Study Gambling's Impact

Policymakers haven't kept pace with the industry's explosive growth

I RECENTLY introduced a bill in the House of Representatives to establish a Commission on the Review of National Policies Toward Gambling. The last such commission issued its final report 20 years ago. A look at the current gambling landscape reveals that the picture has changed dramatically since then.

Casinos in America are ubiquitous. Pick up a newspaper from just about any city and you can read about a local referendum on casinos or the construction of a gambling complex. The scope and scale of casino activities, and of gambling in general, is fundamentally different from what it was just five years ago.

Casino gambling is legal in more than 20 states. State lotteries exist in 36 states, and legalized gambling in some form exists in 48 states. As a result of regulatory changes at the federal level, gambling in Indian-owned casinos and gaming encompasses 15 percent of the industry. Americans made 93 million visits to casinos in 1993.

While the focus of national policy toward gambling has evolved -

from concerns about organized crime to concerns over appropriate regulation of tribal gaming - policymakers have not kept pace with the industry's explosive growth. Federal oversight is limited primarily to Indian reservation gaming through the 1988 Indian Gaming Regulatory Act (IGRA). Since then we have seen considerable conflict and competition between Indian tribes and states over gambling. As lines of jurisdiction continue to be disputed, and as states and tribes enter into increasing levels of competition, numerous lawsuits and a great deal of lobbying effort have ensued.

A disjointed regulatory structure, with some forms of gaming regulated federally and some at the state level, has not served our communities well in ensuring a knowledgeable and judicious approach to the expansion of gambling. Gambling, particularly casino gambling, has proliferated with little show of concern at the state or federal level.

There are three primary causes of this proliferation. First, states are competing with Indian tribes, with each trying to build gambling establishments ahead of the other. Second, states are competing with other states to lure potential gamblers across state lines. Finally, with the recent success of a casino development in Windsor, Ontario (where 80 percent of patrons are Detroit residents), competition is developing between border states and Canadian communities. It appears that the defining moment for this gambling explosion is the enactment of IGRA. The regulations embodied in it have put tribes and states in a competitive, adversarial relationship.

If gambling were like any other recreation and leisure industry, there would be little reason to focus on the impact of the industry's explosive growth, except to applaud its success. But in social and economic terms, gambling has significant externalities that we do not see in other businesses or industries. There is a consensus that increased access to gambling results in greater levels of gambling addiction. This is not the only social ill resulting from gambling growth.

As states and communities tout gambling legalization as a painless economic development strategy, we must consider the true economic impact to the nation as a whole. To focus on one important sector of the economy, the impact of casino proliferation on existing small businesses appears to be mixed. Some businesses will likely benefit from the increased traffic in a community that casinos can create. Yet Americans have a fixed number of entertainment dollars; if they spend more of them on gambling, it would seem that they will spend less of them on movies, restaurants, books, and sporting events.

I am concerned about a general sentiment that legalized gambling in all forms, from lotteries to high-stakes casinos, is inevitable for just about every community. This statement by a Maryland state official is typical: ``You can be against gambling, but if your state is going to remain competitive, you have to know what your sister states are doing.'' More alarming is the sentiment expressed by a spokesman for Harrah's, the nation's largest casino operator: ``Casino gambling is moving toward becoming an essential entertainment offering in big cities.''

My legislation to establish a national commission on gambling addresses a crying need. The proposed commission would assess the national impact of gambling proliferation and would offer recommendations for regulatory reform at all levels of government. The policy debate over appropriate gambling regulations will continue for years. It must be an informed one. Given the lack of reliable, comprehensive research on the social and economic impacts of gambling at a national level, the proposed commission's work will be both pioneering and long overdue. The Opinion/Essay Page welcomes manuscripts. Authors of articles will be notified by telephone. Authors of articles not accepted will be notified by postcard. Send manuscripts by mail to Opinions/Essays, One Norway Street, Boston, MA 02115, by fax to 617 -450-2317, or by Internet E-mail to OPED@RACHEL.CSPS.COM.