The state and casinos: Protector or predator?

By LEO MALEY

Published on March 14, 2008

Speaker of the House Sal DiMasi indicated last week that the Legislature will vote soon on the governor's bill to bring commercial mega-casinos to our state. The decision to introduce casinos here has profound ramifications.

There are many reasons to oppose casino gambling in Massachusetts. Consider just two: Casinos are a drain on the economy, and they result in considerable individual and societal harm.

Individuals and families have only so much money available for discretionary spending. Money spent in a casino rather than in local businesses and cultural venues can harm the economic vitality of an entire region. Money lost playing slot machines has what economists call a very low multiplier. In other words, it does not re-circulate through the economy to the extent that money spent on other goods and services does.

Money spent in casinos is diverted from other areas of the economy. Area businesses suffer. Looking at data from the state of Illinois, Earl Grinols, author of the most comprehensive book-length study of the economic benefits and costs of casino gambling, found that for every $1,000 in casino revenue, businesses within 10 miles of a casino saw a decline of $367 in merchandise sales. Commercial casinos actually generated net job losses in 42 percent of counties where they were introduced. A study in the June 2007 issue of the American Journal of Economics and Sociology concludes that the states "should not expect any long-term growth effects from legalizing casino gambling."

Independently owned restaurants are especially hard hit. Drawing on amble data from regions around the country that have introduced casino gambling, the Massachusetts Restaurant Association estimates that casinos would force the closure of about 200 restaurants in the state.

These macro economic trends can undercut the economic vitality and diversity of an entire region. But the effect on individuals ought to concern us the most. Estimates vary, but it is likely that 40 to 50 percent of gaming machine revenues of a typical casino comes from problem or pathological gamblers.

A comprehensive literature review conducted by the National Gambling Impact Study Commission found that the rate of problem and pathological gambling addictions double among populations that live within 50 miles of a casino. A recent study published in the American Journal of Geriatric Psychiatry found that more than 10 percent of people over the age of 65 are at risk of having financial problems because of gambling, and that older gamblers are increasing at the fastest rate.

A Harvard Medial School study shows that 6 percent of the population has trouble with gambling at some point in their lives and 4 percent - 250,000 people in Massachusetts - report that in the past year they have had problems controlling their urge to gamble. Now imagine if that number were doubled.

Across the country, counties with just one gambling site have 18 percent more bankruptcies than those who did not. A survey of 105 bankruptcy filers in Minneapolis found that 52 percent had gambling losses. The average gambling loss was $22,000.

Several economists have attempted to estimate the economic costs to other - family members, business, and government - of a single problem gambler.

Take into account unpaid debts, lost economic efficiency, rising crime (such as embezzlement or writing bad checks to cover gambling losses), and increased court costs, and the estimates range between $10,000 and $40,000 per gambler.

Let's get personal. People are more than the sum of their economic activity. Every additional problem gambler creates a web of loss, anger and despair that impacts on family and friends. Consider the devastation caused by a single suicide. Then consider that Gulfport, Miss., saw a 213 percent increase in suicides (from 24 to 75) in the first two years after casinos opened in the city. Such numbers are replicated elsewhere.

Here in Massachusetts we stand at a moment of decision. As legislators decide how they will vote on casino gambling, they should ask the following question: Should government be a protector? Or should government be a predator? Their answer to that question has profound consequences for us all.

Leo Maley is the executive director of Progressive Massachusetts PAC and a board member of Casino Free Massachusetts. He lives in Amherst.