Race to the bottom

November 07, 2003

FOR MARYLANDERS dazzled by the easy money of legalizing slot machines, an advance glimpse of its costs can be had inside a forlorn Baltimore rowhouse, home to the Compulsive Gambling Center Inc., said to be the nation's oldest such treatment center. There, you find patients such as Alex Horn of Pikesville, who owned a cleaning supply business until, he says, he got hooked on video poker, wasted a fortune, took to robbing banks and ended up in jail for almost 12 years. "It's hard to imagine what someone goes through," he says of his gambling.

Mr. Horn's compulsion may seem obscure, but it's long been recognized by the American Psychiatric Association, and it's relevant to the debate over bringing slots to Maryland. Problem gamblers likely would be a source of rising social costs, offsetting slots' revenues. Estimates of pathological gamblers start at about 1 percent of all adults; treating one case can cost up to $50,000.

The social costs created by gambling addicts are more difficult to quantify. An analysis this year by economist Robert Carpenter of the University of Maryland, Baltimore County uses an estimate of 37,000 Maryland gambling addicts, each averaging $900 a year in costs from marital and family strife, lost productivity and jobs, illness, thefts and other crimes, legal and jail expenses. That's more than $30 million a year.

Modern "video lottery terminals" are not the one-armed bandits of bygone days but offer a high-tech, bet-every-five-seconds, hypnotic experience believed to be more addicting than other forms of betting. Once slots are available, the incidence of problem gambling within 25 miles of the parlors likely will grow. Indeed, casinos can count on problem gamblers to provide as much as 15 percent or more of their revenues.

Some states enable compulsive gamblers to bar themselves from casinos. That hasn't stopped lawsuits against operators, in some cases for targeting the addicted in their marketing. Gambling opponents predict class-action lawsuits similar to those against the tobacco industry for pushing an addictive product. U.S. courts, however, haven't been friendly to gamblers' lawsuits, and the industry goes out of its way not to fall into tobacco's big lie, by admitting gambling can be addictive and supporting treatment.

So for some, slots are a substance of abuse, with lower-income gamblers particularly vulnerable, studies indicate. That makes putting slots in Baltimore - a city with one of the nation's highest drug addiction rates, where even alcohol and tobacco billboards are banned - dangerous. But such fears aren't limited to the inner city: Communities near other possible sites - from the Eastern Shore to Western Maryland - don't just fret over more traffic; they know slots would bring social problems.

To address its structural budget deficit, Maryland may opt for slots. But once they're in the door, be prepared for pressure to expand casino hours, machines and games - to keep up with other states' competition. Even with more than $7 billion in annual gambling revenue, Las Vegas officials are now talking about legalizing brothels, as a form of economic development, of course. Make no mistake, this is a race to the bottom.

If Maryland must join this race - and it remains a curious public policy for a very wealthy state - it ought to do so with a cold eye toward its huge costs, of which those from problem gamblers are just a small part. The state then must employ the strictest controls, not just to maximize public revenue but to minimize social impact.

The potential harm is great enough that the most extensive analysis, by the National Gambling Impact Study Commission, recommended in 1999 a moratorium on expanding gambling until its impact is better understood. In lieu of that, this much is already clear: Slots may quickly bring the state mounds of cash, but big social and financial costs will surely follow - costs that all Marylanders will bear.

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