American states, mimicking Nevada (itself currently under water), have increasingly turned to gambling to remedy their fiscal woes.  Despite - or because of - their worsening financial conditions and gambling's demoralizing effect on the poor, states must double down on this investment.


The Stanton Peele Addiction Website, January 7, 2011. This blog post also appeared on Stanton's Addiction in Society blog at

An America Built on Addiction

As states go down the financial tubes, they turn increasingly to gambling. Lesley Stahl hosts a 60 Minutes segment this Sunday on the gambling bonanza in America. Thirty-eight (that's three quarters) of states now have casino gambling. Forty-eight out of 50 states now profit from gambling, including state monopoly lotteries. The multistate Mega Millions lottery recently created a national furor in the build-up to two winners claiming the $380 million jackpot. There are twice as many slot machines - according to Stahl, who calls it the most addictive form of gambling - as ATMs in the United States.

Gambling is the states' answer to productive citizens and fiscal discipline - i.e., living within their means. Instead, they rely on people losing money in their casinos and wasting money on lotteries and playing poker. They hope many of the losers will come from out of state - but if the large majority of states have casinos, what are the chances that people will travel elsewhere to lose their money? So states end up cannibalizing their own.

At one point, Nevada was the only state with casinos (remember the films Bugsy and Casino?), and a mere 13 had lotteries. I live in a state - New Jersey - which was among the first to take its lead from Nevada in legalizing casino gambling. How's it going? Here's Times economic columnist Paul Krugman's summary of state financial disasters: "data from the Center on Budget and Policy Priorities suggest that the Texas budget gap is worse than New York's, about as bad as California's, but not quite up to New Jersey levels."

Oh, here's how Nevada itself is doing : "Nevada has a greater concentration of economic misery than any other state. The state's unemployment rate, which in June edged up to 14.2 percent, has risen faster during the past year than it has anywhere else, and nearly six percent of all homes across the state's desert landscape received a foreclosure filing in the first six months of the year."

Well, at least inner-city communities - where casinos are generally lodged - are benefiting - aren't they? Casino gambling in New Jersey was located in Atlantic City - a decrepit and dying town. Today, New Jersey is considering taking over Atlantic City's finances due to the financial disaster the city has become. As for the city itself - the poverty and despair of its ghetto rival those of Camden and Newark. As a child growing up in nearby Philly, my family summered in Atlantic City, whose beaches were filled with kids and whose boardwalk at night was a parade of sauntering families.  Today its beaches are filthy and nearly empty as people focus entirely on the tawdry, cacophonous casinos along the boardwalk - where people rarely walk except to get to gambling facilities.

So, obviously, we will be cutting back on casinos as a solution for our cities' and states' financial woes. Well, not exactly.  In fact, states constantly seek to expand their gambling operations. California is exploring how to regulate and tax Internet poker in the state - the headline of an article describing this effort, "State's dependence on gambling revenue grows," could be the title for this post.

By the way, do you imagine happy, high-fashion high-rollers filling casinos - as ubiquitous television ads would indicate? No, gambling is a downstream activity socio-economically.  Numbers betting was located in ghettos before states got into the lottery business (Macolm X was a numbers runner in Harlem).  Today, casinos are heavily associated with Native American communities, which maintain separate rights to promote gambling.

It's not correct to say that most gamblers are addicted. It is fair to say that many gamblers lose more than they can afford - and the poorest are the most overinvolved in gambling - many of whom could be called addicted in terms of losing money in ways that detract from their emotional well-being and the condition of their lives .

Players with annual incomes of less than $10,000 spent almost three times as much on gambling -- in aggregate, real dollars -- as those with incomes of more than $50,000. With the aggressive encouragement of state governments, US gamblers -- most of them scraping by on limited incomes -- had to lose $84 billion last year in casinos and lotteries for the states to raise $24 billion in new revenues.

Yet states actively and increasingly promote gambling in a way that appeals most directly to the deprived and unverprivileged - who are, after all, most susceptible to the idea that gambling elevates people to a higher status and holds out the promise that gamblers' lives will be transformed.  And all of this is going to get worse - because the addiction (that is, the states' addiction) to gambling is growing.