WHY CASINOS MATTER

Thirty-One Evidence-Based Propositions from the Health and Social Sciences

Casino gambling is spreading into the mainstream of American life and unleashing a host of troubling problems: it is harming health, draining wealth from people in the lower ranks of the income distribution, and contributing to economic inequality. These are among the findings of Why Casinos Matter: Thirty-One Evidence-Based Propositions from the Health and Social Sciences, a report released from the Council on Casinos, an independent, nonpartisan group of 33 scholars and public policy leaders convened by the Institute for American Values.

Why Casinos Matter is part of a series of investigations called "Casino Land: America in an Age of Inequality" being conducted by the Institute for American Values and its partners. The goal is to understand the meaning and role of casinos in American life — how they work and what they do, the values they embody and transmit, their impact on civil society, their connection to government, and their relationship to the rise of American inequality.

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1.   Casino gambling has moved from the margins to the mainstream of American life.

Within the lifetime of most Americans, legal casino gambling existed in only two locations in the U.S: Nevada and Atlantic City, N.J. Beginning in the 1990s, casinos spread across the nation at an accelerating pace. Today, 23 states have commercial casinos, a category which includes land-based, riverboat, dockside, and racetrack casinos. In the Northeast and mid-Atlantic states, nearly every adult now lives within a short drive of a casino.

2.   Today’s regional casinos are different from Vegas-style resort casinos.

America’s new regional casinos may be called "resorts" by the gambling industry and "destination resorts" by the political leaders who sponsor them, but they are actually quite different from the resort casinos historically located in Las Vegas, Macau, and other higher-end vacation locales.

Classic destination resort casinos attract customers from across the nation and the globe. Their patrons usually travel long distances to get to the casino, arrive in rental cars, stay in hotels, and spend money on high-end restaurants, elegant shops, and concerts featuring world-class entertainers as well as on gambling.

By contrast, regional casinos attract the great majority of their customers from nearby communities, sometimes including nearby communities across the borders of neighboring states. Their patrons typically travel distances of 70 miles or less, arrive in their own cars or on buses, spend nearly all their time and money gambling at the casino, and return home to sleep in their own beds.

A destination resort casino is a place you might visit once a year. A regional casino is a place you might visit several times a month or several times a week.

The traditional Vegas-style resort casinos catered mainly to high rollers and "whales" partial to table games. Today’s regional casinos cater overwhelmingly to middle rollers and low rollers who play slot machines.

In short, unlike the old Vegas-style resorts, the new regional casinos depend decisively on attracting gamblers who live in the region, who return frequently, and who play modern slot machines.

3.   The new American casino is primarily a facility filled with modern slot machines.

Slot machines have transformed American gambling. In 1978, outside of Nevada, there were virtually no legal slot machines in the United States. In 1991, there were about 184,000. By 2010, there were about 947,000, a more than five-fold increase in less than two decades.

Slot machines and other computerized gambling machines now occupy nearly all of the space on the casino floor. Even traditional table games are likely to be run by a computer.

Slots are highly profitable. In 2013, the percentage of casinos’ total gambling revenue deriving from slot machines is estimated at 62 to 80 percent, with racinos (racetrack casinos) getting 90 percent of their take from slots. As Frank Farenkopf, the recently retired CEO of the American Gaming Association puts it: "It's the slot machine that drives the industry today."

4.    A modern slot machine is a sophisticated computer, engineered to create fast, continuous, and repeat betting.

Many people still think of slot machines as mechanical "one-armed bandits." Players used to sit at these machines with a bucketful of coins; put a coin in a slot; pull a mechanical lever to activate a spin of a single reel; and wait for images of cherries or "7's" to appear on a console screen. And then, they repeated the same motions again and again, waiting for a flood of nickels or quarters to pour out of the machine for a win.

Modern slot machines are entirely different. They are programmed for fast, continuous, and repeat betting. Players insert plastic, not coins; they tap buttons or touch a screen rather than pull levers; they place bets in denominations ranging from a penny to a hundred dollars on multiple lines that spin across a screen with each rapid tap of the button. An electronic counter on the console tallies credits for wins and losses. All of this happens at a blindingly fast speed. Even penny bets on multiple lines with each spin can result in large losses.

Modern slots are hooked up to a central server that collects player information, preferences, and speed of play and has the capacity to program each machine to each player's style. In short, the laws of pure chance or probability no longer dictate wins and losses. The modern slot experience is deliberately engineered to take in much more than it pays out.

5.   Modern slot machines are carefully designed to ensure that the longer you play, the more you lose.

Slot machines are designed to get players to gamble longer and lose more over time, or, in the lingo of the trade, to boost REVPAC—revenue per available customer. According to MIT anthropologist Natasha Schull, who has done an exhaustive study of slot machine design, the trend in slot design is to provide a slow and smooth "ride," with small wins that are less than the amount bet, but nonetheless encourage repeat bets and prolonged "time on machine." This experience is especially appealing to low rollers. It gives them small rewards along the way and a sense of winning but ensures that they gradually lose more than they ever win.

6.   Modern slot machines are highly addictive.

Studies consistently find that people who play slots as their primary form of gambling are more likely to become problem gamblers. According to one well-designed study, they are also likely to experience more rapid onset of gambling addiction than people who engage in more traditional forms of gambling. Moreover, this study, which controlled for subjects' personality traits, emotional problems, or substance abuse, concluded that the machines themselves were responsible for the gamblers' addiction, not the gamblers' personal traits or pre-existing conditions. In Australia, where machine gambling is endemic, a recent study by the government found that 16 percent of people who play weekly on the machines are problem gamblers while an additional 15 percent are at moderate risk for a gambling problem. These findings may understate the full extent of harms from gambling machines. Nearly half of individuals sitting in front of gambling devices at any one time exhibit "problematic" gambling behaviors.

7.   Modern slot machines are engineered to make players lose track of time and money.

Modern slot machines are highly addictive because they get into people’s heads as well as their wallets. They engineer the psychological experience of being in the "zone"—a trance-like state that numbs feeling and blots out time/space. For some heavy slot players, the goal is not winning money. It's staying in the zone. To maintain this intensely desirable state, players prolong their time on the machine until they run out of money—a phenomenon that people in the industry call "playing to extinction."

8.    Casinos depend on problem gamblers for their revenue base.

Problem gamblers account for 40 to 60 percent of slot machine revenues, according to studies conducted over the past decade or so. This evidence contradicts claims by gambling lobbyists that their industry wants to attract only those customers who play casually "for fun." Indeed, if casinos had to rely on such casual customers, they would not long survive. A Canadian study found that casual players comprised 75 percent of players but contributed only 4 percent of net gambling revenue. The casinos’ real money comes from problem gamblers. (For a full presentation of evidence, see the appendix, "How Much Gambling Revenue Comes from Problem Gamblers?")

9.    Living close to a casino increases the chance of becoming a problem gambler.

Numerous studies show that living close to a casino is a key factor in more frequent gambling. More frequent gambling increases the risk of serious problem gambling. A large-scale study in 2004 found that people who live within 10 miles of a casino have twice the rate of pathological and problem gambling as those who do not. Another study found that the four counties in Nevada with the greatest access to casinos had the highest problem gambling rates while the four counties with the least access had the lowest rate.

Similarly, a British study of casino gamblers found a strong association between frequency of play and problem gambling. Frequent players were twice as likely to be diagnosed as problem or severe problem gamblers compared to those who played infrequently (14.8 percent of frequent players compared to 6.8 percent of infrequent players).

10.  Problem gambling is more widespread than many casino industry leaders claim.

Problem gambling is a technical term used for moderate and severe gambling behavior. It is based on criteria first developed by the American Psychiatric Association in 1980 when the organization included severe or pathological gambling in its Diagnostic and Statistical Manual of Mental Disorders.

However, the nature and extent of problem gambling is far from a settled question. Estimates of problem gambling vary greatly depending on the criteria used, the measuring instruments employed, and populations studied. Moreover, researchers disagree over where to draw the line between moderate and severe gambling problems and which of the twenty different screening questionnaires offer the most reliable measure of a gambling disorder.

What can be said with confidence is that the prevalence of problem gambling has increased significantly in the period of rapid casino expansion since 1993. In some states, the rate of problem gambling rises three to four-fold after the initial adoption of a casino before leveling off at this higher level or declining modestly.

Yet the gambling industry minimizes the harm. It claims that problem gambling affects an insignificant one percent of the population and that this proportion remains the same even as more Americans have easy access to nearby gambling venues.

Many scholars have criticized the one percent figure as misleading. It is based on a survey of the general adult population—a significant proportion of whom do not gamble at all. Moreover, it counts only the most severe form of problem gambling—typically people who exhibit three or more clinical symptoms used in the scoring diagnosis of mental health disorders. It excludes gamblers who have less severe gambling problems and people whose lives and livelihoods may be adversely affected by their gambling but who do not meet any of the criteria of a mental health diagnosis.

A better measure is the percentage of problem gamblers among only those who actually gamble. Still better is the percentage of problem gamblers among people who gamble frequently. Estimates of the percentage of frequent gamblers who are also problem gamblers range from fifteen to twenty percent. Among frequent gamblers who bet exclusively on slots, video lottery terminals, and other continuous electronic gambling machines, rates of problem gambling can be even higher. Lastly, one might want to look at specific vulnerable subpopulations, such as Asian-Americans and the elderly, who are catered to by the gambling industry and are at high risk for gambling problems.

11.  Problem gambling affects families and communities as well as individuals.

Clinical and other observational studies confirm what common sense tells us: problem gamblers hurt their families as well as themselves. The compulsion to gamble leads to financial hardships: burdensome debt, loan defaults, and fraud; excessive payday borrowing; bankruptcy; loss of a business or home; and sometimes total destitution. Gambling destroys bonds of trust. Problem gamblers hide and lie about their gambling debts. They borrow or steal from family members, including children. They spend their time at the casino rather than at home.

Spouses are harassed by bill collectors and suffer a wide range of stressrelated physical and mental problems; they attempt suicide at three times the rate of the general population. Women in such situations are at higher risk for domestic violence. A study of members of Gamblers Anonymous found that upwards of 26 percent have gambling-related divorces or separations.

The harms to children are persistent and wide-ranging. They include financial insecurity, parental neglect, and pervasive feelings of abandonment. Some children have spent hours alone in parked cars or unattended at home while their parents gamble in the casino. Others have lost money, homes, holidays, and the chance to go to college, due to parents' gambling problems.

It is especially worrisome that more women, typically the primary caregivers, are joining the ranks of slots gamblers.

12.  Young people are viewed as the future of casino gambling.

A recent American Gaming Association survey of casino visitors ages 21- 35 found that young people had the highest rate of casino visitation and the greatest level of acceptance of casino gambling among all casino visitors. Nearly 4 out of 10 (39 percent) had gone to a casino in the past year, and 9 out of 10 agreed that casino gambling was acceptable for themselves and others. Machine gambling was ranked as the most popular game among young adults. Frank Fahrenkopf of the American Gaming Association highlighted this news in a 2013 industry report, stating that young people are "the very people with whom the future of our business lies."

That future is not far off. More than any earlier generation, today’s young people are technologically primed for gambling. From an early age, kids learn to play games by tapping buttons and tracking images on screens. They spend money with a swipe of a debit card. They play video games. They live on social media. For these reasons, young people are a soft target for Internet gambling—the next frontier for legalized gambling.

The first national U.S. survey of gambling among adolescents and young adults found that gambling among youth is widespread. It estimates that three-quarters of a million young people ages 14-21 are already problem gamblers.

13.  Working in a casino appears to increase workers’ chances of having gambling problems.

Casino workers are at increased risk for gambling problems compared to service workers in non-gambling businesses. One study of casino workers in Mississippi found that over half of the subjects reported present or past problems with gambling addiction.

In New Jersey, eight percent of calls to the gambling help hotline came from casino employees, according to testimony by Sheila Wexler, then Executive Director of the Council on Compulsive Gambling in the state. “The problem exists at all levels of employment” she said and includes behavior such as erratic work performance, borrowing money from coworkers or customers, absenteeism, tardiness, theft, embezzlement, and health problems.

14.  Working in a casino appears to increase workers’ chances of having health problems.

An American casino typically operates 24 hours a day, seven days a week, 365 days a year. Its work force consists largely of shift workers who serve food and drink, provide security, and clean the facility. Life as a shift worker in a casino poses a number of hazards to workers’ health. To begin, there are physical and social disruptions. Shift work negatively affects sleeping and eating patterns, dating and family relationships, childcare, stress, and other health outcomes. Next there is the work environment itself. Like bartenders, casino workers are more likely to have problems with alcohol than other service workers. (Keep in mind that bars do not offer free alcohol, as many casinos do.) Smoking is permitted in many casinos, and workers are subject to the known health risks of breathing secondhand smoke—a hazard now rare everywhere except in casinos.

15.  The benefits of casinos are short-term and easy to measure while many of their costs are longer-term and harder to measure.

Impact studies measure short-term economic benefits of a prospective casino but they typically fail to measure longer-term social costs. Social costs tend to emerge over time and therefore are harder to quantify. As a consequence, policy makers may overlook or underestimate the social costs of gambling.

For example: Evidence suggests that the opening of a new regional casino may offer an economic stimulus to distressed communities, but the stimulus fades over time, as the presence of a casino drives out established local businesses and attracts other gambling-linked businesses, such as payday lenders, pawn shops, auto title lenders, and check cashing stores.

Witness Atlantic City as a case in point. Casinos in Atlantic City began as an economic renewal project, but after nearly four decades, the city is still in need of economic renewal. Despite repeated bailouts by the state and a recent $30 million state-funded marketing campaign, Atlantic City remains an economically troubled place.

Atlantic City is not a unique case. A study that looked at the spread of casino gambling in 300 Metropolitan Statistical Areas found that the presence of a casino reduces voluntarism, civic participation, family stability, and other forms of social capital within 15 miles of a community where it is located.

Likewise, problem gambling is hard to spot in the short-term. It takes a long period of mounting financial and family troubles—estimated at four to seven years—before a gambler admits to a problem. It takes even longer for a problem gambler to feel desperate enough to seek help. And since most gamblers who seek help turn to Gamblers Anonymous, a fellowship organization that does not provide statistics on its members, it is nearly impossible to get a complete picture of the total number of those who seek treatment. Finally, many problem gamblers show up in other statistics—bankruptcy, unemployment, divorce, embezzlement, overindebtedness—where the causal relationship between gambling problems and other problems is harder to establish.

That said, a 2004 study estimated the social costs of problem gambling associated with a new casino between $2,486 and $2,945 per problem gambler and $5,143 to $10,330 per additional pathological gambler (the most severe form of problem gambling). An earlier 1996 study of problem gambling among members of Gamblers Anonymous looked at employment-related social costs—working hours lost, unemployment compensation, and foregone income due to gambling—and found an annual cost of $2,836 per casino gambler, or $4,062 in 2013 dollars.

16.  Casinos extract wealth from communities.

Regional casinos build their customer base by encouraging repeat visits from local residents with incentives like “free” play and player loyalty rewards. Repeat players spend dollars in a casino that would otherwise be spent somewhere else in the local economy. Investor profits are extracted from the local market area, contributing to the long-term flow out of the community. Thus, the fundamental economic dynamic of a regional casino is taking dollars out of the community, not bringing dollars into the community.

17.  Casinos typically weaken nearby businesses.

Casinos attract customers with "perks" such as free transportation, parking, food, and alcohol, not to mention the come-on of hitting the jackpot and dreams come true. These realities make it harder for local businesses to compete with casinos. Some eventually go out of business.

Consider what has happened in Atlantic City: Before 1977 there were 242 eating and drinking establishments in Atlantic City. In 1981 (3 years after casinos began operating, the number had declined to 160, and by 1996 (19 years after casinos began operating) the number had declined to 142. A 2007 Federal Reserve study found that even after 20 years of so-called economic development, there is still no large supermarket in the city.

Casinos enjoy another competitive advantage over local businesses. They are given a regional monopoly by the state and gain special legislative exemptions from regulations imposed on non-casino businesses. In the Commonwealth of Massachusetts, for example, the state legislature permits three newly authorized regional casinos to give free alcohol to customers but bans local bars from offering heavily discounted alcoholic beverages for "happy hour" promotions. Other states allow smoking in casinos but ban it in local restaurants and bars.

There appears to be at least one exception to the rule that casinos tend to weaken nearby businesses. Regional casinos do seem to promote the flourishing of nearby pawn shops, check-cashing operations, and highinterest lending establishments such as payday lenders. For example, a recent study of Mississippi Gulf Coast casinos reports: "All of the law enforcement officials also noted that the number of pawn shops and 'check-cashing' businesses on the Coast has exploded since the advent of gambling."

18.  Casinos typically hurt property values in host communities.

A recently released study by the National Association of Realtors says the impact of a prospective casino on the local housing market is "unambiguously negative." The research conducted for realtors in western Massachusetts, where a new regional casino is slated for construction, found that homeowners in the host community would experience from $1,650 to $3,300 in lost value. The study's economists estimate that there will also be 125 additional home foreclosures each year, representing $5 million in lost home values.

19.  Casinos are the creation of state government and its public policies.

Casinos are often described as public-private partnerships between government and the gambling industry. (Kansas is an exception: its three casinos are owned solely by the state.)

However, the new casinos cannot be viewed as just another kind of public-private partnership. They are instituted by the states to create a source of revenue separate from direct taxation, the traditional way of financing government expenses for the common welfare. States typically legalize casino gambling by changing state constitutions. They create regional monopolies for the casinos. They regulate lightly and often in ways that discriminate against other legal businesses. They promote casino gambling through advertising and advocacy by public officials. They tell the public that casinos provide funds for necessary government services without raising taxes. They rescue casinos from bankruptcy. In short, without the legal, administrative, regulatory, and promotional advantages provided by state governments, casinos would not be spreading into mainstream American life as they are today and would likely still exist only on the fringes of the society.

20.  State regulation of casinos creates a conflict of interest, in which the state is charged with protecting the public from the very business practices that generate revenue for the state and which the state is co-sponsoring.

State governments are caught in a classic conflict of interest between their desire for more revenues and their responsibility to prevent harms to the public from unfair or exploitative practices.

Many have resolved the conflict in favor of more revenues from casinos. This decision is a violation of the precautionary principle, which holds that government must engage in due diligence before introducing a policy that might harm its citizens, even when the evidence of harm is not definitive. Yet in the case of casino gambling, there is clear evidence of harm, and that fact alone is sufficient reason to require a moratorium on state-sponsored gambling expansion. In fact, a moratorium was the main recommendation of the 1999 federally-funded report from the National Gambling Impact Study Commission. But since that time, states have raced ahead to locate commercial casinos in struggling communities and to extract revenues from citizens in those communities.

21.  States are typically failing to protect their citizens from the harms of state-sponsored casino gambling.

Since the late 1990s, federal and state commissions have recommended policies to protect citizens from the harms of state-sponsored casino gambling. These "best practices" policies are designed to hold the producers of gambling—the states and their partners in the gambling industry— responsible for its serious harms. However, few if any states have actually adopted or implemented these "best practices." They include:

• Prohibiting gambling advertising, as is the case with cigarette advertising.
• Modifying the machine design to reduce speed and duration of play.
• Removing ATMs and credit facilities from the casinos.
• Requiring breaks/cooling-off periods in machine play.
• Prohibiting free alcohol on the casino floor.
• Displaying onscreen clocks on the machines.
• Prohibiting casino lending on credit.
• Establishing an independently funded National Institute on Problem Gambling to conduct research and public education.

22.  States are typically failing to provide adequate help for the treatment of problem and compulsive gambling.

Most state assistance is seriously underfunded (generally one-half to one percent of casino revenues) and mainly limited to directing people to self-help information: 1-800 numbers; contact information for Gamblers Anonymous; and website addresses for state councils on problem gambling. Except for Gam-Anon, a support group for families of compulsive gamblers, there are very few resources available for children, spouses, and other affected family members. State councils receive a significant share of their funding from state gambling revenues and therefore are constrained from serving as independent advocates for more aggressive efforts to fund and treat gambling addiction, or to prevent the further spread of casinos in the first place.

23.  Some states are propping up failing casinos.

Like big banks, state-sponsored casinos are not allowed to fail. When casinos come up short, states usually provide new infusions of money, reduced taxes, reduced funding for gambling addiction measures, or other concessions such as lifting smoking bans, in order to sustain revenues and profitability. Rhode Island, Delaware, and New Jersey have all taken special steps to help casinos that might otherwise fail.

24.  Over time, casino expansion within a state and in nearby states can create a downward economic spiral of market saturation, sluggish state revenues, and failing casinos, marked by an ever-growing competition in which each state tries to lure other states' citizens into its casinos.

New England and the mid-Atlantic states are already crowded with casinos. Nonetheless, they continue to wage casino border wars. Massachusetts has approved three new casinos and a slot parlor to compete against Connecticut's two Indian casinos. Rhode Island is adding table games to draw customers to Twin Rivers, a slot parlor just across the border from Massachusetts. New Hampshire’s governor recently lost her fight to build a casino just over the Massachusetts border, but she is expected to try again.

Meanwhile, New York, which straddles both New England and the mid- Atlantic states, is seeking to capture business across borders by legalizing new regional casinos in upstate New York. If approved, the new casinos will be added to the eight Indian casinos and nine racetrack casinos already established in the state.

It's a similar story in the mid-Atlantic states. Pennsylvania has twelve casinos; Maryland has four; New Jersey’s Atlantic City has twelve; and tiny Delaware, struggling to compete with its three casinos, has just approved Internet gambling. The competition is likely to get even more brutal in the coming years. A new Baltimore-based casino is planned for 2014 and there are tentative plans for casinos in Philadelphia and Maryland’s National Harbor area in 2016

Casinos may begin by making lots of money for the state government, but the economic dynamics over time tend to become increasingly negative and zero-sum, as politicians try to solve the problem of sagging gambling revenues by sponsoring more gambling, and as every state tries harder and harder to poach gamblers from other states.

25.  Regional casinos are a regressive source of revenue for the states.

Casino gambling was once a largely upper-class activity. As a classic 1977 study argued, revenues from casino gambling came disproportionately from well-off Americans who could travel long distances to a resort casino and gamble money they could afford to lose. At the same time, however, the study’s author speculated that casino gambling would become more regressive as it became more widespread. That’s exactly what has happened.

With the spread of regional casinos into economically struggling communities, more working and middle class people are drawn to casino gambling. In the past, such residents may have gambled on the lottery, but few have had the time or money to travel to a far-away resort casino. With the arrival of a nearby casino, however, residents gain easy access to a gambling venue. Easy access increases local participation and drains dollars from local residents into the state’s coffers.

As a consequence, women, low-wage workers, and retirees are contributing a disproportionate share of states’ take of casino revenues. As states become ever more dependent on casino revenues as a substitute for more progressive sources of revenue, they are trapped into a regressive policy of taking from the less affluent and rewarding the more affluent.

26.  Research on gambling in America is largely funded by the gambling industry.

The American Gaming Association (AGA), the lobby for the gambling industry, created the National Center for Responsible Gaming (NCRG) in 1996 to provide industry-funded research on gambling addiction and to influence the findings of the federally funded National Gambling Impact Study Commission that was soon to begin its multiyear investigation.

Founding AGA president Frank Fahrenkopf made the strategic decision to establish the industry’s own research arm after playing golf with a close friend who had run the Tobacco Institute. As he tells it, "I had seen the problems his industry had run into by denying the harmful effects of smoking. We knew that problem gambling was something we had to handle, and it was the subject matter of our first board meeting."

NCRG is now the largest and only private source of funding for sciencebased research on gambling and health in the U.S. over the past century. It is funding $950,000 in research grants in 2013, including multiyear funding for Centers of Excellence in Gambling Research at Yale, the University of Minnesota, and the University of Chicago. The industry funding devoted to research is, of course, a miniscule amount compared to the profits the industry rakes in.

27.  Research on gambling funded by the gambling industry focuses overwhelmingly on the individual pathology and pharmacology of gambling addiction while avoiding research into machine design, player profiling, and other industry practices and technological innovations that foster gambling addiction.

The National Center for Responsible Gaming, the gambling industry's research arm, states that it funds peer-reviewed, independent research on gambling addiction. However, its research funding and agenda is largely devoted to scientific investigations into the biology of pathological gambling, including its diagnosis and treatment. Of the 200 peer-reviewed studies it has funded, not a single one investigates the interplay between gamblers and the gambling machines; the addictive nature of modern gambling machines; or the industry's own research into designing more addictive machines.

28.  State sponsorship of casinos is a policy contributing to patterns of inequality in America.

As gambling has spread into economically distressed communities, it has drawn more Americans in the lower ranks of the income distribution into its venues. Low-income workers, retirees, minorities, and the disabled include disproportionately large shares of regional casino patrons.

In this way, state-sponsored casino gambling creates a stratified pattern that parallels the separate and unequal life patterns in education, marriage, work, and play that increasingly divide America into haves and have-nots. Those in the upper ranks of the income distribution rarely, if ever, make it a weekly habit to gamble at the local casino. Those in the lower ranks of the income distribution often do. Those in the upper ranks rarely, if ever, contribute a large share of their income to the state’s take of casino revenues. Those in the lower ranks do.

29.  State sponsorship of casinos raises troubling ethical questions about fairness and equal treatment of citizens.

State sponsorship of casinos is one of the most successful bipartisan public policies in today’s politically polarized culture. Both Republicans and Democrats, red states and blue states, Mississippi and Massachusetts, have pursued and promoted casino gambling as a revenue- producing policy. Few have paused to ask questions about the ethics of such a policy:

• Does state-sponsored gambling serve the greater public good?
  
  
• Does it help to reduce social and economic inequality?
  
  
• Does it produce things of lasting value that we can all be proud of?
  
  
• Does it support the idea, considered by many thinkers to be essential in a democracy, that what happens to us depends more on what we do than on whether we are lucky?
  
  
• Does it build our human, social, or moral capital?
  
  
• Does it hurt people? Is it fair?
  
  

These are not simply narrow questions about the morality of gambling, as some say dismissively. These are broad and important questions about a major new American institution. We must consider these questions seriously, because how we answer them will help determine the degree to which we can build a just society and establish a trustworthy relationship between the government and the governed.

30.  Encouraging people to put their money into slot machines has historically been viewed as unethical.

The fundamental dishonesty inherent in slot machines is that, notwithstanding the casinos' messages to the contrary, the machines are programmed to guarantee that the casino wins. While some individual spins do pay off, no steady player has ever, or will ever, win money by playing slot machines. The steady player's loss is a mathematical certainty. That's why former New York City mayor Fiorello La Guardia called the machines "mechanical pickpockets" and distributed brochures across the city entitled “You Can't Win at the Slot Machine Racket." Because you can't.

Some people believe that operating slot machines has historically been viewed as dishonest because it was illegal. That is partly true. But the larger truth is that operating slot machines has historically been treated as illegal because it is dishonest. Enticing people who may be vulnerable or unwary to lose their money by betting against a machine that has been programmed in advance to take their money has not, in the American experience, been generally viewed as an honest thing to do— an ethical problem that becomes even more serious when the government is actively involved in the enticing.

31.  Encouraging legal gambling as "fun" entertainment and an all-American pastime is a historically new development.

The promotion of gambling as a "fun" entertainment choice has emerged as the result of two converging forces: the states’ partnership with gambling interests to raise revenues that are not considered new taxes; and the redefinition of excessive gambling as a mental disorder affecting only a small percentage of the potential gambling population.

Throughout our history, gambling itself was regarded as a problem for the entire society. It led to crime and corruption. It harmed families, finances, and reputations. It undermined middle class values of work, thrift, and deferred gratification. That’s why it was illegal almost everywhere. But in 1980, in what was a watershed moment, gambling was defined in the Diagnostic and Statistical Manual of Mental Disorders of the American Psychiatric Association as a specific problem for those individuals uniquely susceptible to its appeal.

This medicalization of society’s understanding of gambling has had social, political, and public policy consequences that are both profound and troubling. One consequence is that the new understanding purports to divide the American public into two separate and unequal groups: on one side is the great majority of the population who can enjoy gambling as healthy fun; and on the other side is a small clinical population that fits the specific diagnostic criteria of gambling addiction.

A second consequence is that the gambling lobby has used the new definition of gambling to promote the idea that the harms of gambling are limited and manageable and that the gambling industry itself – the producer of the harms—is also the best source of research and investigation into limiting those harms.

A third consequence is that the redefinition of gambling exempts states from their traditional public health responsibility to prevent the known harms of gambling and, instead, allows government to shift responsibility for treatment onto the gambler herself and onto mental health professionals.

EVIDENCE FROM THE HEALTH AND SOCIAL SCIENCES suggests that the new American casinos are associated with a range of negative health, economic, political, intellectual, and social outcomes. For this reason, we view state sponsorship of casino gambling as a regressive and damaging policy.