January 21, 2003

Research into Gambling Cited by Washington Post and Christian Science Monitor

Gambling is big business. According to a January 17 Washington Post article by Martha McNeil Hamilton, gambling is a $63-billion dollar industry. And slot machines, considered an also-ran in the early days of the industry when gambling was mostly limited to Nevada, now account for the biggest portion of the revenue. New slot-machine technology is designed to allow gamblers to play more by accepting a greater variety of wagers, from a penny to $25.

The Post article cites work by Earl Grinols, a professor of economics, who researches gambling and its impact on the economy. Grinols noted that the gambling industry tends to expand during economic downturns such as during the early 1990s. Gambling proponents in a state often cite the ability of that state to capture some of the revenue from near-by states that already permit gambling.

"... Grinols said that there needs to be more cost-benefit analysis of expanded gambling. 'I think it's desperation on the part of states and localities,' he said. 'It sounds awfully alluring: Let us produce millions of dollars, and we won't take it from your citizens. We'll take it from neighboring states,' he said. But as gambling proliferates in neighboring states, 'on average nobody is getting anybody else's money.' "

The Washington Post article is available online. For new readers, a short, 3-question survey must be completed before access is allowed.

Grinols also commented for an article in the online version of the Christian Science Monitor on January 21, 2003. Grinols' research, done with colleague David Mustard, indicates that the social costs of gambling outweigh social benefits. According to the article by David R. Francis,

"benefits [such] as jobs, profits, and taxes from a new casino were at most $75 per adult. On the other hand, costs of pathological gamblers, about 2 percent of adults, were $140 to $221 a head for all adults."