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Gambling: A Risk Worth Taking

Anti-gambling crusaders don't have a case

Shikha Dalmia
November 4, 2005

Very rarely does reality supply scenarios that neatly capture every dimension of a social issue. But anti-gambling advocates always try to beat these odds.

Pick any article on the subject and it will invariably begin with a story that illustrates every possible ill associated with gambling: A happy man leading a normal life walks into a casino for the first time and � a few years later — he has lost his home, emptied his bank account, divorced his wife, sold his dog, embezzled money from his employer and is contemplating suicide to avoid a jail term.

Yet anecdotes about ruined losers are no more representative of the consequences of gambling than anecdotes about big jack-pot winners.

But the anecdotal methodology suits anti-gambling crusaders who regard any distinctions of degree or kind as subversive of their cause: Gambling is inherently wrong and, therefore, ought to be banned everywhere in all forms: state lottos, casinos, slot machines, race tracks and, their new bugaboo, internet gambling.

That, at least, was the mentality of the anti-gambling foes gathered at a National Coalition Against Legalized Gambling conference in October in Washington D.C. where speaker after speaker accused gambling of breeding exploitation, addiction, crime, suicide, homicide and divorce.

But is this hyperventilating justified?

Take exploitation, for instance: Even the most enthusiastic gambling supporter would concede that there is an element of exploitation in state lottos. Having awarded themselves a monopoly over lottos, states have systematically raised ticket prices, reduced payouts and generally ripped off their customers, a big portion of whom tend to be poor.

On the other hand, casinos, where competition is fierce, treat their customers like kings, often showering them with no-strings-attached, all-paid-for trips with free tokens for any game of choice. You can't accuse them of exploitation. Right.

Wrong.

In the moral universe of gambling opponents, casinos' behavior is even more exploitative. It is designed to hook people on a product that, one speaker at the NCLA conference claimed, is "as addictive as cigarettes." What's more, according to another speaker, some people have a predisposition for gambling because their brains produce more dopamine and serotonin.

A single visit to the casino will turn these genetic suckers into permanent addicts and the casino freebies are all part of a plot to rope the dopes.

But the facts do not support these claims.

Despite the growth of casinos, the number of problem gamblers has hardly budged: The first federal commission on gambling in the 1970s found that 0.77 percent of the U.S. population had a gambling disorder. Three decades later in 1999, the National Gambling Impact Study Commission reported that less than 1 percent of the adult U.S. population had gambling issues. Furthermore, the commission — which, by the way, is no friend of the gambling industry since it supported a moratorium on the expansion of legalized gambling — found no evidence that communities within driving distance of casinos experience a higher incidence of compulsive gambling than others.

But what about crime in casinos?

It is indisputable that the entry of publicly traded companies whose share-holder profits depend on running a reputable business have radically cleaned up the casino industry, extricating it from the hands of Bugsy Segal-type mobsters.

But, gambling foes claim, casinos lead to more "violent crime, juvenile crime, drug- and alcohol-related crime, public corruption, domestic violence — including child abuse — and white-collar crime."

Potentially, every industry contributes to some kind of crime: bars, drunk driving; Hollywood movies, adultery, promiscuity and violence; Disney World, pick pockets. But the accusation that heavy losses by gambling addicts breeds white-collar crime such as embezzlement, forgery and fraud has gained much currency in the mainstream press in recent years.

However, the evidence for this is non-existent as well.

The most comprehensive study examining the impact of casino gambling on white-collar crime, conducted by Professor Jay Albanese, a professor of criminal justice at Virginia Commonwealth University found a net decrease in arrests for white-collar crimes in the largest casino markets from 1988 to 1996.

But such scientific findings don't quell the fears of gambling opponents, they only heighten them. Why? Is it out of some deep-seated fear about people exposing themselves to potential ruin?

Actually, it is the opposite: It is fear of people winning that feeds this moral angst.

When people gamble and win they undercut the old-fashioned virtues of frugality, prudence and hard work — all things that in the puritan mind are necessary for economic growth.

These virtues are not obsolete. But they were never the sole drivers of the capitalist economy. Entrepreneurship and risk-taking were also essential and in the information economy — in which ideas and innovation are the main drivers — they are more essential than ever.

Moreover, not only does a modern, dynamic economy require risk, it lowers the disincentive to risk. It releases capital and opportunities, making it easier for people who lose fortunes to bounce back quickly. In effect, it makes risk less risky.

In the end, it is not the social effects but the ethos of gambling that opponents raised in a more risk-averse, moral universe hate. Yet risk-taking is the great engine of economic growth and the growth of risk-industries — the stock market, venture capitalists and, yes, gambling — is evidence of that.

This is why risk-takers � among whom are gamblers — will inherit the future.

You can bet on it.

Shikha Dalmia is a senior policy analyst at Reason Foundation.


Shikha Dalmia is Senior Analyst


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