry. Since 1994 opponents have won twenty-two of twenty-four statewide referendums and legislative contests in the battle to legalize gambling; last year, despite extravagant marketing campaigns launched by casino interests (they spent $16.5 million in Florida), every state that voted on the issue voted "no." In April, Louisiana Governor Mike Foster, an outspoken opponent of gambling in a state where video poker "truck stops" are a dime-a- dozen, pushed a bill through the legislature that allows communities to vote existing gambling out of local areas. This will be the first time a legislature has given citizens the opportunity to reverse legalized gambling since around the turn of the century.

The clincher in what Grey calls "the fight for the heart and soul of America" is a bill passed by the House in March that establishes a commission to investigate the social and economic impact of gambling so that states, when faced with the issue, will be able to make informed decisions. The Senate has yet to vote on the bill, but if what happened in the House is any indication (only six representatives spoke out against the bill), it should pass easily. The antigambling forces are confident that once an objective study is compiled, the ugly truth about the gambling industry, which lobbied hard to kill the bill, will become common knowledge.

Here's the truth, say opponents: the gambling industry may have a new face and a new name, but it doesn't have a new game. For gambling interests, the game has always been about people losing their money, and, as new research conducted by economists at the University of Illinois indicates, these interests bank on some people losing a lot more than a 20-spot here and there between amusement park rides. While it is true that the vast majority of casino "customers" are casual gamblers (they do it for fun and in moderation), a recent study called "Development or Dreamfield Delusions?" shows that problem gamblers (people who are mentally and emotionally troubled) provide an outrageously disproportionate amount of casino revenues.

According to the numbers, between 30 and 50 percent of the money collected by casinos every year comes from about 4 percent of the population. In other words, explains the study's coauthor, Earl Grinols, what keeps the gambling industry going - indeed, what keeps it growing - are the husbands who lay the deeds to their homes on the craps tables and the widows who play their insurance money away in the slot machines. This, opponents argue, makes the gambling industry a wolf among sheep. It may market itself as just another form of entertainment, but the fact remains, says Grinols, that "if problem and pathological gamblers were out of the picture, it would be a major shock to casino operations." Such a state of affairs, he concludes, "casts doubt" on whether the gambling industry can be trusted to earnestly seek or provide help for its troubled patrons.

Furthermore, the argument goes, it follows that state and local governments counting on tax money from this ill-gotten revenue are necessarily at odds with the very people whose well-being they are supposed to protect. Which, Grey is quick to point out, amounts to atrocious public policy. And if this weren't bad enough, argues Robert Goodman, author of The Luck Business, in most cases problem gamblers are actually costing communities more money in other economic sectors than they are contributing to communities on the casino end. These gamblers spend money in casinos that should be going to pay bills or buy groceries for their families; they write bad checks; they may steal or embezzle money to pay off gambling debts or to fuel their habit. Plus, it costs money to prosecute and correct those gamblers who do break the law. All of these actions, Goodman explains, add up to financial loss for somebody else.

Conservative estimates, according to Goodman's research, have problem gamblers costing their communities around $13,000 each per year. Put these figures up against the fact that the number of problem gamblers reportedly increases when casinos set up shop and you have an economic cataclysm on your hands. (In Iowa, according to a state-funded study, the percentage of problem gamblers rose from 1.7 percent of the population before casinos arrived to 5.4 percent four years later.) Considered another way, Grinols points out, for every dollar of tax revenue a community gains from casinos, it loses between one and three dollars elsewhere. "At this rate," he ventures, "it is possible that you could tax 100 percent of casino revenues and still not pay off the costs."

Then there is the slew of social costs to consider. Communities all over the nation cite soaring crime rates as the result of land-based or riverboat casino operations; the number of gambling- related suicides is on the rise; Gamblers Anonymous chapters are proliferating rapidly; and divorce lawyers across the country claim that families are breaking up because of gambling addiction. Not to mention the long-term philosophical ramifications at stake - opponents worry about the "something-for-nothing" mentality that gambling interests (and now governments) necessarily cultivate. "All in all," says Grey, "if I had five minutes on national television, I'd put it like this: the gambling industry may glitter, but it isn't gold. The final word is, ‘You're getting scammed.'"

The political impact of Grey's mainly grassroots efforts hasn't been lost on the gambling industry. Still, it was a full three years after Grey and his group put the wheels of their campaign in motion before the industry decided to set up a lobbying office in Washington, D.C. The American Gaming Association was formed in 1995; Frank Fahrenkopf, the former chairman of the Republican Party, took charge as president and CEO. Fahrenkopf defines the AGA's mission in terms of his opponents: "For the last two or three years, the critics have put out information and research on gambling only to meet with no industry response - well, we're here now."

For one, says Fahrenkopf, a former gaming attorney from Nevada, the social ills that gambling opponents connect to casinos are not necessarily caused by casinos - he claims there is no proof of a causal relationship. Furthermore, he argues, the economic conclusions touted by Grinols and the others amount to smoke and mirrors. "The opposition is a bunch of moralists; they oppose gaming for moral reasons. When they saw that they couldn't get anywhere with moralizing in America - because Americans don't like to have people telling them what to believe - they came up with a statistical house of cards." As evidence, Fahrenkopf points to a paper written by economist Christian Marfels of Dalhousie University in Nova Scotia. Marfels, who has never accepted money from gambling interests for his critiques but who looks to do some broader projects for the industry, alleges that Grinols and his partner at the University of Illinois did some funny things with numbers to come up with their conclusions about casino gambling.

As Marfels has it, Grinols, in his zeal to demonstrate what a casino-ridden America might look like, combined statistical apples and oranges. "To do a cost-benefit analysis," Marfels explains, "you can't combine rates determined for certain regions and project them onto other regions, or take expenditure rates figured for 1980 and inflate them so they translate for 1990. It's preposterous. You have to use real numbers." That being said, he contends, Grinols's finding that problem gamblers contribute nearly half of all casino revenues is "bizarre and not substantiated by fact." Which means there is no evidence to prove that the gambling industry has a stake in wanting addiction to persist among its customers. In short, says Marfels, "I would not accept this study as a termpaper from a student."

Grinols, who had never heard of Marfels until the critique came out and who has never received money from gambling opponents for his work, refutes the German economist's efforts to debunk his study. He insists that he did not do anything unorthodox with the numbers - "combining and recalibrating numbers is what economists do" - and argues that the figures available to him were plenty adequate for his purposes: "Everyone agrees that we would like to have more and better research. But to say that we don't have sufficient research now to tell us the nature of the problem we're facing is simply not being sensible." As to his conclusion that problem gamblers provide casinos with up to half of their revenues, Grinols, who has conducted research in this area for five years, says he stands by his results. ("I would be delighted for the industry to come forward with its numbers.") Based on his findings, he argues, it is only "common sense" to question the extent to which casinos can be trusted to treat problem gamblers: "The industry would be agreeing to do what is not in its own interests - that is, to reduce its revenues by one half if treatment efforts were successful."

Marfels, who may in the future attempt his own cost-benefit analysis, calls Grinols's skepticism "a harsh accusation, considering that casinos already bend over backwards to give money to treatment efforts." In fact, the AGA opened a National Center for Responsible Gaming in February in order to research gambling addiction and develop prevention, intervention, and treatment strategies. Across the nation, casinos are putting money into similar efforts locally. Frank Campbell, the director of a Baton Rouge crisis center that serves as "one of the hubs on the wheel of Gamblers Anonymous" in Louisiana, points out that in the midst of the political hem and haw - "where everyone focuses on this or that gambling issue rather than on the people who are drowning" - it is the casinos that are advertising the crisis center's hot line number.

Opponents argue that while the gambling industry is doing some good things, its efforts are a drop in the bucket when compared to what gambling operations are costing society in dollars and in human tragedy. But to Marfels - as to Fahrenkopf - Grinols's "accusation" is evidence of what he and his allies are really up to: "They think gambling is a sin."

Catholic reactions to all of this have been mixed. Fahrenkopf, himself a Catholic and a member of the Knights of Malta, is quick to point out that some dioceses are probably faring quite well financially due to the generosity of casinos. But this, he argues, should not alarm anyone. As Fahrenkopf sees it, gambling and Catholicism are not at odds: "Look at history. Catholics have always been into bingo parlors."

Catholic leadership makes a distinction between bingo, which is used to raise money for charitable purposes, and casinos, which incur social problems - whatever the extent of those problems may be. Still, the Church's position on gambling is one of caution rather than condemnation. According to the Catechism, "Games of chance (card games, etc.) or wagers are not in themselves contrary to justice. They become morally unacceptable when they deprive someone of what is necessary to provide for his needs and those of others."

With the rampant spread of state-sponsored gambling - not just in this country, but worldwide - many, including the Holy Father's in-house theologian, believe that the Vatican should give the phenomenon a closer look. In April, the Catholic News Service reported "a growing sense of uneasiness" among Vatican insiders about the proliferation of legalized gambling - particularly as a "substitute for local taxation." Church officials have not committed to a comprehensive examination of the issue but are currently keeping track of statements made against gambling by bishops in the United States, Canada, and Australia.

In accordance with the Catechism's emphasis on moderation, Catholic leadership in the US has voiced concern about the spread of casino gambling in terms of the harm it brings to those who become addicted. And the degree to which priests and bishops tolerate the industry varies.

The gulf-coast diocese of Biloxi, Mississippi - one of the largest gambling markets in a state that ranks second only to Nevada in casino square footage - is, according to a spokesperson, "living in harmony" with area gambling interests. John E. Connelly, the chairman of President Riverboat Casinos, Inc., and a Catholic, bequested $1 million to the Biloxi diocese last year. Casinos have provided grants and shuttle buses to diocesan schools; they give financial support to the diocese's youth ministry; and they paid the note on a Catholic high school's football bus and had it air- conditioned.

Father Al Camp of St. Mary's parish in the historic river town of Natchez, Mississippi, on the other hand, says that the "one little riverboat" there is doing nothing for the local Catholic community. Officials with Lady Luck Gaming Corporation have stated that the company would gladly donate money to Catholic causes if approached. But Father Camp insists he wouldn't have anything to do with it. "If I had to make a statement," he ventures, "I'd say the casino is a cruel hoax. You can't get something for nothing, but you can be sure there will be nothing to stop you from losing everything. It's the philosophical and theological equivalent of putting a bandit on the river."

Whatever the situation may be concerning casinos and charitable giving, says Bishop William Houck of the Jackson diocese, the two bishops in Mississippi have advised the clergy to be "constantly alert and to challenge the people with a balanced and responsible outlook on gambling." Meanwhile, the bishops in the heavily Catholic state of Louisiana have taken a more public stance. In 1986, when casinos were first being considered by lawmakers, the bishops of Louisiana made a collective statement against legalization, asserting their belief that casinos would "undermine . . . the spirit of industriousness of our people" and have "a particularly detrimental effect on family life." In 1992, after lawmakers had ensured casinos a place in the economy, the bishops reissued their statement.

Still, many Catholics in Louisiana are employed by casinos, and many Cathoics patronize them. Laura Deavers, the editor of he Catholic Commentator in Baton Rouge, says her parish sends their seniors to casinos in the church bus. This is not as often the case with Protestant congregations, who believe gambling to be contrary to the spirit of Scripture - and, therefore, a sin. Of course, there are gambling proponents who speculate that the very Protestants touting the Bible as the final word on casinos are shooting dice on the local riverboats like everybody else. The implication here is obvious - opponents of gambling are not only moralists, they're hypocrites.

Personal morality, it turns out, is exactly what Grey is trying to steer his troops away from. Historically, Protestants - and many antigambling activists are associated with Protestant organizations - have tended to see things in private moral terms, he explains. "What I'm trying to do is get people to look at this debate in terms of the common good, which makes it a fight with Catholic overtones more than anything else. In fact, we could really use some more Catholics among the ranks."

Grey needs more than just Catholics to join his forces - he needs more forces, period. Antigambling activists won the first round of the fight with Gideon's army, "but for the next round," says Grey, "we're going to need a serious army." Just what the next round may look like is hard to say. If the Senate approves the gambling commission, there's no telling what sort of information might turn up or where that information might lead. Grey hopes that it will lead to more stringent regulation and, ultimately, to containment of the casino industry. Fahrenkopf himself says that he does not expect to see a lot of expansion in the next couple of years.

Whatever the future may hold, says Grey, some things are certain: "The nation is up for grabs and the emperor has no clothes." If the spread of legalized gambling, as opponents believe, is just one among many issues that expose the nation's much-talked-about social decrepitude, then, explains Grey, "I shouldn't have to be lighting fires under Christians - of all people - to get them out there into the fray. This is about much more than ‘religious extremism.' As Americans we're responsible for getting our country on track, if not for ourselves, then for our children and grandchildren."

Stacey Mattiingly is a writer living in Atlanta, Georgia

U.S. Casinos by State

•Arizona: Sixteen Indian casinos. •California: Seventeen Indian casinos. •Colorado: Dozens of small commercial casinos in three resort towns and two Indian casinos. •Connecticut: One Indian casino. •Illinois: Ten riverboat casinos, with almost all Las Vegas games. •Indiana: One riverboat casino launched and eleven more authorized. •Iowa: Six riverboats and three Indian casinos. •Louisiana: Seven riverboat casinos and three Indian casinos. •Michigan: Eight Indian casinos. •Minnesota: Sixteen Indian casinos. •Mississippi: Ten riverboat casinos and one Indian casino. •Missouri: Five riverboat casinos. •Montana: Four Indian casinos. •Nevada: Hundreds of commercial casinos and one Indian casino. •New Jersey:Twelve commercial casinos. •New Mexico: Eight Indian casinos. •New York: Two Indian casinos. •North Carolina: One Indian casino. •North Dakota: Six Indian casinos. •Oregon: Three Indian casinos. •South Dakota: Dozens of casinos in Deadwood and seven Indian casinos. •Washington: Six Indian casinos. •Wisconsin: Sixteen Indian casinos. •*Florida: Not usually listed as a casino state, Florida has four Indian establishments with high-stakes bingo, video pull-tabs and low-limit poker.

This information (current as of 01/15/96) was provided by the National Coalition Against Legalized Gambling. For further information, they may be reached at 800-664-2680.

© 1995-1996 Crisis Magazine

This article was taken from the June 1996 issue of "Crisis" magazine. To subscribe please write: Box 1006, Notre Dame, IN 46556 or call 1-800-852-9962. Subscriptions are $25.00 per year. Editorial correspondence should be sent to 1511 K Street, N.W., Ste. 525, Washington, D.C., 20005, 202-347-7411; E-mail: