Effects of Gambling on the Economy, Research Paper Example

The Effects of Gambling on the Economy and the American Culture

“The gambling industry teaches people to throw money away just for the fun of it. Just visit many of the casinos and witness it for yourself. One of the only new businesses that a new casino in Las Vegas brought was a strip club-imagine that! A West Virginia casino has an unemployment rate of nearly 50% which is higher than the state average.” (“Gambling Ruins Lives”). Look at the Detroit, Michigan casino where layoffs continued even after casinos came to town. There are increased crime rates, court costs, lost revenue, infrastructure costs, and many other downfalls to bringing a casino to town.

“Keith Andrews Vice-President of Corporate Affairs for Casino Windsor said, “The gaming market is dramatically different now from when the temporary casino opened ten years ago. Then there was incredible demand for gaming and growth was booming. Now the reality is that the regional gaming market is not growing. We are in a market share fight. We have to do whatever we can to capture our fair share.” (“Gambling Ruins Lives”). Gambling will only burst like a balloon after so much air is placed in it. Professor Rose, a gaming academic, predicted gaming would end in forty years due to saturation, corruption and a loss of societal issues. When he made that prediction tribal gaming barely existed in America. Las Vegas is most probably the best example of saturation of gambling in America. For years the economy has depended primarily on gaming rather than importation and exportation of goods and services. To now three out of four tax dollars are collected from the sales of gaming taxes; taxes which are vulnerable to the swing of the economy. It was once believed that the revenues from gaming and tourism could keep up with the pace of our growing and diverse population but unfortunately this strategy has failed immensely.

Eighteen to twenty-year olds are twice as likely to have problems with gambling as any other age group amongst Americans. There appears to be more children having adverse problems from gambling than any other problem. “In 2009 it appeared that over 109,000 Ohio people became addicted to casino gambling.” (“Gambling Ruins Lives”). These people were unable to resist the urge to gamble. Further they lost their homes and possessions. Their families were destroyed as a result of their gambling addictions. Their businesses and futures were destroyed, also. Gambling addictions are rising across America at a high alarming rate. The National Council on Problem Gambling acknowledged the old percentage of 1% is no longer valid with respect to problem gambling. The population at risk is closer to 5%. Gambling is considered one of the deadliest addictions today. “Gambling further leads to health problems, unemployment, divorce, bankruptcy and jail time.” (“Gambling Ruins Lives”).

“Note: Internet gambling revenue totaled about $651 million worldwide in1998, which is not, included in the total U.S. gambling revenues of $54.3 billion in 1998. Revenues from casinos include those from Nevada and New Jersey slot machines and table games, other land-based casinos, riverboats, deepwater cruise ships, cruises-to-nowhere, other commercial gambling, and non-casino devices. Revenues from lotteries include those from video and other lottery games. Revenues from tribal include those from tribal casinos. Revenues from pari-mutuels include those from horse and greyhound racing.” (“Impact of Gambling”). “NGISC reported that the casino industry paid $2.9 billion in federal, state, and local taxes in 1995. Atlantic City casinos paid about $319 million in gambling taxes to New Jersey and over $86 million in property taxes to Atlantic City in 1998, representing about 80 percent of total property taxes for the city’s budget. In 1998, the casinos also paid $41.7 million in school taxes and $25 million in county property taxes. In addition, from 1985 through June 1999, about $900 million of casino community reinvestment funds had been earmarked for community investment in Atlantic City, including housing, road improvements, and casino hotel room expansion projects. NGISC did not specifically address community investment received from gambling businesses.”(“Impact of Gambling”).  “

It was difficult to identify the social effects of gambling for a number of reasons.  The amount of high quality and relevant research on social effects is extremely limited. Data on crime and suicide are normally linked and tracked to gambling.  Sometimes data were available only at the county level, not for Atlantic City. “Further, while studies have shown increases in social costs of pathological gamblers, it is difficult to isolate whether gambling is the only factor causing these problems because pathological gamblers often have other behavior disorders. While NGISC and our case study in Atlantic City found some testimonial evidence that gambling, particularly pathological gambling, has resulted in increased family problems (such as domestic violence, child abuse, and divorce), crime, and suicides, NGISC reached no conclusions on whether gambling .increased family problems, crime, or suicide for the general population.” (“Impact of Gambling”).  Similarly, no conclusive evidence was supportive of whether gambling increased social problems in the Atlantic City area.

“NGISC reported on three studies completed in 1997 and 1998 that estimated the percentage of U.S. adults classified as pathological gamblers ranged from 1.2 to 1.6 percent. A NGISC contractor, who conducted one of the three studies, estimated that about 2.5 million adults are pathological gamblers and another 3 million adults should be considered problem gamblers (individuals who have gambling problems but do not meet the psychiatric criteria for pathological gambling).”(“Impact of Gambling”).  It was estimated in 1990 that nearly 2% of all the population of gamblers were probably pathological gamblers. We did not attempt to independently verify the results or methodologies of these studies. “NGISC reported that pathological and problem gamblers in the United States cost society approximately $5 billion per year and an additional $40 billion in lifetime costs for productivity reductions, social services, and creditor losses.” (“Impact of Gambling”).  However, according to NGISC, the estimates are based on a small number of tangible cost; and, as a result, the figures must be taken as minimums.”””

More than 86% of Americans have admitted to gambling at least one time. Gambling is legal in all states except Utah and Hawaii. “The percentage of Americans who gamble is increasing. The 1976 Commission on the Review of the National Policy toward Gambling reported that in 1975, 68 percent of Americans reported gambling at least once during their lifetime, and 61 percent reported gambling at least once in the previous year. According to the International Gaming and Wagering Business (IGWB) magazine, gross revenues4 from legalized gambling in the United States increased from about $10.4 billion in 1982 ($16.1 billion in 1998 dollars) to about $54.3 billion in 1998.” (“Impact of Gambling”).

As shown in figure 1, the majority of gross gambling revenue resulted from casinos (41 percent) and lotteries (31 percent).

The Casino Control Act of 1977 was enacted to authorize casino gambling in hotels which brewed the following statement, ““Legalized casino gaming has been approved by the citizens of New Jersey as a unique tool of urban redevelopment for Atlantic City. . .[and will] attract new investment capital to New Jersey in general and to Atlantic City in particular.” (“Impact of Gambling”). At first there was an increase of jobs and a decrease of unemployment. However, between 1977 and 1998, Atlantic City’s unemployment rate remained higher than New Jersey and national rates (almost two times higher during some years).

Many people in the Seattle region found themselves deeper into their addition in year 2004. Of these people they had become deeper “into their addiction because of the blackjack tables at a nearby Tulalip Casino headed straight for the Aurora Bridge.” (Slolnik, 2004). This successful public relations executive saw his marriage, life savings and family at risk and his whole world deeply strained as a result of his gambling addiction. He set out to jump over the bridge the 1998 summer. “It was my lowest low,” said Phil, who asked that his real name not be used because of career concerns. “I came very close to committing suicide at that point.” (Skolnik, 2004). There have been disastrous consequences because of legalized gambling in the Washington area. Pathological gamblers have managed to hurt themselves and their families because of their indebtness to their addiction losing their income, families and other precious possessions. They have been forced to file divorce, bankruptcy, been involved in crime and even involved in suicide in extreme cases.

“Gambling revenues statewide grew to more than $1.3 billion last year, 16 percent higher than in fiscal 2002 and more than double the revenues reported in 1998. Likewise, more people than ever are painfully acknowledging that they have gambling problems. A decade ago in Western Washington, there were four Gamblers Anonymous chapters, where problem gamblers could share their experiences and seek support. Now, 28 groups in the region meet weekly, and the average size of each meeting has more than doubled, to 20 to 25 people, and the numbers continue to grow.” (Skolnik, 2004).

Experts, and gamblers themselves, say gambling addictions often are more difficult to spot than alcoholism and drug dependencies — and can be harder to kick.

“’Alcoholics and cocaine-dependent males, they’re telling me, this hook is deeper,” said Charles Maurer, a Seattle psychologist who is the immediate past president of the National Council on Problem Gambling. “The cravings run deep.’” (Skolnik, 2004). Some people who gamble find it a past time but some people get into it as an exciting addiction.  When the gamblers lose control over his choices he becomes a pathological gambler and that is when the problem starts.  “Compared with other addictions, this phenomenon became officially accepted only relatively recently. In 1980, compulsive gambling was recognized by the American Psychiatric Association as an impulse control disorder.” (Skolnik, 2004).

There is a sense of thrill and euphoria that goes with gambling. Gambling provides a release from life’s everyday pressures for others. Gambling can provide medical ailments such as stomach problems, stress and heart problems. “Two extensive 1999 surveys sponsored by the Washington State Lottery Commission concluded that 5 percent of the adult population and nearly 1 percent of adolescents in Washington experienced gambling problems at some point during their lives. An additional 9 percent of adolescents were determined to be “at-risk” for developing these problems. One survey then estimated that in the previous year, 2.3 percent — or about 95,000 — of the state’s adults had gambling problems.” (Skolnik, 2004).

References

Skolnik, S. As Gambling Expands in States So Do Problems Retrieved August 22, 2010 from, http://www.seattlepi.com/local/161679_gambling23.html

Impact of Gambling United States General Accounting Office Retrieved August 21, 2010 from, http://www.gao.gov/new.items/gg00078.pdf

Gambling Ruins Lives Retrieved August 21, 2010 from, http://www.aproundtable.org/gamblingsruinedlives/impact.html