Local Gambling Impact and Other Economic Effects

The Commission also heard numerous stories of pathological gamblers forced into bankruptcy as a result of problem and pathological gambling. Nearly one in five (19.2 percent) of the identified pathological gamblers in the NORC survey reported filing bankruptcy. This compares to rates of 4.2 percent for non-gamblers and 5.5 percent for low-risk gamblers. 79 Twenty-two percent of nearly 400 members of Gamblers Anonymous surveyed had declared bankruptcy. 80

Personal anecdotes were very compelling. The Commission heard about a couple along the Mississippi Gulf Coast, both of whom began gambling excessively at the casino, who lost approximately $70,000. When they received a letter from a credit card company demanding $10,000 in payment, the couple made a last-ditch effort to recoup the money at the casinos. They lost $2,000, then filed bankruptcy. 81

Nineteen percent of Chapter 13 bankruptcies in the State of Iowa involved gambling-related debt. Bankruptcies in Iowa increased at a rate significantly above the national average in the years following the introduction of casinos. Nine of the 12 Iowa counties with the highest bankruptcy rates in the state had gambling facilities in or directly adjacent to them.

Other economic impacts are mentioned elsewhere in this report. Costs include lost productivity of workers impaired by problem or pathological gambling and the cost to society for treatment programs. 82 While precise dollar costs are not yet available to measure these losses, the rapid expansion of gambling into so many communities is likely to produce exponential growth in these costs with attendant burdens in business and social services.

Additional economic benefits, including improvements in community infrastructure, particularly in transportation, as well as a reduction in public assistance spending are evidenced in the Commission’s research. In Biloxi, the Commission received testimony on capital investment, and new development, new car and home purchases. Joliet, Illinois testified as to the reduction in their bond debt and new sources of capital investment. The Commission also received a study from Coopers and Lybrand that highlights employee impacts on charitable giving, volunteerism, and other positive economic impacts. In public comments to the Commission, many individuals recounted personal transformations that they attributed, in part, to a job in the casino industry and the impact these have had in their ability to contribute in a meaningful way to the community. Walter Caron, a cook at Caesars Palace, told the Commission, “I now have an expanded sense of community, and I realize more of my responsibilities to that community . ” 83

Finally, while the national impact of gambling is significant, the greatest impact is felt at the local level. In some locales, gambling has been a critical component of community economic development strategies. For example, the Nevada Resort Association and the Nevada Commission on Tourism found that the gambling/ hospitality industry created gross state-wide revenues of almost $8 billion in 1997; contributed $2.2 billion annually to federal, state and local taxes; paid taxes representing one-third of the state’s general fund revenues forecast for 1997-99; generated about $36.5 million in county-level revenues in fiscal year 1997; directly employed 307,500 people and was directly and indirectly responsible for 60 percent of the state employment total; disbursed salaries of nearly $6 billion, representing one quarter of all wages paid state-wide in 1996; added $10.3 billion to personal incomes; and contributed an estimated $30.6 billion to the state’s business receipts, representing 63 percent of Nevada gross state product in 1995. 84

79 NORC, p. 46. 80 Lesieur, testimony before the National Gambling Impact Study Commission, Atlantic City, NJ (January 1998). 81 McCormick, Biloxi Site Visit 82 The gambling industry asserts that it contributes toward state-administered treatment programs through gaming tax revenues. Interestingly, NORC’s analysis of the casino survey states that 96 percent of the 25 largest casinos provide gambling treatment coverage for their employees. 83 Walter Caron, testimony before the National Gambling Impact Study Commission, Las Vegas, NV (November 10, 1998).