NRC and NORC Reports about Crime Rates

The Commission attempted to investigate the relationship between crime and legalized gambling through two studies mentioned here and elsewhere in this Final Report: the NRC and NORC reports. The results from these two studies suggest that a relationship may exist between gambling activity and the commission of crime, but concluded that insufficient data exists to quantify or define that relationship. More study is necessary to isolate the exact relationship between crime and legalized gambling. This result highlights similar conclusions reached by many in the research field, scholars who lament the paucity of information. Yet, one study also found that people within communities that host legalized gambling believe crime rates are up. We are not prepared to discount these views in the community. Rather, they are troubling and demand greater research, clarity, and knowledge.

The NORC study found that pathological gamblers had higher arrest and imprisonment rates than non-pathological gamblers. 67 A third of problem and pathological gamblers had been arrested, compared to 10 percent of low-risk gamblers and 4 percent of non-gamblers. About 23 percent of pathological gamblers have been imprisoned, and so had 13 percent of problem gamblers. 68 There are economic costs associated with arrests and imprisonment. Problem and pathological gamblers account for about $1,000 in excess lifetime police costs each. The 32 percent of pathological gamblers arrested had a lifetime arrest cost of $10,000. 69

Evidence provided to the Commission presented another side to this issue. A study by the chair of the Department of Criminal Justice at Virginia Commonwealth University found that:

An examination of arrest trends for embezzlement, forgery and fraud in nine of the largest casino markets shows no consistent pattern, although more jurisdictions report more decreases than increases in arrests. 70

Jeremy Margolis, a former director of the Illinois State Police, who also served as assistant U. S. attorney for the Northern District of Illinois and was the Illinois inspector general, published a comprehensive review of available information on gambling and crime. His study, “Casinos and Crime: An Analysis of the Evidence,” 71 was based upon 10 jurisdictions that have commercial casinos. In testimony before the Commission he stated that he found little documentation of a causal relationship between the two. Taken as a whole, the literature shows that communities with casinos are just as safe as communities that do not have casinos.

The Commission found wide-spread perception among community leaders that indebtedness tends to increase with legalized gambling, as does youth crime, forgery and credit card theft, domestic violence, child neglect, problem gambling, and alcohol and drug offenses. 72

One of the issues of most concern to this Commission is the ready availability of credit in and around casinos, which can lead to irresponsible gambling and problem and pathological gambling behavior. Forty to sixty percent of the cash wagered by individuals in casinos is not physically brought onto the premises. 73 Each year casinos extend billions of dollars in loans to their customers in the form of credit markers. Additional sums are charged by casino customer on their credit cards as cash advances. Casinos charge fees for cash advances ranging from 3 percent to 10 percent or more. 74

67 NORC, Gambling Impact and Behavior Study (April 1, 1999). 68 Ibid. 69 Ibid. 70 Jay S. Albanese, Ph. D., Professor and Chair, Department of Criminal Justice, Virginia Commonwealth University. “Casino Gambling and White Collar Crime: An Examination of the evidence” Presented at “Gambling and Gaming: Winners or Losers?” (April 30, 1999), p. 32. 71 An Analysis of the Evidence, Dec. 1997 72 Ibid. 73 Robyn Taylor Parets, “Cash Advances: Second Generation Money Dispensing Terminals Can Increase Casino Profit,” International Gaming & Wagering Business (September 1996), p. S8. 74 Ibid., p. S9.