Needed: Serious Study Of Gambling Impact

Most lawmakers trying to legalize casinos are ignoring what every savvy poker player knows: The way to win is to have good information about the other players’ hands.

The lawmakers’ approach could make big losers of us all.

Congress’ recent approval of a Gambling Impact Study Commission provides a chance to collect some serious information. While state and local lawmakers continue to tout partnerships with casino companies, there has, incredibly, been little objective study of the real results of America’s gambling explosion.

Yet, casinos are promoted as substitutes for Indiana’s dying steel industry, for out-of-work Massachusetts fishermen and for New York’s troubled vacation resorts.

New York Gov. George Pataki supports a constitutional amendment to allow casinos in four areas of his state and slot machines at eight racetracks, effectively transforming them into casinos.

Similarly, Massachusetts Gov. William Weld has proposed casinos at several locations and slot machines at all of the state’s racetracks.

Massachusetts lawmakers rejected a proposed comprehensive study of the impacts of casinos and instead asked how the governor’s plan would affect lottery revenues.

Nearly all members of New York’s gambling study task force are Pataki-appointed state agency heads - officials unlikely to take positions contrary to those of their boss. Pataki’s own support of the gambling amendment raises another serious question about the intention to produce objective research.

That Pataki’s chief campaign fund-raiser in 1994, Charles Gargano, who now heads the state’s business development agency, formerly was on the board of directors of a casino management company hardly suggests unbiased policy-making. Gargano reportedly still owns stock in the company, Alpha Hospitality, although his spokesman says the stock is in a blind trust.

And Alpha was hired as a management company by the Mohawk tribe, which is attempting to build a casino in an area designated by the amendment.

Instead of dubious studies and task forces, what’s needed is a serious look at what gambling actually means to a state’s economic and social well-being.

Useful research would examine how much consumer spending is being siphoned away from other businesses by gambling. It also would examine the new criminal justice costs and the rises in bankruptcies, embezzlement, insurance fraud, suicides, child neglect and other social problems that plague casino states. It would examine what happens to a state’s politics when governments shift from being regulators of gambling to being promoters of gambling.

In many states, crime and compulsive gambling have soared since casinos were introduced.

U.S. News and World Report magazine reported this year that crime rates in casino towns rose nearly 6 percent in 1994 while falling 2 percent in the rest of the United States.

A 1995 report by the Minneapolis Star Tribune said bankruptcies in Minnesota increased 20 percent after casinos opened there.

Iowa and Louisiana introduced casino-style ventures in the early 1990s and now face more compulsive gamblers. In 1995, Iowa’s Department of Human Services found the number of problem gamblers had tripled since casinos were introduced; Louisiana now has the highest recorded rate of problem gamblers in America - one in every 14 adults.

Although the costs of problem gambling admittedly are difficult to quantify, research indicates potentially staggering costs.

Just a 1 percent rise in adult problem gamblers in Massachusetts costs state businesses and taxpayers more than $450 million a year. In New York, the same small increase would cost about $1.4 billion.

So why the rush to more and more gambling? The stakes are high, the odds of winning are long and the consequences of losing are potentially devastating.

The establishment of the federal Gambling Impact Study Commission makes the case for waiting even more logical.

The commission alone is no guarantee of a thorough study. Although the American Gaming Association, the casino industry’s lobbying arm, failed to stop the federal study, it succeeded in limiting the commission’s subpoena power. The industry likely will try to weaken the study further by influencing the commission’s makeup.

But at the very least, a commission will focus national attention on the gambling issue.

If new information confirms the casino promoters’ promises, there will be plenty of time to bet on the luck business.

But if the results are bleak, we will have a better opportunity to change the game.

As they say at poker: You’ve got to know when to hold ‘em and know when to fold ‘em.

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