The High Price of America's Gambling Addiction


Gambling wasn't a problem for Michael Burke until 1994, when a casino opened near his home. It was only then that he became a compulsive gambler, playing more often and losing larger sums of money.

"I stole my children's college funds. I forged my wife's name on a mortgage agreement for $200,000," says Burke.

The addiction drove the attorney to take funds from his clients' escrow accounts. In 2001, he turned himself in to the state attorney general, and was sentenced to serve 3 to 10 years in prison. "Gamblers will do anything they can to get money to gamble. As long as the gambler has a token, the gambler has hope," says Burke, now the author of Never Enough: One Lawyer's Story of How He Gambled His Career Away.

After 25 years of practicing law, he has no savings. "I owe $1.6 million to my victims. The proceeds of my book go to them," says Burke, who speaks around the country on gambling addiction.

A Public Policy That Creates Addicts

When it comes to severity, America's gambling addiction isn't too far behind the nation's drug problem, and it's growing. In 2007, Americans lost more than $92 billion gambling, about nine times what they lost in 1982, and almost 10 times more than what moviegoers in the U.S. spent on tickets that same year, says Sam Skolnik, author of the newly released book High Stakes: The Rising Cost of America's Gambling Addiction, and a poker player who knows firsthand how gambling can lead to financial problems. In 2005, an estimated 73 million Americans patronized one of the country's 1,200 casinos, card rooms or bingo parlors -- 20 million more than just five years earlier, says Skolnik.

What's fueling the rise? Blame it in part on the economy. "In 2009 and 2010, officials in 37 states pushed for new or expanded gambling in order to bring in more revenue," says Skolnik. You might say the states have gotten addicted to gambling as a partial cure for what ails their local economies. "There are unprecedented budget gaps. Legislators think gambling is a painless revenue stream that is better than raising taxes or making tough budget cuts," says Skolnik. Politicians can sleep at night because they use some of the revenues to fund programs to prevent and treat gambling addiction. "Essentially, they're admitting that they know they are creating a class of gamblers who become addicts. If you know what you're doing creates problems, is this appropriate policy?" asks Skolnik.

Though Skolnik doesn't scoff at the jobs that gambling creates, particularly in the current jobless recovery, he argues it's not an economic panacea. The claims that gambling spurs economic development are more hard-sell than truth. There may be some slight invigoration, but it's hardly a mega-stimulus, he says.

Gambling is as old as the nation, but with the proliferation of casinos, lotteries, slots, sports betting, horse racing, video poker machines available in almost every state, as well as Internet gambling -- which David Sack, addiction specialist and CEO of Promises Treatment Centers calls "the crack cocaine of gambling" -- addiction has increased. Forty-three states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands each sponsor heavily promoted lotteries, says Skolnik.

"The key to addiction is proximity: The more access, the greater the problem. In states that have the lottery, casinos, keno in every bar, and charity poker rooms, the problem is greater," says Burke.

Do the Benefits Outweigh the Costs?

But what's touted as good for the economy can be bad for society, and gambling addiction carries a huge price tag. "When the addiction rate increases, so does the cost to society," says Skolnik: Bankruptcies, burglaries and other crimes, spouse abuse, child neglect and abuse, foreclosures and even suicide. It's said that a single bankruptcy directly effects 17 individuals, and gamblers who commit crimes wind up in prison and out of the workforce. The impact of gambling addiction is wide and deep.

The number to place on those costs is the subject of some debate. In his book Gambling in America, Baylor University professor Earl Grinols estimates that addicted gamblers cost the U.S. between $32.4 billion and $53.8 billion a year -- about $274 per adult annually. The National Council on Problem Gambling offers a lower estimate of $6.7 billion per year. But either number is astounding.

The discrepancy is another reason Skolnik says it's vital to increase funding for problem and pathological gambling research, including, perhaps a federal funding source.

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Skolnik spotlights Las Vegas, where he lived for five years. "Las Vegas is one of the most dysfunctional communities in America, in part, because of legalized gambling," he says. "There are higher rates of addiction, foreclosures, burglary, than elsewhere. Gambling is available even in Kmart and 7-11. Many communities think they want to be like Las Vegas, but you get a lot of negatives, without much economic development."

Any town that permits gambling is destined to see the creation of an underclass that regularly loses its money to a large corporation, says Harlan Platt, economist and professor of finance at Northeastern University.

Money spent on gambling could be used to bolster Americans' paltry retirement accounts, pay for children's college educations, or shore up emergency savings. Even spending it would help the economy, "People could use that money to buy furniture or a car," says Skolnik.

Gambling addiction doesn't just leave behind financial fiascoes; it also produces fractured relationships. "My cousin and I started a small business in 2003 and grew it to $3.5 million in revenues before his gambling addiction brought it to its knees," says David Winter (not his real name). "He had always enjoyed gambling, but the purchase of a new home in 2006 -- with a much larger mortgage payment -- must have flipped a switch. It wasn't until 2010, that we discovered he had developed an online poker addiction that resulted in almost a million dollars being taken out of the business -- money that was supposed to go towards paying state and local tariffs, the FCC, and the IRS for business and personal taxes."

"If he had just taken the money out legitimately, he would have paid off his house. Instead, he lost more than $330,000 to online and table poker games in Las Vegas and Atlantic City and used the rest to travel, buy electronics, and shop. I ended up taking him to court and haven't spoken to him since," says Winter.

Kristy is so disgusted that she no longer discusses casinos with her senior mother who she says is a gambling addict. "You can't imagine what it's like to follow her around for hours while she stops at ATM after ATM to clean out her checking account, or to find out that she lied to a sibling in order to guilt them into giving her money for some bogus bill," says Kristy. "Hard as it is, when she starts talking about being broke, the most I ever offer is $10 or $20, and then only when she has a doctor's appointment."

Profile of a Gambler?

It's an addiction that cuts across ethnicity, age, socioeconomic status and gender. "Everybody has potential," says Skolnik. Internet gambling can be addictive for teens and college students, who can be impulsive and immature, he says. The elderly can have fewer inhibitions, and some research shows that Asians gamble in significantly higher per capita numbers than the general population.

But Steve Burton, program director of Problem Gamblers Health Network of West Virginia, says some risk factors can make people more susceptible: A previous history of addictions/mental illness; a significant life event like divorce, loss of loved one, job loss; an early big win; a history of child abuse or neglect, or a family history of addictions or mental illness.

It's not like poker is more addicting than slots, or even bingo. "Any type of gambling can be addictive," says Burton.

Facing the Issue Head On

Regardless of the damage it can do, the gambling genie is out the bottle. The question now is, what can we do to reduce that damage?

• Get more help for addicts: "Only 26 states have councils on problem gambling, and even fewer have money available for treatment," says Burton. "Some statistics indicate that as much as 30% of gaming revenues come from 3% of gamblers! This is definitely worrisome."

• Avoid denial: Gambling addiction is often referred to as the silent addiction: Many times, no one knows the individual has an issue. Sometimes that even includes the gambler. "As I always say, no matter how much one gambles, there will never be the smell of it on their breath or redness in the eyes," says Burton.

Medical professionals should screen for gambling addiction. Less than 10% of problem gamblers are diagnosed in a primary care setting, says Burton. Answers to two quick questions provide a clue: Have you ever lied to someone important to you about your gambling and have you felt the need to gamble with more and more amounts of money?

• Rethink policies
: Many people can and do gamble responsibly, and the issue of whether they be denied that outlet to protect those who can't is problematic -- and analogous to similar arguments regarding the legality of tobacco, alcohol, marijuana, etc. -- points out psychiatrist David Reiss of DMR Dynamics.

While there may be valid arguments against the government intervening to "protect autonomous adults from themselves," even stronger arguments can be made that policy makers should not actively support and encourage dysfunctional behaviors, says Dr. Reiss.

"I do not find it problematic that policy makers/governments tax gambling, but I find it problematic that government agencies specifically set up gambling facilities and lotteries purely for profit," says Reiss. "Even more problematic is the hiring of advertising agencies who promote government-sponsored gambling, and who very consciously and intentionally create advertisements that entice people and encourage problematic gambling with promotions that advertise the joy of winning the lottery, when the odds are so infinitesimal than anyone seeing the ad will ever have that experience."

Says Skolnik, "Everyone has to be more aware of the social costs of gambling addiction. People are directly impacted in ways that weren't anticipated. Maybe a gambler occasionally goes to the casino, he or she thinks, 'I'm okay, this is no big deal'. But what about all the other gamblers around you?"