Gambling

The Legalization of Gambling: Its Social Impact

"For as long as humans have gambled, there has been apprehension about excessive risk-taking and intemperate gambling". The National Research Council.

Neither gambling nor opposition to gambling is a new phenomenon. From their respective

philosophical vantage points, leftist critics have long viewed gambling as

an economic albatross around the neck of the working classes while social conservatives

continue to regard gambling as a moral disease whose painful symptoms

spread poisonously throughout civil society.1 In the mid-nineteenth century, as

prominent a social commentator as Charles Dickens devoted a magazine article to a

critique of gambling (Dickens 1852). A decade-and-a-half later, the great Russian

writer Fyodor Dostoyevsky penned the autobiographical novel, The Gambler (1866),

which grippingly described the psychology of problem gambling. In the modern era,

the tone of the vast majority of media and cinematic examinations is little changed

since the release of the movie The Gambler, a 1974 portrayal of habitual gambling's

disastrous effect upon the life of an otherwise sensible college professor. Such con-cern

reflects gambling's historical role as a popular leisure activity. Indeed, gambling

was widespread in Ancient Rome (France 1902); it was enjoyed 3,000 years ago in

Egypt and more than 5,000 years ago in China. However, what is new is our comparative

ability to assess empirically the arguments both of those who claim that the

costs of gambling outweigh the benefits and of those who conclude that the cost-benefit

imbalance runs in the opposite direction.

At the commencement of this research, our assumption was that legalized gambling

engenders both costs and benefits to the individual and to society. Therefore, the fundamental policy question addressed in this report is whether or not the benefits of

legalized gambling outweigh the costs? Complicating such a cost-benefit analysis,

however, is the fact that both the social and economic effects of gambling are inherently

difficult to measure. This is especially true for many of the intangible social costs (e.g., the emotional pain experienced by family members of pathological gamblers)

and benefits (e.g., the entertainment value derived from gambling). In preparing

this report, our research encompassed a comprehensive review of the relevant

social-science literature in order to identify and analyze those empirical studies that

shed the most light upon the nature and consequences of legalized gambling. Allowing

for the difficulties in quantifying the intangible costs and benefits of gambling,

this report provides as detailed a socioeconomic overview of the impact of gambling

as is empirically feasible.

The issues surrounding legalized gambling weighs heavily upon many communities around the United States in recent years. With a greater and greater move to legalize gambling more and more communities are hearing the well-rehearsed promises of increased jobs and revenues for their schools and communities. While some are definitely in favor of legalized gambling, others adamantly oppose it. In reality the pros and cons of legalized gambling are many. We can however, weigh out a variety of factors such as the number of jobs it provides, the revenues it presents and the effect on crime in the area to determine that overall legalized gambling has a positive effect in the communities where it is implemented.

Gambling used to be what a few unscrupulous people did with the aid of organized crime. But gambling fever now seems to affect nearly everyone as more and more states try to legalize various forms of gambling. Legalized gambling exists in forty-seven states and the District of Columbia. The momentum seems to be on the side of those who want legalized gambling as a way to supplement state revenues. But these states and their citizens often ignore the costs that are associated with legalized gambling. The social and economic costs are enormous.

The history of gambling in this country is interesting. Gambling arrived in colonial America with the first immigrants from Europe. Prior to the nineteenth century gambling was local and unorganized. The lottery was popular in the eighteenth century and was respectable. Churches were built from lottery money and the universities of Harvard and Yale were assisted by the lottery. There was a plan to use lottery money to finance the Continental Congress but there was no method to sell tickets in a timely manner due to the nature of the times. Lotteries increased in size, number and coverage after the Revolution until the War of 1812.

Proponents argue that state lotteries are an effective way to raise taxes painlessly. But the evidence shows that legalized gambling often hurts those who are poor and disadvantaged. One New York lottery agent stated, "Seventy percent of those who buy my tickets are poor, black, or Hispanic." And a National Bureau of Economic Research "shows that the poor bet a much larger share of their income."

A major study on the effect of the California lottery came to the same conclusions. The Field Institute's California Poll found that 18 percent of the state's adults bought 71 percent of the tickets. These heavy lottery players (who bought more than 20 tickets in the contest's first 45 days) are "more likely than others to be black, poorer and less educated than the average Californian."

Studies also indicate that gambling increases when economic times are uncertain and people are concerned about their future. Joseph Dunn (director of the National Council on Compulsive Gambling) says, "People who are worried