John W. Kindt, a business professor and national gambling critic, is a contributing author and editor for a new, three-volume book collection that offers the most comprehensive analysis ever on the perils of wagering. Kindt discussed the nearly 3,000-page United States International Gambling Report series in an interview with News Bureau Business & Law Editor Jan Dennis.
What is the purpose of the book series, a five-year project by the Research Editors Doctoral Directorate on Gambling, which compiles decades of reports on the impact of legalized gambling, particularly casinos?
Our primary goal was to preserve valuable academic research and government reports on gambling that were disappearing over time, not necessarily to try to influence policy makers. But it would be surprising if people don’t look to the report for policy decisions, and I think they’re going to pick up the economics on their own. As this recession gets worse, people are going to be looking around to see what they can do to pump prime the economy, and getting rid of gambling should be at the top of the list. Gambling just makes everything else worse. Every economist knows it.
How does gambling drag down the economy?
When money is spent on gambling, it’s not being spent on cars, refrigerators, computers and other products that create manufacturing, service and other jobs that drive the consumer economy. For every $1 that’s gambled, you lose $3 to the consumer economy because an economic multiplier effect triples the value of every consumer dollar spent, creating more jobs that supply goods and services. On top of that, gambling causes social costs that are a drain on taxpayers. Research shows that in areas with casinos, the rate of new addicted gamblers doubles, bankruptcies rise 18 to 42 percent even when the economy is good and crime goes up 10 percent every year. So the social costs to taxpayers are $3, $4 or $5 for every $1 in benefits.
What about industry claims that gambling fuels economic growth?
The industry claims that casinos create jobs, but 90 percent of the money spent on casino gambling goes into slot machines. Slot machines don’t create jobs. All you do with slot machines is dust them off and collect the money. On average, every slot machine takes in $100,000 a year, which is a loss of $300,000 to the consumer economy based on the multiplier effect. That costs the consumer economy a very good job with very good benefits. So every slot machine takes away a job a year, and there are tens of thousands of them. The gambling industry claims jobs, jobs, jobs, and that’s not true. But if you say it loud enough, long enough, with millions of dollars behind it, people start to believe it.
Has there been any change in a two-decade trend that has rapidly expanded gambling in the U.S. and around the world?
Russia has closed 2,230 casinos, leaving only four in isolated areas. Siberia is the one that comes to mind. Russians who want to gamble now have to go to Siberia. So what do the Russians know that we don’t know? I think they reached conclusions similar to those of our U.S. National Gambling Impact Study Commission more than a decade ago. Gambling weighs down the economy and increases crime, corruption, bankruptcies and gambling addiction. It’s just not worth the cost. The Russians even called it a national security issue, which parallels our research. No nation can maintain a strong military presence with an economy drained by gambling that gets weaker, weaker and weaker.
What impact would a gambling ban have on the sputtering U.S. economy?
I think within a short economic time frame we would see an amazing recovery. The longer we wait, the longer it will take to see the impact. It’s time to just wipe the slate clean, emulate the Teddy Roosevelt era and restore the prohibition against gambling. If you want to get out of the recession, you have to go back to basics, and economists agree that you can’t gamble your way to prosperity. In fact, it’s just the opposite. The problem is that some people don’t agree. If they don’t, that’s fine. Enjoy your recession.
