GAMBLING'S DEVASTATING EFFECTS... BROKEN LIFE OF CECIL FIELDER

HatTip to Kevin at Wizbang! and SportsBlog for this article. The sad story of Cecil Fielder is a repeated one that is growing with the rapid development of casinos throughout the U.S. I am not blameless since I gamble once in a while and visit casinos about twice a year, but I recognize the adverse effects of casinos on our landscape.

I read a study several years ago, when casinos on American Indian reservations were becoming popular, which discussed some of the negative effects they were having on local communities. From a state or local government perspective, this new source of revenue was suppose to help support education systems, build local infrastructure, create jobs, or whatever other benefits for the citizens of those states and cities. While this might have been the its purpose, the negative costs were rapid increases of personal loan defaults, especially among the lower-income residents who live nearby, bankruptcy rates, and crime. These social costs of gambling have been widely debated (other side funded by casinos?), but in the end there is a conclusion that at least a small percentage of the population is damaged. These are the complusive gamblers.

This is a common dilemma in public policy. In crafting laws and regulations, where do you find the equilibrium between the "good" for one group versus the "bad" for another? And the problem is typically divided between a greater segment of the population versus a small segment that is getting screwed... maybe the middle-class versus the lower-class or maybe white versus black. Here you can look at the gambling issue as a few bad apples spoiling the lot. Why let their problems effect the greater good casinos are doing for the local communities by providing jobs and tax revenues?

Of course opponents cite the problems go beyond a few bad apples, which I agree with, but is the solution to simply eliminate the casinos? What preventive measures can be added to decrease or remove gambling's adverse effects? What checks or procedures can casinos put in place to deal with complusive gamblers? Do casinos actually want to do away with these types of gamblers? What compromises can be reached between the gaming industry and local communities against the growth of gambling? More questions can be generated, but I'll stop here. I don't have the answers now, but this is definitely an issue to keep on eye on in the U.S. and globally. Here some information from a recent study I found online by Ping Wang (Vanderbilt University and NBER), Juin-Jen Chang (Academia Sinica), and Ching-Chong Lai (Academia Sinica):

In the last decade in the United States, commercial casino gaming revenues increased 141%, from $11.2 billion in 1993 to $27.0 billion in 2003. Today in the U.S., there are casinos in approximately 200 counties in 33 states, and gambling is legalized in 48 of the 50 states, among which there are 443 commerical casinos in 11 states. According to the 2004 American Gaming Association Survey, more than one quarter of the U.S. adult population (53.4 million) visited a casino in 2003, making a total of 310 million trips (averaging 5.8 trips per gambler).
...
Casino gambling generates substantial attendant externalities including compulsive addictions, increased drug and alcohol abuse, and the committing of crimes... Grinols of Mustard (2001) find that about 0.77% of the national sample could be classified as compulsive gamblers. Goodman (1995) estimates that each problem gambler costs the government and the private economy $13,200 a year. Similarly, Thompson, Gazel, and Rickman (1995) impute the associated social costs as ranging from between $12,000 and $50,000 per problem gambler. These findings suggest that the social costs associated with casino gambling are substantial.

I can't cite anything now, but I will assume there is a greater rate of complusive gambling among lower-income people. The danger with gambling is that it creates hope. It's a dangerous hope makes people want to risk what little they have to attain dreams that are nearly impossible. Of course this isn't just limited to lower-income brackets, and it sometimes it's just about "winning big" for others. I'm just stating this because it's unfortunate that most casinos are located in lower-income communities.

I know a person in my friend's church that is suffering from this addiction. He has gambled himself into a huge debt, borrowed large sums from friends, lost many relationships, and is trying to dig himself out of this hole. My good friend and his pastor is now trying to help him out and keeps him accountable. I know another pastor who suffered from this problem and became so desparate he tried to borrow money from his youth group kids. Messed up. Lastly, there is a private equity professional I know that has had a gambling problem since his college days. I know a couple people that he's never paid back since their school days. Now he's making a few hundred thousand a year, but his problem has just gotten worse. Now he swings losses in the tens of thousand instead of thousands, but even with his salary he won't be able to cover it. I know one time last year he lost $70,000 in one night. A big problem waiting to unfold.

To my knowledge, none of my friends suffer from a gambling addiction. Some are casual gamblers that go once in a while to a casino, play friendly poker games, or bet in their office March Madness pool. From one perspective, I can take the route of not caring about this issue since it doesn't directly affect me. But it just isn't about my small world. If all we cared about was our small worlds, how can we make this world better? This is a problem that affects the world we live in and will be a growing problem, so at least we should be aware of it.

There is a Korean proverb that states gambling is the only thing that can make a man sell his wife and children. There is a strong truth within these words.