Gambling3

Throughout history, state-supported gambling has long been an alluring financial
cure-all, a quick fix approach to raising money. Despite steady opposition, legal
gambling has become widely accepted. Both public and private betting have been
popular in America since colonial years. The first horse racing track opened in the
mid-seventeenth century. Lotteries raised money for everything from public works to Ivy
League universities, and have been supported by such luminaries as George
Growth in the gaming industry always has been met by strong protests. Charges of
immorality, criminality, and corruption always accompany games of chance.1 Many
nations have outlawed lotteries at one time or another. An American ban occurred in the
face of rampant fraud in the late1800s. Other forums of gambling have mostly been
associated with organized crime interests (numbers games, roulette, dice, bookmaking,
Despite its checkered career, gambling is enjoying a renewed growth unprecedented in
American history. Casino gambling is expanding; floating gaming parlors are back on the
Mississippi; sports betting is increasingly accepted; and lotto fever has seized the entire
It’s hard to believe that New Hampshire re-introduced us to the lottery in 1964, a mere
thirty years ago. Wagering tripled between 1982 and 1989.2 As each state jumps on the
age-old bandwagon promising instant answers to fiscal problems, we need to ask
ourselves if legal gambling is a good bet.
Annual “handle” (amount wagered) for legal
forms of gaming exceeds $250 billion.
Illegal gambling adds about $50 billion, for a
grand total of $300 billion per year3 or
$2000 per adult. )To put this in perspective,
Americans spend about $425 – 450 billion a
Amount spent on specific games (1989):
Lottery – $20 billion; Horses – $14 billion;
Casinos – $200 billion ($107 billion in
1983); Bingo – $4 billion ($3 billion in
Las Vegas casino revenues grew from $1.9
billion in 1974 to $4.8 billion in 1980.6
Average yearly loss per gambler: $60 to
$250, depending on the game.7
Legal gambling poses some important questions. What are the odds of winning? What is
the impact on the poor? Does the government make good money on the investment? Is
gambling an efficient, reliable, and beneficial revenue source? Do casinos, race tracks,
and gaming parlors create new jobs? How can we decide if gambling is a reasonable
Fact number 1: Though the news media play up the mega-dollar jackpots, only a small
percentage of players can be winners. The chances of a substantial kill, whether at the
track or at the lottery counter or dice table, are never very impressive. You are more
likely to be struck by lightening8 than you are to hit a “big one.” To paraphrase a lotto
ditty, “Somebody’s going to lose–why not your?” Simple arithmetic proves this: the
greater the potential payoff, the smaller the odds of winning. And even big winners can’t
take it all with them. The state makes sure to get its share of the pay-out, and
long-lost “friends” and relatives will have their hands out. In additions, jackpots are paid
out in increments, and inflation makes each year’s payment worth less than that of the
Fact number 2: Though both rich and poor people gamble, gambling takes a higher toll
on lower-income people. Having less money to begin with, poor people can’t afford to
lose their money in a quest for quick riches. Yet studies show the poor are particularly
susceptible to gambling, and bet a higher percentage of their income than do those of
higher socioeconomic status.9 Then, too, poor people are often the target of massive
special advertising campaigns designed to part them from their money–as demonstrated
by the billboards on Chicago’s South Side.
Fact number 3: For the average state, gambling proceeds supply only a tiny fraction of the
money needed for operating expenses. For example, lottery revenue in Michigan and
California pays for just three to five percent of education budgets. The same is true for
taxes generated by games such as casinos or horse racing. The main reason for these
small returns is the high cost of bringing in the cash: huge sums must be earmarked for
administration, promotion and, of course, prizes. Gambling income in highly variable,
could dry up at any time, and tends to build a false sense of security, with
the public wrongly believing that other forms of taxation become less necessary. In short,
legalized gaming is one of the least efficient ways available for gaining revenue.10
Some Economic Statistics:
Odds of taking home the jackpot in Lotto
America’s “Powerball” game: 1 in 55 million.

For states holding lotteries in 1985, average
portion of revenue provided by games:
2.8%.11 For charitable gambling, portion of
receipts going to designated cause: about 5
to 10%.
How the typical gambling dollar is used by a
state: 50-85%, depending on the kind of
game, goes to prizes; 3-5% to
administration; 15% or more to promotion.12
Compare to standard taxes, where the
government nets ninety cents or more of
every tax dollar paid to it,13 or the return on
traditional means of fund-raising, which is
regularly seventy-five cents or more out of
every dollar received.
Decrease in on-track wagering (horses) from
1988 to 1989: over $26 million dollars.14
Revenue pattern for Illinois lottery from 1975
to 1980: 1975 – $57 million; 1976 – $75
million; 1979 – $28 million; 1980 (new
game) – $88 million.15
Salaries of jobs created by Atlantic City
casinos: 33% under $10,000; 71.7% under
$15,000; 81.7% under $20,000.16
Atlantic City employment increased 65%
from 1975-1980; but unemployment
remained nearly steady meaning that local
residents are not benefiting.17
Fact number 4: Any form of legal gambling levels off over time. Players lose enthusiasm
for the same old thing. States try to drum up more business by promoting new games or
by glamorizing existing ones. More money goes into attracting players rather than to the
prime example of how a gamin industry falls on hard times. On-track betting peaked in
mid-1970s, but has declined for years at most sites. Minnesota introduced the “King of
1985, with a first year handle of over $84 million. In 1986, the figure grew to $133
the, the take has fallen to less than that of the opening year.18 As usual, the “answer” has
encourage off-track betting offices (begun in New York) and wagering by telephone.
The revenue statistics for Illinois lottery resemble a carnival roller-coaster. When a new
brought on board, interest climbs for a year or so. Then people become jaded, and
dive. Illinois will try its luck with riverboat gambling, something tried with initial success
Iowa. Since there is but one river between the two, competition is bound to be fierce.

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gain the upper hand with unrestricted wagering (Iowa restricts betting to $200 per person
Again, the predictable escalation has no end in sight.
Fact number 5 Gambling does not generate new wealth or high-end employment. Most
people who gamble don’t take cash out of savings to do so. They use money designated
either for other discretionary expenses or–if they are poor–for necessities. The jobs that
are created tend to be low-earning positions at tracks, casinos, and lotto outlets, and don’t
always benefit the locals.19 New Jersey has banked heavily on the success of casinos to
help address unemployment, but the jobless rate and number of people on public
assistance have remained about the same.20 In short, gambling is hardly a painless tax.
Many people, seeing that illegal gambling is a bad influence in society, believe gaming
controlled by the state rather than left to crooks. They say legalization takes away
otherwise enriches mobsters and racketeers, thus reducing criminal activity. Some claim
is inevitable, fulfilling a human “need.” Still others contend that lawful games are
diversions which provide numerous social opportunities while financing worthy
time, a large (but shrinking) segment of the population rejects any justification as being
wrong-headed. for them, gambling is a vice which promotes a wide variety of evils,
irresponsibility, predatory activities, and so on. In addition, there are specific objections
might make to the arguments of legalization’s proponents:
Argument #1–Crime Control: Does legalizing gambling cut into the turf and “take” of
Apparently not. First of all, legalization opens up new opportunities for public corruption.

always been government officials who traffic in crime. Now we have expanded the
include a greater range of temptations. The predictable outcome: more shady dealings
servants trying to grab a share of easy money.22 Examples range from the mayor of
being indicted for bribery and extortion connected with casino development to the fixing
drawings by state workers in Pennsylvania.
Second, legal gambling attracts the same kind of criminal element as unauthorized
of horse racing, for example, has been a long tale of bookies, fixers and loan sharks.

also often attract thieves, extortionists, prostitutes, and swindlers. Again, legalization
ready-made occasions for such predators to operate.23 As a consequence, the moral
suffers, and police staffs are stretched to the breaking point by the need to respond to the
Thirdly, legal gambling probably does not diminish illegal activities. State-sanctioned
not welcome the participation of criminals. This means there are persons who will still
in the local precincts, and they will continue to find a clientele. Why is this? For one
gambling can be more congenial than the legal forms (at least as long as you can pay up).

often give breaks, players have several betting options, with more favorable odds, and
not taxed. An even more intriguing point could be made: legal gambling provides another
criminals to exploit. For example, they are now able to play off state lotteries, taking
daily and weekly drawing, just as they have been able to provide bookmaking services for
A story of gambling and crime: The effect of
From 1970-78, crime decreased
In 1978, casinos were introduced to
1979 to 1980, the number of crimes
1977 to 1981 saw a 300% increase in
total crimes; (by 1980, one crime for
One estimate of the increase of illegal activity
in U.S. from 1982-9188: 25%26
Nevada’s suicide rate: 24.8 per 100,000 –
far above the national average of 12.527
Argument #2–Inevitability: What about the argument that gambling is inevitable, and
rather than organized crime, should benefit? The question has already been partly
legalization doesn’t hurt criminal activity. But even if it did, would it be a good idea?
1.The more opportunities there are for people to gamble, the more they will gamble.
2.Making it legal increases the number of people willing to gamble.
Argument #3–Harmlessness: Gambling is most likely inevitable. Most Americans
legalization. Yet the only way that we can accept the idea that we may as well legalize
if gambling is essentially harmless. But gambling is not a simple friendly social pastime.

people to fruitless fantasies of instant riches; it means exploiting or being exploited by
attempt to make money without working for it; certain forms (most notably casinos) prey
elderly;28 and it is a public health menace.
The average American gambler probably doesn’t risk his financial health through
wagering. Still, at least two categories of people suffer far more than average because of
gambling. The first–the poor–has already been noted; for them, every dollar bet steals
from basic provisions. The second category includes those who cannot contain their urge
to join the excitement of the chase–the compulsive gambler.
The Problem Gambler–A Picture: the compulsive gambler follows the downward curve
familiar to that experienced by other addicts. What begins as the exciting fulfilling
prospect of beating the odds,29 has its tragic end in bankruptcy, ruined marriages, and
shattered reputations. for the compulsive gambler, the play becomes the focus of life. As
long as the winning phase continues and
the better is “on a roll” everything is rosy. As soon as losing sets in, so does the descent.

becomes a reason for another wager. Losses mount. Bets become larger and more
attempt to break even. Any winnings are re-invested in the process and used as an
further gambling. Moral considerations become secondary; denial, lying and worse
Such people come from every segment of society, and it is now acknowledged that, with
of lotto, big-time bingo, and pull tabs, both men and women are being affectedo
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