Gambling Caveats from The Commission in The United States

In addition to these activities, the Commission invited input from a number of sources affected by gambling, particularly governors and other tribal, state, and local officials in jurisdictions in which some form of gambling is legalized, as well as organizations representing those affected by gambling. Regrettably, some segments of the gambling industry were not as forthcoming in responding to information requests as were others. In particular, many of the Indian tribes involved in Class III gambling, as well as the National Indian Gaming Commission, refused to provide information to this Commission. 9 This is in stark contrast to the assistance provided by many commercial gambling companies, the pari-mutuel industry, and state and local officials. The Commission, taking into account the tribal sovereignty issue, thought it more appropriate for Congress to address this than to utilize the Commission’s limited resources for legal remedies and sought information from alternative sources wherever appropriate.

In attempting to determine the impact of gambling on people and places, the Commission offers a number of caveats for policymakers to consider.

First, social and economic impacts are not as easily severable as policymakers would like. In fact, this is considered a false dichotomy for most individuals other than economists. Employment, for instance, is both an economic and a social benefit. Likewise, crime is both an economic and social cost.

Secondly, as was noted in the overview to this chapter, it is extremely difficult to quantify social costs and benefits. Some economists suggest distinguishing between a “private” cost and benefit and a “social” cost and benefit. NRC also notes the confusion of “transfer effects” from “real effects.” For instance, in an economic analysis of transfer effects, bankruptcy would not be considered to be a cost by economists because the dollars are merely transferred. Nor would a casino job necessarily be considered a true benefit, since other jobs may be available. While this may be true to economists, we know that bankruptcy is indeed a “cost” to the individuals and families involved, just as a good job is a tremendous benefit to that family.

Just as only net economic and social benefits should be included on the positive side of legalized gambling’s ledger, only net social and economic costs should be tallied on the negative side. Determining net costs associated with pathological gambling, for example, requires an understanding of what researchers call “co-morbidity,” described as “the co-occurrence of two or more disorders in a single individual.” 10

Reviews of the literature indicate that substance use disorders, mood disorders such as depression, suicidal thoughts, antisocial personality disorder, and attention-deficit hyperactivity disorder may often co-exist with pathological gambling. 11 To the extent that researchers can isolate the effects of pathological gambling on, for example, marital stability, from the effects of co-existing conditions like drug abuse can researchers determine the net negative effects of pathological gambling on marriages.

This task is challenging. As the NRC explains, “Evaluating studies of conditions that co-occur with pathological gambling requires careful formulation of research questions, such as: Does gambling precede the onset of other disorders? Do certain disorders exacerbate pathological gambling? Is there a pattern of symptom clustering? Is the severity of one disorder related to the other? And is a standard assessment instrument used to collect data for both gambling and the comorbid condition? Very few pathological gambling studies have addressed even one of these questions.” 12

Third, what society terms “the gambling industry” actually involves segments that are quite different from one another. Destination casino resorts bear little resemblance to convenience gambling. The former provides numerous jobs, restaurants, shopping and entertainment as well as a number of games in a highly regulated setting, while the latter involves a relatively small number and type of games, creates few or no jobs, is far less regulated and fails to create significant beneficial economic impact.

9 In testimony before the Commission, Rick Hill, the Chairman of the association which represents tribes operating gambling facilities, stated, “We don’t trust you to give you the information. It is that clear. Every time we give our financials [information] to someone, someone has used it against us,” Virginia Beach, VA (February 9, 1999). 10 National Research Council, p. 4-13. 11 Ibid, pp 4-14 to 4-21. 12 Ibid, p. 4-15.