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States Go To Casinos, But Does The Gamble Pay Off?

Jul 3, 2012
Originally published on July 3, 2012 12:03 pm



This is TELL ME MORE from NPR News. I'm Michel Martin. Coming up, we'll meet a couple who didn't just worry when their daughters started coming home making disparaging comments about their own looks. They decided to surround the girls with positive messages that they, too, are beautiful. We'll meet them and hear what they did in just a few minutes.

But, first, to matters of personal finance and the economy. And you know those two things are often linked and we noticed that, these days, a number of states facing tight budgets are turning to casinos. Maryland and Ohio are just the latest.

Our next guest has been covering the spread of legal gaming around the country and she tells us that, last year, casino gambling brought in almost $33 billion in revenue and you can see the appeal. State officials get excited about the promise of more money for schools and other programs, as well as the jobs, but with every new casino comes the question about the cost for the people who play, as well as the question of whether there are hidden costs that aren't being considered.

Here to talk more about this is journalist Suzette Parmley. She has reported on gaming all over the world and is a gambling and hotels reporter at the Philadelphia Inquirer.

Thank you so much for joining us.

SUZETTE PARMLEY: Thank you, Michel, for having me. My pleasure.

MARTIN: And the fact that there is a gambling, hotels and tourism reporter at a mainstream publication like the Philadelphia Inquirer kind of tells you something, doesn't it, about just what an important industry this has become?

PARMLEY: Absolutely. I can just tell you, from my perch, I'm surround by casinos. I have three in Delaware, I have 11 now in Pennsylvania, I have 12 just 60 miles away in Atlantic City and then you have Maryland to the south, which just opened its third casino.

MARTIN: And it seems as though, you know, for years, there seemed to have been so much resistance to expanding legal gaming. Why now? Why are more states interested in legal gaming now?

PARMLEY: In states like Pennsylvania, Ohio, Maryland - the most recent - it all has to do with budget deficits. It's the magic elixir whenever a state needs additional revenue without having to raise taxes.

MARTIN: And the opposition that we have heard in past years - why is it that the opposition doesn't seem to hold as much sway as they had in the past?

PARMLEY: I think a lot has to do with, Michel, the economy. And you're lawmaker. You're turning to gaming as a creation of both revenue and jobs to what people say - to the cost of who's the population you're going to mostly impact by this? Those that are elderly, those that can least afford to gamble, those that have no control, and now you're bringing casinos within 10 minutes of their homes. So that is the pact you've made with almost the devil here. You're generating this for the state, but you're also going to impact a demographic that can't handle it.

MARTIN: Well, talk to me a little bit more about that. And, if you're just joining us, we're talking with Suzette Parmley. She covers gambling, hotels and tourism for the Philadelphia Inquirer and we're talking about the fact that a number of states are adding casinos and other forms of legalized gambling now, and it seems to be spreading much more quickly than it had in the past.

We're talking about the fact that the critics of this say that, you know, this is essentially enticing to people who can least afford it. But is that true? You know, when you see the ads for new casinos, they always feature kind of young couples, you know, like a night out on the town type of deal. Now, is that the typical gambling customer?

PARMLEY: I can tell you this, Michel. The quintessential customer is the 55-year-old female slots player. That is the majority and slots pay 70 percent of the bills in casinos. Then you have the table games customer, which is the late 20s, 30s, 40-year-old male.

And then you have that 30 percent, which you see in every casino that I've been in - in Pennsylvania, Atlantic City - is the elderly. They're retired. They're living off their pension and social security checks and you see a lot of them with canes and wheelchairs in these casinos. But mind you, these are people without a steady income. They're literally gambling away their pensions and Social Security checks. I've written about it. I see it constantly when I go into casinos in any state.

MARTIN: Tell me more about that. How do we know that people are gambling away their Social Security and their pension checks?

PARMLEY: When you interview them, they tell you up front. They know in their mind, this is not what you should be doing with your money and your check coming in monthly, but it becomes almost an addictive form of behavior for them. A lot of them have mobility issues, so the easiest form of entertainment for them becomes planting themselves in front of a slot machine for three or four hours at a time, and not move, and just plug that money into the machine, whatever it takes to, you know, get that form of entertainment and that becomes it for them.

MARTIN: Do the casinos actually offer the economic shot in the arm that jurisdictions believe that they will? What do we know, over time - since you've been covering this, you know, for years now - does the promise actually meet reality?

PARMLEY: It does, initially. I'll explain what happens over time, though. In late 2006, when the first casino opened in Pennsylvania, it was mid-November. We now have 11. It's created about 15,000 jobs in the state of Pennsylvania, but that tends to slow down after time and those 15,000 jobs - believe it or not - a big chunk of them came from Atlantic City. Those casinos, there, have lost about 10,000 employees.

So what the critics are saying - you're not really creating new jobs and you're really not creating new revenue. You're redistributing it to these different states and you're taxing it the most, you know, vulnerable population who could least afford to do it to create these so-called jobs and revenue. It's a redistribution - according to their mind.

MARTIN: And now, what about the next frontier of gambling, which is online gaming that you talked about? Do you expect to see an increased acceptance of online gaming?

PARMLEY: As technology continues to move forward, this has been on the plate of several legislatures, including New Jersey, which is tackling it right now. For New Jersey, it was vetoed by Governor Christie last year and it's still in a kind of a holding pattern right now because of issues he has - the governor has - with regulating it.

Delaware just passed an online gaming bill earlier this month. It's the key issue at the Global Gaming Conference this coming October, which I will be attending, on what this frontier holds and Congress is trying to figure out ways to regulate it. Do you have a national tax on it? Do you let the states decide how much tax to tax it?

For Atlantic City, they're saying, we just need that competitive edge to be able to offer it in our casinos by offering online gaming at servers in 11 to 12 casinos there. So, again, the issue is how do you regulate it? It all comes down - again, this might be the worst form of addictive form of gambling, online.

MARTIN: And let's end this conversation where it started, which is on this whole question of the addictive nature of it. Is there any sign that some of the regulations that states have already put into place have any effect? Like states, for example, require casinos to have warnings and 800 numbers before they can open, you know, with counselors kind of available to talk to the...

PARMLEY: Exclusionary lists. Right.

MARTIN: Right. Exclusionary lists for people who have demonstrated that they have an inability to control their spending or gambling, things of that sort. Is there any evidence that this works?

PARMLEY: I'll give you the national statistics based on some of the reporting I've done. One out of every five is considered a problem gambler; and one out of 20 is considered a pathological gambler, where it has become a destructive force in their lives. They're stealing from family members, or facing foreclosure or they're losing their jobs.

And the criticism of casinos is - yeah - they post all this stuff, you know, if you have a problem, call 1-800-GAMBLER. If you've been identified as an extreme pathological gambler, we've got you on this exclusion list. We're not going to let you in any casino, like they do in Atlantic City and in Pennsylvania.

But casinos track everything you do through a player card. They know how many times you're in their casino, what you play, what you like to play, what you eat - and they target their mailings through slots comps for you to entice you to go back and do the exact same activity that you're having a problem with controlling.

So it's almost a catch 22. They know there's people out there who have an issue, but the mailings and the promotions are geared to getting them back there, over and over again. You have several people in Pennsylvania who will tell you, you know, with the casinos now 15 or 20 minutes from their houses versus having to drive to Atlantic City, they're there three or four times a week.

Before, there was some sort of checks and balance where, you know, you got to make that hour and a half drive to Atlantic City. You don't have to do that anymore, Michel. It's right there in your backyard. It's become a big issue. The casino has come to you.

MARTIN: Suzette Parmley covers hotels and gaming for the Philadelphia Inquirer. She joined us from Philadelphia.

Suzette, thank you so much for speaking with us. This is really interesting.

PARMLEY: Oh, thank you. Thank you, Michel. It was my pleasure.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright National Public Radio.