Politicians' Fervor For Gambling Gold Begins to Turn Tepid

IN the years since states began peddling lottery tickets and casinos spread beyond Nevada, legal gambling has become the top national pastime. More Americans now play video poker, buy lotto tickets, place bets on sports teams, or pull slot-machine handles than attend baseball games.

But in recent months, such activity (now allowed in every state except Utah and Hawaii) has come under increased fire.

Nearly all proposals to expand state-sanctioned gambling have been stopped cold by voter referendums, state legislatures, and state courts. State officials from Oregon to Maryland are studying the extent to which they have become overly dependent on gambling income to pay for public services. And a large number of lawmakers from all parts of the political spectrum are pushing for a national commission to study the economic and social impact of gambling.

''The political tide has turned,'' says the Rev. Tom Grey, executive director of the National Coalition Against Legalized Gambling, a two-year-old grass-roots group that opened an office in Washington Wednesday. ''This is our opening offensive,'' says the Methodist minister and former infantry captain, determined to take on a political opponent - organized gambling - that is nearly as powerful as the National Rifle Association. ''They came out from Las Vegas and New Jersey and attacked us, but now we're going to go after them and take away their political cover.''

With allies as diverse as the Christian Coalition and Common Cause, observers say, antigambling activists may well succeed.

Once a back-room activity tied to racketeering and political corruption, gambling has become big business in the US, generating about 1 million jobs and some $40 billion in annual revenues.

Big bucks for states, cities

''Our industry is bringing economic opportunity to hundreds of communities across the country,'' says Frank Fahrenkopf, a former member of Congress and chairman of the Republican National Committee who now represents most gambling businesses in this country as head of the American Gaming Association. ''Gaming provides an entertainment alternative that the American public wants at a price it considers reasonable.''

Mr. Fahrenkopf accuses his opponents of relying on ''a whole host of outdated stereotypes, misperceptions, and misleading and inaccurate data'' to attack the casinos, manufacturers of gambling equipment, and others he represents.

The true costs and benefits of legal gambling are hotly debated.

Crime concerns

The industry claims to generate $1.4 billion a year in tax revenues for state and local governments. And it asserts that no credible evidence links casinos or other gambling activities to rising crime or political corruption.

But others say gambling does have serious negative impacts on communities. During the last election cycle, when Florida considered allowing casinos, the state organizations representing sheriffs and police chiefs warned that ''casino gambling will mean ... that crime rates will go up.''

''It means the community will see - and have to confront - more vagrants, prostitutes, domestic violence, and gambling addiction,'' the Florida law enforcement organizations reported.

In addition to violent crime and vice, some 40 percent of all white-collar crime is committed by individuals with serious gambling problems, according to the American Insurance Institute.

''If you legalize gambling, you can count on a certain number of people becoming addicted,'' says Steven Forrest, program director of the National Coalition on Problem Gambling, a group that maintains telephone hot lines for compulsive gamblers. Various studies indicate that from 1.5 percent to 6 percent of the population can become addicted if exposed to legal gambling, and this can prove expensive to state and local governments faced with social service costs, legal expenses, and lost productivity.

Officials in Maryland (where only the lottery is legal) concluded that each compulsive gambler could cost the state $50,000. A study commission there recommended against legalizing other forms of gambling.

In Oregon, which now has 7,700 video poker machines (as well as a lottery, sports betting, and five Indian casinos), a recently appointed commission will study the economic and social impacts of gambling. Concern is mounting that Oregon is getting hooked on gambling proceeds to fund schools, prisons, and other services.

Expansion bids denied

Such sentiment seems to be spreading. Of 10 statewide gambling referendums in 1994, six were defeated at the ballot box (Colorado, Florida, Minnesota, Oklahoma, Rhode Island, and Wyoming) and two in state courts (Arkansas and New Mexico).

Last year casino interests lost politically in seven states (Alabama, Illinois, Maryland, Pennsylvania, Texas, Virginia, and West Virginia) and won no victories. In Massachusetts in 1995, three of the four local jurisdictions voting on new casinos turned them down.

Twenty years ago, a national commission on gambling concluded that the subject was more properly the responsibility of individual states. But a growing number of lawmakers, plus President Clinton and several of the Republican presidential hopefuls, say it's time for Uncle Sam to get involved.

Time for a 'hard look'?

''Gambling is spreading throughout the country like wildfire, and it needs a hard look,'' says Rep. Frank R. Wolf (R) of Virginia, author of a bill that would create a National Gambling Impact and Policy Commission. So far, the measure has 132 cosponsors in the House. A companion bill in the Senate, drafted by Richard Lugar (R) of Indiana and Paul Simon (D) of Illinois, has the backing of Senate majority leader Bob Dole.

Representative Wolf argues that gambling as an interstate business falls under Congress's jurisdiction, and that corruption and criminal cases associated with gambling (such as those now being investigated in Louisiana) are properly the focus of federal agencies.

Under the bill, the nine-member commission would be required to report back to Congress and the president within two years.

Fahrenkopf argues that ''there is absolutely no need for the study.'' But Wolf says, ''Government is supposed to be the protector of society, not the sponsor of its ruin.''

Will the legislation pass this year in Congress?

''If I were a betting man I'd put my house on it,'' says Mr. Grey.