Study: Adding casinos bad bet
NYC think tank's new report says problem gamblers will pay freight if state expands outlets
By James M. Odato
Updated 6:30 am, Monday, October 7, 2013
Times Union photo by STEVE JACOBS, 1/29/04, Saratoga Springs,NY-- GAMING CASINO -- The VLT machines at the Saratoga Gaming Raceway that helped raise millions of dollars on opening day that was January 28,2004 ( for story)
Few things are clear about the expansion of casinos in New York, but additional slot machines will add significantly to problem gambling and may not be economically rewarding for the state, according to a fresh study by the Institute for American Values.
The Manhattan-based think tank, which had its work approved by a host of university scholars and academics, chose not to rely on data from the American Gaming Association, the industry lobbying organization. The AGA regularly funds studies on gambling addiction through its National Center for Responsible Gaming. The AGA sharply discredits the institute study.
"They believe their values are better than others," said Geoff Freeman, president of the AGA.
"They're trying to throw the baby out with the bath water."
The institute's new report, "Why Casinos Matter," is based on several government and academic studies here and abroad. The authors arrived at several conclusions:
The new American casino is mostly a center filled with slot machines — essentially sophisticated computers designed to addict players. The machines figure out betting patterns and provide just enough in rewards to keep a person hooked for hours. "The more you play, the more you lose," the report says, backing up the statement with findings by MIT anthropologist Natasha Schull. Schull details her observations in the 2012 book "Addiction by Design: Machine Gambling in Las Vegas."
Modern slot machines "engineer the psychological experience of being in the 'zone' — a trancelike state that numbs feeling and blots out time/space. For some heavy slot players, the goal is not winning money," the study said.
Casinos depend on problem gamblers for their revenue base, drawing 40 to 60 percent of slot machine revenues from these people, many of whom are low rollers.
Living near a casino or working at a casino increases the chance of becoming problem gambler.
Those who live within 10 miles of a casino are twice as likely to be a problem gambler than those who do not.
Problem gambling is more widespread than many casino industry leaders claim. The problem gamblers frequently go to a casino, and their lives and livelihoods may be adversely affected by their betting. They are not necessarily the heavy gamblers who are pathological and who suffer from increasing preoccupations to gamble and a loss of control.
The benefits of casinos are short-term and easy to measure, but many costs pop up during the longer term that are harder to quantify. Economic stimulus fades after the casino becomes a dominant business that drives out established local businesses, such as restaurants, replacing them with pawnshops, auto title lenders and check-cashing stores. And since problem gambling develops over four to seven years, the stress on families and finances may gradually become apparent.
State regulation of casinos creates a conflict of interest. Government is supposed to protect people from harmful business practices, but the state is a partner with casinos or is co-sponsoring gambling.
In New York, the Cuomo administration announced last week that it anticipates $430 million a year in annual revenues — $192 million for local governments and $238 million for schools or property tax relief — from four new upstate casinos. The New York Division of the Lottery reported almost $9 billion in revenues last year, a record, with more than $3 billion of that going to public education.
The institute says it is not biased. But Institute President David Blankenhorn has agreed to argue against the casino expansion on the November ballot in a debate scheduled for Oct. 16 at Syracuse University's Maxwell School. He said he has heard state leaders talk about the economic benefits of casinos, and gaming representatives talk about the small number of the customers with gambling problems. "These findings show a lot of it is just rhetoric," Blankenhorn said.
"'Why Casinos Matter' is definitely a response to some of the pro-casino argument," said Barbara Dafoe Whitehead, the chief author. She said a problem she encountered in doing her report is that New York government does not know how many problem gamblers there are in the state. Plus, the state needs data on the demographics of the regions where casinos may be built. "The state should be doing that (research)," she said. "It's a weakness on information available so people can do the research and inform the public."
State analysis is dated: New York's Office of Alcohol and Substance Abuse Services reported in 2007 that about 5 percent of 5,100 adults it surveyed experienced problem gambling in 2006 and may be in need of treatment services. OASAS also reported in 2007 that 10 percent of students in grades 7 through 12, roughly 140,000, experienced problem gambling in 2006. Another 10 percent, or an additional 140,000, indicated that they may be at risk of developing problem gambling.
The American Gaming Association's Freeman said the institute's conclusions are based on tired arguments and inaccuracies. He said many communities benefit markedly from casinos, such as Bethlehem, Pa., Kansas City, Mo. and French Lick, Ind. He said he had not read Schull's book on slot machine engineering, but that all technology has evolved. He said just 1 percent of the population have pathological addictions and that the other 99 percent should have the "entertainment they desire." The AGA's research points to 2 percent to 3 percent of the adult population having gambling problems.
Freeman was not able to estimate how much of the revenues of casinos come from problem gamblers.
It would be in the billions, based on the institute's estimates. In 2012 nationwide, tribal casinos collected $27.9 billion and commercial casinos accounted for $38.3 billion.
Freeman said his members, which include Resorts World Casino at Aqueduct Race Track, report that most of the casino revenues are from "whales" — big gamblers who can afford their spending. He said the average debt of a pathological gambler isn't enormous: about $5,000. The industry focuses its marketing on people who can afford and enjoy the experience, he said.
The institute described people driven toward "playing to extinction," or until they're broke.
"What's wrong with this is that the Institute for American Values (is) saying what American values are," Freeman said. "They leave no stone unturned trying to lay blame on the feet of casinos."
http://www.timesunion.com/local/article/Study-Adding-casinos-bad-bet-4874319.php
The Manhattan-based think tank, which had its work approved by a host of university scholars and academics, chose not to rely on data from the American Gaming Association, the industry lobbying organization. The AGA regularly funds studies on gambling addiction through its National Center for Responsible Gaming. The AGA sharply discredits the institute study.
"They believe their values are better than others," said Geoff Freeman, president of the AGA.
"They're trying to throw the baby out with the bath water."
The institute's new report, "Why Casinos Matter," is based on several government and academic studies here and abroad. The authors arrived at several conclusions:
The new American casino is mostly a center filled with slot machines — essentially sophisticated computers designed to addict players. The machines figure out betting patterns and provide just enough in rewards to keep a person hooked for hours. "The more you play, the more you lose," the report says, backing up the statement with findings by MIT anthropologist Natasha Schull. Schull details her observations in the 2012 book "Addiction by Design: Machine Gambling in Las Vegas."
Modern slot machines "engineer the psychological experience of being in the 'zone' — a trancelike state that numbs feeling and blots out time/space. For some heavy slot players, the goal is not winning money," the study said.
Casinos depend on problem gamblers for their revenue base, drawing 40 to 60 percent of slot machine revenues from these people, many of whom are low rollers.
Living near a casino or working at a casino increases the chance of becoming problem gambler.
Those who live within 10 miles of a casino are twice as likely to be a problem gambler than those who do not.
Problem gambling is more widespread than many casino industry leaders claim. The problem gamblers frequently go to a casino, and their lives and livelihoods may be adversely affected by their betting. They are not necessarily the heavy gamblers who are pathological and who suffer from increasing preoccupations to gamble and a loss of control.
The benefits of casinos are short-term and easy to measure, but many costs pop up during the longer term that are harder to quantify. Economic stimulus fades after the casino becomes a dominant business that drives out established local businesses, such as restaurants, replacing them with pawnshops, auto title lenders and check-cashing stores. And since problem gambling develops over four to seven years, the stress on families and finances may gradually become apparent.
State regulation of casinos creates a conflict of interest. Government is supposed to protect people from harmful business practices, but the state is a partner with casinos or is co-sponsoring gambling.
In New York, the Cuomo administration announced last week that it anticipates $430 million a year in annual revenues — $192 million for local governments and $238 million for schools or property tax relief — from four new upstate casinos. The New York Division of the Lottery reported almost $9 billion in revenues last year, a record, with more than $3 billion of that going to public education.
The institute says it is not biased. But Institute President David Blankenhorn has agreed to argue against the casino expansion on the November ballot in a debate scheduled for Oct. 16 at Syracuse University's Maxwell School. He said he has heard state leaders talk about the economic benefits of casinos, and gaming representatives talk about the small number of the customers with gambling problems. "These findings show a lot of it is just rhetoric," Blankenhorn said.
"'Why Casinos Matter' is definitely a response to some of the pro-casino argument," said Barbara Dafoe Whitehead, the chief author. She said a problem she encountered in doing her report is that New York government does not know how many problem gamblers there are in the state. Plus, the state needs data on the demographics of the regions where casinos may be built. "The state should be doing that (research)," she said. "It's a weakness on information available so people can do the research and inform the public."
State analysis is dated: New York's Office of Alcohol and Substance Abuse Services reported in 2007 that about 5 percent of 5,100 adults it surveyed experienced problem gambling in 2006 and may be in need of treatment services. OASAS also reported in 2007 that 10 percent of students in grades 7 through 12, roughly 140,000, experienced problem gambling in 2006. Another 10 percent, or an additional 140,000, indicated that they may be at risk of developing problem gambling.
The American Gaming Association's Freeman said the institute's conclusions are based on tired arguments and inaccuracies. He said many communities benefit markedly from casinos, such as Bethlehem, Pa., Kansas City, Mo. and French Lick, Ind. He said he had not read Schull's book on slot machine engineering, but that all technology has evolved. He said just 1 percent of the population have pathological addictions and that the other 99 percent should have the "entertainment they desire." The AGA's research points to 2 percent to 3 percent of the adult population having gambling problems.
Freeman was not able to estimate how much of the revenues of casinos come from problem gamblers.
It would be in the billions, based on the institute's estimates. In 2012 nationwide, tribal casinos collected $27.9 billion and commercial casinos accounted for $38.3 billion.
Freeman said his members, which include Resorts World Casino at Aqueduct Race Track, report that most of the casino revenues are from "whales" — big gamblers who can afford their spending. He said the average debt of a pathological gambler isn't enormous: about $5,000. The industry focuses its marketing on people who can afford and enjoy the experience, he said.
The institute described people driven toward "playing to extinction," or until they're broke.
"What's wrong with this is that the Institute for American Values (is) saying what American values are," Freeman said. "They leave no stone unturned trying to lay blame on the feet of casinos."
http://www.timesunion.com/local/article/Study-Adding-casinos-bad-bet-4874319.php
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