Address to Council by Dr. Fred Bass, Former Vancouver City Councillor, MD, DSc, Consultant in Preventive Medicine. Among his other distinctions Dr. Bass holds a graduate degree from the Harvard School of Public Health.

Mr Mayor and Council,

Thank you for the opportunity to speak.

My trade is that of epidemiologist and tobacco addiction specialist. Epidemiology is the study of the determinants of health and illness in populations. My training in this area was at Harvard and Johns Hopkins.

I am wearing an Alligator Hat today that was given to me by smokers who appreciated learning that what controls their smoking behavior was not their thinking brain but their primitive—amphibian, Alligator Brain—the same part of the brain that controls problem gambling.

One of you asked the first evening, “What proportion of gambling money is spent by problem gamblers?”

That was a brilliant question. As the movie said, “Follow the money!” The lottery folks pleaded ignorance in their response.

The central issue here is not:
“What proportion of people are problem gamblers?”
but
“What proportion of dollars gambled are problem dollars?”

I will use a Solicitor General’s report of March 2003 to answer that question.

In response to “How much do you spend on gambling in an average month?”, the survey respondents told us that
20% spend less than $1 a month
45% spend $1-$10 a month
22% spend $11-$49 a month
6% spend $50-$99 a month
3% spend $100 to $199 a month and another
3% spend $200 or more

With the modest assumption that the $200 or more group spend $300 per month, we can answer the question what proportion of $ gambled comes from what proportion of the population.

The answer is that a bit over 50% ($1350 of $2695) of the money gambled came from 6% of those who gambled, which is 4.5% of the total population.

Coincidentally, the prevalence of problem gambling that year (2002) was estimated to be 4.6% of the total population.

This study also found that casino gamblers had a significantly higher proportion of problem gamblers 8.8% instead of 4.6% overall average. That’s almost twice the average prevalence.
Casinos appear to attract and/or produce problem gamblers.

In this room 25 years ago, when I was advocating for smoke-free pubs and restaurants, many union employees in the hospitality industry appeared as delegations to argue that smoke-free by-laws would ruin their jobs and their lives. You have heard similar statements from many casino employees.

Some strong words now: Like the tobacco industry, the casino industry is a parasitic industry. Gambling is not sustainable: witness their return, asking for gambling expansion just five years after their previous injection of a casino.

I believe the public, for the most part, has intuitively recognized that expanding slots from 600 to 1500 and gaming tables from 75 to 150 would not be good for this city.

My advice for those seeking re-election this fall is to reject expansion of the casino.

Respectfully,

Frederic Bass, MD, DSc

Vancouver needs a new museum. Here is why a museum, not a casino, is the future:

The Guggenheim museum in Bilbao, Spain designed by Frank Gehry (a Canadian architect) has been attracting around 800,000 visitors per year since its opening, and 82% came EXCLUSIVELY for the museum.

The economic impact in 2001 was estimated around $150 million. It brought about 25 millions in taxes equivalent to about 4,415 jobs.

Visitors spent about $43 millions in accommodation, $35 millions in catering, $13 millions in shopping, $9.5 millions in transports and $6.6 million in leisure (numbers from Forbes).

The Bilbao museum is one of the top attractions in Spain.

The Bilbao museum cost about $190 millions in 2010 dollars ($100 millions to build in 1997 plus $20 millions endowment).

The Frank Gehry Guggenheim museum does not generate addiction that destroys individuals and their family.
The Frank Gehry Guggenheim museum does not support organised crime.
The Frank Gehry Guggenheim museum construction cost less than 1/2 of the planned casino.

Vancouver will not become a world class city with a giant casino. Who believes Nice (France), Las Vegas (US), Macao (China) are world class cities? Only those who encourage greed as a driver of human behaviour rather than culture and knowledge.

Dominique Gross is Professor at the School of Public Policy, Simon Fraser University. She has a Ph.D. in Economics from the University of Toronto and has also worked for the International Monetary Fund (IMF) in Washington , DC and the International Labour Office (ILO), in Geneva, where she had the opportunity to teach and develop economic research programmes in several Sub-Sahara African countries.

In her research, she specializes in applied international labour and finance macroeconomic questions. She is particularly interested in the relationship between domestic policies and international immigrant and foreign investment location decisions. The main geographical focuses of her research are Europe and North America. She has published in academic journals, in edited books as well as produced policy studies with an international perspective for the CD Howe Institute in Toronto , the ILO, the IMF and the World Bank.

Parents shouldn’t blow college fund at casino
Letter to the editor, Vancouver Courier

BY JENNIFER LUI
MARCH 25, 2011

To the editor:

Re: “12th and Cambie,” March 18.

I strongly disagree with the idea of building a mega casino in Vancouver. Casinos have a way of sucking the money out of everyone who goes there. The casino itself would make money, but for the family members of the customers, it is a disaster waiting to happen. As a Grade 12 student determined to go to university, I’d like my parents to spend their money on a more meaningful cause. Perhaps they could spend their money on my university tuition; it’s just a thought. If the mega casino were to be built, my parents would probably go there almost every week.

I would rather not see them constantly lose money since they usually do every time they step foot inside a casino. It’s not a pretty sight.

Jennifer Lui,

Vancouver

© Copyright (c) Vancouver Courier

The following is an historic letter from major downtown Vancouver churches in opposition to the expansion of the Edgewater Casino. The churches are St. Andrew’s Wesley, Central Presbyterian Church, Christ Church Cathedral, First Baptist Church, and St. Paul’s Anglican Church:

Unified in Action

Clergy and Staff from Downtown Vancouver Churches

Mayor and Council
City of Vancouver

March 9, 2011

Re: Mega-Casino Opposition
Dear Mayor Robertson and City Council:

The undersigned, clergy and staff from major downtown Vancouver churches have agreed, personally and collectively, to stand in opposition to the proposed expansion of The Edgewater Casino in The Yaletown-False Creek area.

We are particularly concerned that the people of Vancouver have not been adequately consulted on the subject of gambling expansion in the city, and we are especially concerned that those who work and reside in the Vancouver downtown core have not been adequately informed of the plans to redefine life in the downtown area through the construction of this mega-casino.

We do not support the enormous expansion of the Edgewater Casino and its proximity to the soon-to-be-reopened BC Place Stadium, particularly when it is proposed to become the centrepiece of a large “entertainment complex” complete with hotels, restaurants, and other facilities.

Well documented social ills which accompany any and all casino developments are more than sufficient reasons for us to oppose this planned development. Our resistance is magnified even further when we see the scale of the casino that is proposed to be located in the heart of downtown!

We call on Vancouver Mayor and City Council to impose a moratorium on all gaming expansion in our municipality pending a full and comprehensive public review of gambling, its regulation, and the appropriate gaming revenue-sharing formula with municipalities and non-profit organizations.

From: St. Andrew’s-Wesley United Church
Rev. Gary Paterson, Senior Minister
Jennifer Cunnings, Minister of Children, Families and Seniors
Tim Scorer, Minister of Adult Formation
Michael Dobbin, Director of Development

From: Central Presbyterian Church
Rev. Jim Smith, Minister

From: Christ Church Cathedral
The Very Reverend Dr. Peter Elliott, Dean,
The Venerable Dr. Ellen Clark-King, Associate
The Reverend Alisdair Smith, Deacon
The Reverend Chris Dierkes, Curate,
The Reverend Dixie Black, Deacon

From: First Baptist Church
Rev. Darrell W. Johnson, Senior Minister
Rev. Dr. John Cuddeford, Minister
Andrea Tisher, Dir. of Music & Worship
Rev. Bob Swann, Minister of Mission & Justice
Judy Lang, Ass. Minister for Congregational Care
Pastor Janet G. Porcino, Minister of Discipleship
Luz Figueroa, Director of Children and Family Ministries
Rev. Abraham Han, Minister of Urban & Community Life

From: St. Paul’s Anglican Church
The Rev. Markus Duenzkofer, Incumbent

ABOUT THE PROJECT

Connection with B.C. Place Stadium: direct link to stadium attendees, with a separated walkway directly to the casino from corporate suites.

Size of gambling space in the expanded Edgewater Casino: 2 football fields

Size of this casino compared to all casinos in western Canada: #1

Number of electronic slot machines in current Edgewater Casino: 520

Number of electronic slot machines in expanded Edgewater Casino: 1,500

Percentage of electronic slot revenues estimate to come from problem gamblers: 35%

Number of studies done in B.C. to determine the social, crime and financial costs of problem gamblers in this province: none

Cost of policing, addictions, suicides, fraud, courts related to problem gamblers using this casino: unknown

Estimated annual cost of a problem gambler from missed work, fraud, bankruptcies, receiverships, embezzlements: $13,200

ABOUT THE PROCESS

Date that B.C. Lottery Corporation chair Richard Turner buys shares in Paragon’s Alberta business: 2003

Date that Turner discloses that interest: 2005

Date that Turner resigns from BCLC board: late 2005

Date that Paragon Gaming purchases Edgewater Casino out of bankruptcy and installs Turner on the board of Paragon: summer 2006

Amount of donation by Richard Turner to B.C. Liberals while Paragon’s bid is awaiting a decision by Pavco in 2009: $50,000

Time between Pavco’s invitation to two short-listed companies responding to a request for expressions of interest in this $450-million project and its announcement of Paragon as the preferred proponent: less than 11 weeks

Normal time for big government projects to determine the best proponent, according to Partnerships B.C.: 12-16 months.

Number of minutes spent debating Edgewater’s expanded casino by Vancouver City Council: 0

ABOUT BROKEN PROMISES TO THE CITY OF VANCOUVER

Projected return of expanded Edgewater casino to City of Vancouver: $10 million in new revenue from gambling

Projected revenue to City of Vancouver from Edgewater’s original casino in 2004: $10-12-million in new revenues

Actual annual return of Edgewater Casino to City of Vancouver over the past two years: $6.3 million

Promise to arts groups and charities in 2004: increased funding
What charities got in 2010: 14% less than they got in 1995
What BC Lottery Corporation got in 2010: about three times as much revenue as 1995.

Promise to bingo players and their funding recipients in 2004: New Planet Bingo hall at Edgewater
Status of promise in 2011: Never delivered

ABOUT PARAGON GAMING

Number of slot machines in Paragon’s only Las Vegas operation, a sports bar: 15

Source of Paragon’s financing for Vancouver: unknown

Number of jobs promised by Paragon in 2010 bid for a casino in Missouri: 573

Number of jobs calculated by the Missouri Department of Economic Development for the same project: 280

Estimated annual revenue by Paragon in Missouri bid: $103.4 million

Estimated real new annual revenue calculated by the Missouri independent review of the same project: $21.7 million

Status of Paragon bids to build casinos in Sugar Creek, Missouri; Moncton, New Brunswick; Oxnard, California; and Ventura County, California: all failed

Answer of Unite Here, a union of 100,000 gaming workers across North America, to the question: “Is Paragon really the right company to take on this project?”: “no”

Disturbing event that occurred at Paragon’s Cree River Casino outside Edmonton in August 2010: customer murdered after a fight in a lounge that spilled outside.

ABOUT CRIME AND GAMBLING IN B.C.

The two best places to meet gangsters in B.C., according to Fred Pinnock, former Commander, Integrated Illegal Gambling Enforcement Team: in jails and in casinos

Hours of shifts of loan sharks at River Rock Casino revealed in Oct. 2006 murder trial of loan shark Lily Li: 24/7

Percentage increase in gambling-related crime reported by Richmond RCMP after River Rock’s establishment: 400%

Percentage of money-laundering and terrorism financing cases discovered in 2008-9 that took place in casinos, according to FINTRAC: 20%

Date that RCMP’s Integrated Illegal Gaming Enforcement Team issued a report to the provincial government warning of “extreme vulnerability” of casino industry to organized crime–money laundering, infiltration, loan sharking: January, 2009

Date that B.C.’s Integrated Illegal Gambling Enforcement Team was disbanded by the provincial government: February, 2009

Date that BC Lottery Corporation was fined $670,000 by FINTRAC for repeated failure to monitor suspicious transactions, the first fine of its kind in Canada: Summer, 2010

Number of dollars involved in suspicious cash transactions at 2 casinos in Metro Vancouver, including $460k in 20’s in plastic bags, and a suitcase with $1.2 million in casino chips, revealed by CBC in 2010: $8 million.

Reaction of Insp. Baxter, head of RCMP Proceeds of Crime Unit, to these transactions: “suspicious”

Reaction to these transactions of Rich Coleman, Minister of Public Safety and Solicitor-General, also in charge of raising revenues through gambling in B.C.: “not suspicious”

Number of sentences in Vancouver city staff’s 55-page report on the B.C. Place rezoning mentioning organized crime or money-laundering: 1

ABOUT THE ECONOMIC CASE

Amount listed in Deloitte report on this project as an annual capital payback from B.C. Lottery Corporation to Paragon: $16.9 million

Estimated increase in business over Edgewater’s current revenues: 180%

Percentage of North American casino customers who live within 45 minutes of the casino: 90%

Paragon’s estimate of the number of gamblers expected to come to Vancouver every day exclusively to gamble in the new casino and stay in its 648 new hotel rooms: 548.

Feb. 2011 comment by veteran hotel broker Angus Wilkinson on the demand for new hotels needed in the city: “This city doesn’t need another single hotel room.”

Amount that would have to be charged per night for a new hotel to survive financially in Vancouver, according to Wilkinson: $400/night

Average hotel room rate in Vancouver in 2010: $166/night

This is a long video, but engaging and worth watching. It focuses to some extent on the impacts of gambling when it is placed near residential areas, but it is full of information relevant to any casino application in North America.

https://video.google.com/videoplay?docid=5340854873840831873

Bob Goodman is a Professor of Economic Development, Urban Planning and Environmental Design at Amherst in Massachussetts. He was retained in the early 90s by the Ford Foundation to carry out a study of the economic costs and benefits of legalized gambling. The original study was done for local governments who were trying to decide whether to allow gambling expansion. He has produced a number of major studies and economic analyses of gambling expansion throughout the 1990s and 2000s, and has been hired by both Democrat and Republican administrations and sat on numerous federal committees.

The video of Goodman was is from a 2008 public hearing for a proposed gambling expansion in Philadelphia. His study of over 200 towns has shown that with very few exceptions the introduction of gambling has had serious adverse affects on business and local economies.

It should be noted that Goodman comes from a union family and has a strong concern for jobs (he’s currently working on the job crisis in Detroit). He makes clear that he has no moral objections to gambling, and confesses that he gambles a little himself and has played in poker tournaments.

Click here for a summary of his report Legalized Gambling: Public Policy and Economic Development Issues (pdf). It summarizes his testimony before Congress and was published in the Fall 1995 edition of Economic Development Review.

Today several members of our Vancouver Not Vegas! Coalition are speaking to Vancouver City Council on the topic of general gaming expansion in the City of Vancouver. The opportunity to speak to Council has come as a result of a motion by Councillor Ellen Woodsworth, calling for further examination of gaming practices in British Columbia before the City of Vancouver proceeds with allowing further gaming expansion within its jurisdiction.

Our coalition is speaking in support of Councillor Woodsworth’s motion.

For presentations by Amir Alibhai, Sean Bickerton and Tom Durrie, read on. For a longer presentation by Sandy Garossino, click here.

Amir Ali Alibhai

January 31, 2011
Dear Mayor and Council:

The Alliance for Arts and Culture encourages Mayor and Council to adopt the
motion, moved by Councillors Woodsworth and Cadman regarding Casino
Development in our City. We have also been asked to speak on behalf of the
BC Association for Charitable Gaming (BCACG), which has submitted a written
submission. Together our organizations represent over 6,500 member
organizations and individuals. Motion B.6 addresses growing concerns in
this City and Province that Gaming has been expanded in an unchecked manner
and operates in a non-transparent and potentially conflicted way. The huge
revenues generated through this aggressive expansion have been attained on
the backs of charities, non-profits, municipalities and communities across
this province. In spite of this increase in revenues, the amount of funds
provided to charities and non-profits has decreased! We estimate that the
recent loss of funds to Metro Vancouver arts and cultural organizations will
be about $4 Million annually!

For years, charities and non-profits, including those in the arts and
cultural sector have been trotted out in front of municipal councils to
support expansion of Gaming activities. This was done with the understanding
that a significant percentage of revenues would be returned to communities
through a promised share to charities and non-profits. Alas this has not
been the case and, in fact, the amount of money that is allocated to civil
society organizations from these growing revenues has decreased.

In 2010, 10.7% of Gaming Revenues were allocated to charities and
non-profits, which is a far cry from the 33%, which the Province promised to
the sector in its 1999 agreement with the BCACG. On the same day in 1999,
the Province signed an agreement with the UBCM to allocate 16.5% of revenues
from Destination Casinos to municipalities. There is little doubt that this
legal agreement has also been broken.

Our members can no longer support the expansion of Gaming in BC until
agreements are re-made and are binding, until the transparency of Gaming
activity in this province is addressed., and until the concerns of the
public regarding the social, economic, and health impacts of expansion in
their communities are heard and considered carefully.

We refer Council to the MOAs and useful information regarding the expansion
of Gaming in the links below.

a) BCACG
https://www.llbc.leg.bc.ca/public/pubdocs/bcdocs/336215/game_append4.htm

b) UBCM
https://www.llbc.leg.bc.ca/public/pubdocs/bcdocs/336215/game_append3.htm

https://bcacg.com/wp-content/uploads/2010/11/BCACG-Petition-and-Brief-of-Mate
rial-BC-Gaming-Legislation.pdf

Sincerely,
Amir Ali Alibhai
Executive Director, Alliance for Arts & Culture
and on behalf of Susan Marsden,
Executive Director, BC Association for Charitable Gaming

________________________________

Sean Bickerton

Dear Mr. Mayor, Councillors and Dr. Ballem:

I apologize I cannot be there in person this evening to deliver these remarks. I was there this morning, but the change to this evening makes it impossible for me to be there tonight.

My name is Sean Bickerton. I am chair of my strata at Paris Place, co-chair of the Keefer Community Group, a member of the steering committee of the False Creek Residents Association and a member of the Vancouver Not Vegas! Coalition.

It is in this capacity and on my own behalf that I am supporting Ellen Woodsworth’s motion B6 on Casino Development. I remember when the gambling it addresses was first legalized in this province and it was on the solemn promise that 1/3 of the revenue would go back to local community charities, sports, arts and education.

Instead, they’ve cut the charities off completely while handing out more than four hundred million dollars to private casino owners over the past ten years!

How can we then consider such a massive expansion of gambling in our city after the compact that made legalized gambling possible in the first place has been completely abrogated?

The broader community I represent fully supports honoring the original arrangement wherein 1/3 of lottery funds supported needed charities helping local communities.

While we realize that issue itself may fall outside of the normal purview of this government, you are more than entitled to ask questions of the senior level of government now asking you to endorse placing the largest casino in Western Canada right in the heart of our stunningly beautiful, richly cultured, creative city.

I feel Councillor Woodsworth’s motion is particularly germane when you are being asked to approve a rezoning, development application, gambling license expansion and gambling license move all in one vote.

For all of these reasons, expansion should be put on hold until Councillor Woodsworth’s questions are answered.

I appreciate your consideration,
Sean Bickerton

________________________________

Tom Durrie

February 1, 2011
Vancouver City Council
Standing Committee of Council on City Services and Budgets

Mr. Chariman, Mr. Mayor, Councillors, ladies and gentlemen.

First let me say how much I appreciate and value to opportunity to speak to you on matters that are of personal concern to me. I’m sure I don’t have to tell you that I strongly support the motion currently before you.

Before coming here, I decided to satisfy my curiosity about how we arrived at the situation we are facing today with regard gambling revenues. It’s a very interesting history, starting with the Criminal Code of 1892.prohibiting all forms and gambling as offences against religion and morals. Early on though, things like raffles and games of chance were allowed at agricultural fairs and exhibitions. Since then, there has been a step by step relaxation of restrictions on gambling, with the major change in federal policy happening in 1969, when the Criminal Code was amended to permit gambling. I’m sure the public saw this change as merely an expansion of activities like church basement bingos and PTA raffles, a harmless way of making a little money for a good cause. And it’s true that charities and non-profits have been especially active in influencing these changes. In other words, charities and non-profits provided the justification—or should I say leverage—for changes in government gambling policies.

Amendment to the Criminal Code gave the provinces more and more control of various forms of gambling with the understanding that charities were receiving their share. In fact, they were becoming increasingly dependent upon this source of revenue.

In the mid-1980s, the British Columbia government moved to curtail the expansion of gambling in response to police concerns about the involvement of organized crime. That was more than 20 years ago! However, a backlash by the non-profit sector—they didn’t want to lose their money—caused the government to reconsider. A number of new regulations were introduced including one that said that non-profit organizations would receive 50% of casino winnings. I wonder what ever happened to that!
In short, this history has been a slow process of government raking a larger and larger share out of the hands of charities and into general revenues. Small changes taking place over a period of time are not always noticed. It’s rather like looking at yourself in the mirror one morning and noticing that you’re not as young as you used to be.

Through the 1990s various government studies and commissions looked at how proceeds from gambling were to be distributed, and made some regulations, including the establishment of the Provincial Charity Trust, a kind of community chest funding model. Without going into details, a challenge resulted in the Supreme Court of British Columbia ruling that the provincial government had no authority to appropriate a share of gambling revenues intended for charitable or religious organizations. So much for that! I’m sure you’re aware of the agreement of 1999 guaranteeing one third of gambling proceeds to charities. I understand that the government has seen fit to reduce this to something around 10%, while, at the same time, placing the Lottery Corporation and the Enforcement Branch conveniently under one ministry.

The original purpose of allowing gambling has been reversed, and much of this has been quietly slipped under the door without the awareness or consent of the public. I think this is changing as people see the results of funding shortfalls being experienced by community charities, sports, and arts groups. This motion is a step toward restoring public confidence in how gambling is regulated. What with a provincial election coming who-knows-when, and a civic election coming you-know-when, I hope you will think of your legacy, especially now, by letting the people who elected you know that you’re on their side.

Thank you,
Tom Durrie

“Business Profitability Versus Social Profitability: Evaluating Industries with Externalities, The Case of the Casino Industry”

By Earl L. Grinols and David B. Mustard
Download the PDF

Abstract

Casino gambling is a social issue, because in addition to the direct benefits to those who own and use casinos, positive and negative externalities are reaped and borne by those who do not gamble. To correctly assess the total economic impact of casinos, one must distinguish between business profitability and social profitability. This paper provides the most comprehensive framework for addressing the theoretical cost-benefit issues of casinos by grounding cost-benefits analysis on household utility. It also discusses the current state of knowledge about the estimates of both the positive and negative externalities generated by casinos. Last, it corrects many prevalent errors in the debate over the economics of casino gambling.

Highlights

At the conclusion of its investigation, the commission recommended a national moratorium on the expansion of gambling and more study of gambling’s effects, costs and benefits, before making further decisions about it.

Many studies pay a great deal of attention, for example, to estimating the number of direct and indirect jobs that casinos create and to tallying the taxes casinos pay, but do not explain the social value of an additional job or calculate the lost taxes of competing non-casino businesses.

For example, the effect of casino gambling on firm profits should be summed over all firms, not just casinos. The increased profits of the casinos should be netted against lost profits of other firms that compete for consumer spending.

If casinos temporarily reduced unemployment faster than it would have fallen otherwise, this transitory effect could correctly be counted as a benefit of casinos. However, we know of no study that has made this case.

Although casino profits and taxes are highly visible, they are invalid measures of social benefits because they do not adjust for the entire economy for the lost profits and taxes of competing businesses.

About 5-15% (of the population) could be termed heavy bettors who gamble twice per week or more. The last 2-5% of the population consists of problem and pathological (P&P) gamblers, who suffer from compulsive gambling disorders, which are expressed when the opportunity to gamble is present and sufficient time has elapsed for the problem to become evident. This group might be in the casino daily, for long periods of time, and at unusual hours. Two-thirds to 80% of gambling revenues come from the 10% of the population that gambles most heavily. (21)

According to Equation (5) we need the profits and taxes attributable to casinos minus the reduction in profits and taxes of other business due to casinos. Because profits are a function of market structure and the presence of free entry and exit, if casinos were deregulated, market contestability and free entry of casinos would drive economic profits to zero.

In 1998, profits before taxes of all non-financial corporate business in the United States were 13.8% of sales. (24) Assuming that casinos average 30% profit rates before taxes (more than double the normal business rate of profit.)
Increasing jobs in one location at the expense of lost jobs in another is not a social benefit.

Researchers estimate the social costs of casinos using two methods. The first is through the study of problem and pathological gamblers. The second is through statistical analyses of cost-creating activities such as crime, suicide and bankruptcy.

Cost Taxonomy: The most comprehensive analysis of the casino-crime link is Grinols et al. (2000), which evaluated county-level data for seven offenses in every US county over 20 yeas, and controlled for about 50 variables. It concluded that on average, 8-10% of crime in casino counties in 1996 could be attributed to the presence of casino gambling in the county, resulting in costs of $63 per adult annually in these counties.

Estimates of the fraud committed by gamblers is $1.3 billion per year(29), or $6.61 per adult annually. (30)
Maryland Department of Health and Mental Hygiene (1990) reported that 62% of gamblers in treatment committed illegal acts as a result of their gambling, 80% committed civil offenses and 23% were charged with criminal offenses.

Lesieur (1998b) surveyed nearly 400 members of Gamblers Anonymous, 57% of whom admitted stealing to finance their gambling. On average these 400 people stole $135,000 and their total theft was over $30 million. Lesieur (1992) reported on illegal activities and civil fraud engaged in by pathological gamblers to gamble or to pay gambling debts in five samples from hospital inpatients, Veterans Administration and Gamblers Anonymous groups, male prisoners, female prisoners, and a female Gamblers Anonymous sample that includes the white collar crime and other crimes listed in item 1.

Business and Employment Costs: These costs include lost productivity on the job, lost time and unemployment: sick days off for gambling, extended lunch hours, leaving early to gamble, and returning late after gambling. Problem and pathological gamblers often impose costs on their employers (in addition to theft or embezzlement discussed in the section on abused dollars below) in the form of an unreliable presence on the job and reduced productivity when present. Between 21 and 36% of problem gamblers in treatment reported losing a job because of their gambling (Lesieur, 1998b).

Bankruptcy: SMR Research Corporation. Their studies have suggested, fairly consistently, that more than 20% of compulsive gamblers has filed for bankruptcy as a result of their gambling losses.

Suicide: Consistent with this, Phillips et al (1997) found that deaths in Las Vegas were 2.5 times more likely to be a result of suicide than deaths in other comparably sized metropolitan areas.

Illness: Among the forms of sickness associated with gambling or affected by it are depression, stress-related illness, chronic or severe headaches, anxiety, moodiness, irritability, intestinal disorders, asthma, cognitive distortions, and cardio-vascular disorders.

Social Service Costs: This category of costs includes therapy/treatment costs, unemployment and other social service costs (includes welfare and food stamps).

Family Costs: Families of problem and pathological gamblers bear gambling-related costs of divorce, separation, spousal abuse and child neglect.

Table 2 shows that the total average social cost of eight studies is $13,586 per pathological gambler per year. If 1.5% of 196.65 million US adults were pathological gamblers, this would imply annual social costs of $40.1 billion or $204 per adult.

Based on these lower and upper bounds, annual national social costs from problem and pathological gambling range from $27.5 billion to over $43 billion. On a per adult basis, the numbers range from a low of $140 to a high of $221.
What is the Effect of Casinos on the Number and Gambling Patterns of Problem and Pathological Gamblers?
There is abundant evidence that increased gambling opportunities increase problem and pathological gambling. For example, the NGISC reported that the presence of a casino within 50 miles roughly doubled the presence of problem and pathological gambling. (41)

Other indicators include the tremendous increase in the numbers of gamblers seeking help when casinos enter a market, the increase in gamblers anonymous groups when gambling enters a state, and the evidence from survey data on the number of problem and pathological gamblers before and after casino expansion.

An average adult is expected to lose $200-300 each year in casinos if they are nearby, while a typical pathological gambler often loses 10-20 times this amount.

The study gives the impression that counties that opened casinos experienced better economic performance than those that did not. We can select other counties that had the same unemployment rate (within 0.1 percentage point) as the casino county in the initial period and compare their performance directly. This is done in Figure 2. A shown there, the unemployment rate dropped in all counties with similar initial unemployment.

A statistical test confirms that the drop of unemployment of casino counties is statistically insignificantly different from the drop experienced by the comparable non-casino counties shown in Figure 2.

* Department of Economics, University of Illinois, 1206 S. 6th Street, Champaign, IL 61820 E-mail: grinols@uiuc.edu
** Department of Economics, Terry College of Business, University of Georgia, 528 Brooks Hall, Athens, Georgia 30602. E-mail: mustard@terry.uga.edu.