Legal Gambling May Be a Bad Bet

Insight on the News, May 31, 1999 by Catherine Edwards

Government got into gambling to weed out the criminal element and boost revenues without tax hikes. But critics say the games rely on those who can least afford to play.

A surprise success at the box office this year was an Irish film titled Waking Ned Devine. In this black comedy, the elation of winning the Irish sweepstakes kills a man in a remote Irish fishing village. His friends bury him, take his winning ticket and then go to extraordinary lengths to pretend that Ned still is alive to cash in on his fortune. The Irish always have prided themselves on their luck and, until 1963, the only hope Americans had of winning a lottery was to join them in Ireland or play illegal numbers games run by criminals in back alleys.

Today lottery winners are announced every day on television, as state and local governments profit from having nationalized the numbers racket long run by organized-crime syndicates.

Thirty-six years ago New Hampshire was the first state in this century to institute a lottery. Since then 37 other states and the District of Columbia have opted for this means of obtaining revenue without having to raise taxes. Lottery sales last year mushroomed to $35.8 billion. Lottery mania reached a high last July when 13 machinists in Ohio won a record $295.7 million jackpot in the multistate Powerball game.

But even winning the lottery doesn't guarantee happiness. Winners find themselves besieged by salesmen, threats and intimidation from total strangers. One Virginia couple that won a jackpot feared their children might be kidnapped and held for ransom. A survey at a local Washington rescue mission revealed former winners who had blown their money in one night or lost it over time to pay for drugs or alcohol.

Rep. Frank Wolf, a Virginia Republican, introduced legislation in 1997 that created the National Gambling Impact Study Commission, or NGISC. After nearly two years of work, the commission will present its final report to Congress and the president in June. Last month it voted to approve a draft report recommending that policymakers at all levels impose a moratorium on gambling until research and assessment can be completed. Four of the nine commissioners dissented, however, and one of those vowed to write a minority report. But all of the commissioners agree that the lotteries need reform.

Commission members were struck by the findings of Duke University professors Charles Clotfelter and Phillip Cook, authors of a 1989 book, Selling Hope: State Lotteries in America. They since have updated their research, presenting it to the commission in April. Clotfelter and Cook found that 5 percent of lottery players account for 51 percent of sales and spend an average of $3,500 a year on tickets. They also found that the most frequent players are from households earning less than $10,000 a year, and that blacks play four times more often than whites. The lotteries make the bulk of their revenues from those who play frequently. Assuming everyone was a casual player and spent the median amount of $74 a year on lottery tickets, sales for 1997 would have dropped from $36 billion to $7.4 billion. "The sense that everybody plays and it's a broad-based participation is absolutely true, but the people who are important in terms of revenues are the small percentage playing $3,500 a year or more," says Cook. These mostly are poor blacks.

Dr. James Dobson, president of Focus on the Family and a member of the gambling commission, says he is concerned about the lottery harming not only the poor and desperate but also the gambling-addicted. Keith Whyte, executive director of the National Council on Problem Gambling, agrees. "Of the $35.8 billion netted in sales last year by the gambling industry, only $20 million was spent addressing problem gambling. Fifteen states have no funding for helping problem gamblers," he says. According to a study commissioned by the NGISC and conducted by the University of Chicago's National Opinion Research Center, 5 million Americans were at risk for pathological gambling behavior last year and 15 million are at risk during a lifetime.

Gamblers Anonymous, which is modeled on the 12-step program of Alcoholics Anonymous, had 706 chapters in the United States in 1992. In 1999 it has 1,340 chapters. The commission recommends in its draft report that a portion of revenues from the lotteries be applied to treatment, research and education concerning pathological and problem gambling.

The Rev. Steve Burger, executive director of the International Union of Gospel Missions, knows what it means to try to reassemble lives that have fallen apart from excessive gambling. "The groups that promote gambling certainly don't pick up the pieces," he says. Burger says the consequences of gambling addiction are much the same as when the industry was run by organized crime. "Mr. Gambling cleaned himself up and came out of the closet, put on a nice suit and called himself Mr. Gaming," says Burger.

A survey of mission residents found 85 percent said they had gambled and played the lottery, 70 percent said that gambling made it more difficult to get off the streets and 18 percent believed it was a factor in their homelessness. Burger admonishes the evangelical church for its silence on the gambling issue. Preachers don't want the controversy, he says. "We are standing against a big-business industry that often focuses its advertising on poor, urban folks."