POV: Social costs of gambling

dice SQProponents of casino gambling are spending big money on everything from campaign contributions to key legislative sponsors to a battery of radio ads to those lawn signs sprouting up all over in order to get us vote “yes” to allow more casino gambling in the state. TV spots are next. Their big point is that there are the alleged financial benefits from gambling for hard-pressed upstate communities and all of New York.

There is no well-financed alternative campaign educating the public about the potential social costs. What if we use the big-money metrics of dollars and cents to look at the likely costs? How would things balance out?

Quantifying the direct social impacts of gambling is challenging. How do you add up the times a spouse spends away a joint 401k on the slots? How do you count the Social Security checks swapped for chips? Instances like these, regularly observed at casinos, are not systematically documented. Also, doctor-patient confidentiality shrouds gambling-related health treatment.


But “hard to measure” doesn’t mean “impossible to estimate.” An estimated two to three per cent of adults in the U.S. are problem gamblers (people unable to resist the urge and experience negative social and family impacts as a result). An additional one or two per cent are pathological gamblers (medically diagnosed with impulse control disorder). That adds up to over nine million Americans. Men, African-Americans, people age 40 to 64, people without a college degree, and those with annual incomes less than $50,000 are more likely to be pathological gamblers. The rates of problem and pathological gamblers double within 50-mile radii of casinos.

The best national research focused on identifying the social costs of gambling estimates that the total cost per pathological gambler is nearly $13,000 annually, which translates on average to $266 per capita adult; and, that these costs borne by citizens and taxpayers outweigh benefits by a ratio of three to one.

Crime. Casino locations are correlated with higher rates of violent and property crimes, as well as non-violent crimes like fraud and forgery. In counties with casinos, approximately nine percent of property crime and 13 percent of violent crime is attributable to their presence.

Business and employment. One in five gamblers in treatment report job loss due to addiction. When employed, gamblers have lower productivity, greater chance of sick days and time theft, and more likelihood of dismissal for offences like embezzlement.

Bankruptcy. In the 298 U.S. counties with legalized gambling, there is an 18 percent higher bankruptcy filing rate. Counties with five or more legalized places to gamble have a bankruptcy rate of 35 percent higher than counties without them.

Suicide. About half of pathological and problem gamblers have seriously contemplated suicide. At least 15 percent have attempted suicide, compared with less than one percent of the general population.

Illness and social services. The extreme financial stress and employment difficulties associated with gambling are linked with unemployment, and also with medical and mental illnesses such as stress, anxiety, depression, chronic headaches, intestinal problems, asthma, cognitive disorders and cardiovascular conditions. These generate costs for therapy and treatment, unemployment insurance, Medicaid, and such social services as welfare and food stamps.

Regulatory. Gambling is a regulated activity because of the casino industry’s historical propensity for fraud and abuse. The bill passed to accompany the proposed New York gambling amendment includes a budget for regulation. Direct regulatory costs must be paid either from levies on the casinos or through taxes.

Family impacts. Family costs include divorce, domestic violence, child neglect and abuse. Since the opening of casinos, the number of divorces in Mississippi has nearly tripled, and requests for help at domestic violence shelters have increased in the range of 100 to 300 per cent. The problem of children being left in closed, hot cars became so commonplace at Foxwoods in Connecticut that parking-lot signage threatening legal action against negligent parents was posted.

“Abused dollars.” Gambling money obtained from family, friends or employers under false pretenses is known as abused dollars. Examples include stealing from an employer never reported out of concern for the employee, theft that is never revealed because the thief is a relative or friend, and money “loaned” under duress that is never repaid.

Here in Ulster County, we certainly have places with dire problems. In Ellenville, about one in five families live in poverty, and our county has a 7.6 percent unemployment rate. But is gambling the way to make things better? Based on Ulster County’s adult population, assuming we have the current national rate of pathological gamblers now (and conservatively excluding problem gamblers), opening a casino in the county could double our rate – thereby potentially adding 1469 pathological gamblers at an estimated cost of $18,919,000 annually. On November 5, Ulster County voters need to consider not just dollars but both dollars and sense, and social costs and benefits, to determine whether casinos are really the answer.

KT Tobin and Will Raphaelson

KT Tobin is associate director of SUNY New Paltz’s CRREO and Will Raphaelson is a Centrino scholar