Thursday, October 17, 2013

Idle Thoughts -- The Dark Side of Gambling

Debate: The bad effects of gambling

In a 1994 article in the Pittsburgh Post-Gazette, William N. Thompson acknowledges that gambling supporters have a point when they say that allowing gambling produces jobs, tax revenues, and entertainment. However, he goes on to point out that the same thing could be said of dangerous drugs.

He notes that we don't simply allow any new drug, even a medical drug, to be put on the market without previously being tested for possible bad effects. But no government agency has conducted tests of the negative effects of gambling. The FDA tests drugs, who tests gambling?

I would like to add that the Gaming Commission in Nevada keeps a close eye on Las Vegas, but other states do not provide such an agency or such a service. Also, the Gaming Commission regulates the industry, it does not test for negative consequences.

Furthermore, if we accept the argument that legalized gambling is a good thing because it entertains people, creates jobs, and provides tax revenue then should we not also legalize other activities that provide these three services?

Las Vegas, often seen as the center of American gambling, also allows for legal prostitution. The current trend in American states to legalize the use of marijuana, or at least decriminalize it, suggests that we should also legalize the use of any drug as long as it meets the same requirements we apply to alcohol. Why not legalize other activities such as amateur street racing? If it is sufficiently controlled, so that no one's lives are at risk except those of the adult drivers who choose to engage in activity, what is wrong with that? It would certainly provide jobs, tax revenues, and entertain people.

The point I'm making is that the three benefits of gambling are certainly desirable. Who doesn't want more jobs? Every government needs more tax revenues. And we all enjoy being entertained. But this ignores the negative effects. Do the positive benefits outweigh the negatives?

To answer that question, we should also consider moral issues, health issues, and economic damage.

Health: The article I referreed to above goes on to point out that 20% of American gamblers have been found in some studies to cause themselves serious economic harm even to become addicted to this "entertainment". An additional 4% become so deeply addicted that they cannot break the pattern of self-destructive behavior without major assistance from an outside group, such as Gamblers Anonymous.

At the very least, it is obvious that gambling is a dangerously addictive activity. Gamblers have lost their jobs, their homes, their families, and wreaked destruction upon their lives. Do we really want to legalize the activity that has such results because it gives economic gains and entertains people?


It has been pointed out the gambling is not simply entertainment. When you watch a movie, read a book, or engage in healthy outdoor activities there are clear benefits to be gained in both mind and body. What benefit is gained by sitting in a smoky room, sipping alcoholic beverages, and playing cards or pulling the lever of a slot machine?

What is the moral argument in favor of operating a multibillion-dollar business which makes a good deal of its money off the desperation of the poor? Out of desperation, many poor people gamble in the hopes of suddenly having their problems solved. Yet we have all heard stories of someone who won a huge amount in a lottery, quit his job, and then a few years later found he had spent all the money and was now bankrupt and jobless. This has actually happened at least a few cases. A huge amount of money suddenly handed to a person rather than a reasonable amount of money earned through careful labor tends to make a person think that he has an endless source of money.

Finally, there's the question of sin. Money spent on activities which improve your mind or strengthen your body are clearly appropriate expenditures. Many argue that to spend money on the pointless seeking of thrills and gambling is clearly money wasted, and it is wrong to waste your resources when they could be devoted to doing the work of God in the greater community. 

Economic damage:

In "The Business-Economic Impacts of Licensed Casino Gambling in West Virginia: Short-Term Gain but Long-Term Pain",
By John Warren Kindt, the author states that careful studies of the real impact of gambling on a government's economic situation are rarely made before gambling is legalized. In fact, he states that the only information we usually have when making these decisions is the cherry picked and carefully puffed up reports received from those who would run the operation and reap the profits.

He goes on to state, "The field research throughout the nation indicates that for every dollar the legalized gambling interests indicate is being contributed in taxes, it usually costs the taxpayers at least 3 dollars-- and higher numbers have been calculated..." These extra costs to the taxpayer include areas such as extra policing, extra city services that must be provided both to the gambling establishments and to the tourists who come to gamble, and loss of revenue to local businesses who lose customers to the casinos.

He also points out that many of the gamblers are poor. A wealthy person can well afford to gamble, and middle-class person can afford to do some gambling if he does it carefully, but a poor person should not be spending his money on this. Nevertheless, many of those who gamble a significant proportion of their income are the poor. There are many reasons for this, including the fact that psychological studies have shown that when human beings are under stress, especially the stresses of poverty, they make very poor decisions. This has been shown to be true even with the same person under different circumstances. That is to say, if a person is under economic stress, he makes poor decisions. But the same person, when the economic stresses have been removed, makes much better decisions.

The final economic argument is that careful studies of the supposed economic benefits of legalized gambling often show that there are indeed benefits, short-term benefits. However, when looked at over a period of years and even decades, the effects are often economically negative. In other words, gambling causes a short-term gain and a long-term loss.

But even if there were a long-term gains, if those three benefits are the only standards, why not gladiatorial games in which the loser is actually killed? Or dogfights? Or cockfights? Or bearbaiting?

All those activities were once legal, and I would be surprised if the same arguments regarding the benefits of allowing them were not made at that time.

I will end this on a personal note. Back in the 1950s I often watched a program called the Racket Squad. I don't remember too much about it, but I do recall at least one episode of this program and a number of others dealt with the terrible problem of the numbers game. The numbers game was a system in which, by one method or another, a set of numbers was generated on any given day. Monsters sent out agents to allow people, usually in the poor community, to place bets on which numbers would turn up on a given day. 

Back in those ancient days there was no question in anyone's mind. This was indeed a racket. It was an immoral, despicable activity used by greedy, evil mobsters to prey upon the helpless and the poor. In return for their hopes of an economic win, the victims surrendered their precious and much-needed cash.

Today we call it the state lottery.

The California lottery was begun when I was Principal. The promise was made that much of the money would go straight to the schools and every school would see a huge increase in income. A few years after the lottery was adopted, a study was done on statewide school district income to see what the actual impact have been. The real results were that some schools did indeed make more money. Other schools made no more nor less than they had made before the lottery. And some schools received even less money than they had before the lottery.

The reasons for these disparate results are complex, but they involve things such as people assuming that since the schools were getting rich on all that lottery money, there was no need to maintain the tax base.

"The best throw at dice is to throw them away." ---Mark Twain.

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