how casinos enable gambling addicts - the atlantic€¦ · money appeared from his occasional wins,...

7/7/2019 How Casinos Enable Gambling Addicts - The Atlantic

https://www.theatlantic.com/magazine/archive/2016/12/losing-it-all/505814/ 1/32

NTHEMORNINGofMonday,August13,2012,ScottStevensloadedabrownhuntingbagintohisJeepGrandCherokee,thenwenttothemasterbedroom,wherehehuggedStacy,hiswifeof23years.“Ilove

you,”hetoldher.

Stacythoughtthatherhusbandwasofftoajobinterviewfollowedbyanappointmentwithhistherapist.Instead,hedrovethe22milesfromtheirhomein

HowCasinosEnableGamblingAddicts



Steubenville,Ohio,totheMountaineerCasino,justoutsideNewCumberland,WestVirginia.HeusedthecasinoATMtocheckhisbank-accountbalance:$13,400.Hewalkedacrossthecasinofloortohisfavoriteslotmachineinthehigh-limitarea:TripleStars,athree-reelgamethatcost$10aspin.Maybethistimeitwouldpayoutenoughtosavehim.

Itdidn’t.Hespentthenextfourhoursburningthrough$13,000fromtheaccount,plugginganywinningsbackintothemachine,untilhehadonly$4,000left.Aroundnoon,hegaveup.

Stevens,52,leftthecasinoandwroteafive-pagelettertoStacy.AformerchiefoperatingofficeratLouisBerkmanInvestment,hegavehercarefulfinancialinstructionsthatwouldenablehertoavoidresponsibilityforhislossesandkeephercreditintact:Shewastodeposittheenclosedcheckfor$4,000;moveherfundsintoanewcheckingaccount;declinetopaythemoneyheowedtheBellagiocasinoinLasVegas;disregardhiscredit-carddebt(itwasinhisnamealone);filehertaxreturns;andsignupforSocialSecuritysurvivorbenefits.Heaskedthatshehavehimcremated.

Hewrotethathewas“cryinglikeababy”ashethoughtabouthowmuchhelovedherandtheirthreedaughters.“OurfamilyonlyhasachanceifI’mnotaroundtobringusdownanyfurther,”hewrote.“I’msosorrythatI’mputtingyouthroughthis.”

Heplacedtheletterandthecheckinanenvelope,drovetotheSteubenvillepostoffice,andmailedit.ThenheheadedtotheJeffersonKiwanisYouthSoccerClub.Hehadraisedfundsforthesegreenfields,tendedthemwithhislawnmower,andwatchedhisdaughtersplayonthem.

StevensparkedhisJeepinthegravellotandcalledRickyGurbst,aClevelandattorneywhosefirm,SquirePattonBoggs,representedBerkman,whereStevenshadworkedfor14years—untilsixandahalfmonthsearlier,whenthefirmdiscoveredthathehadbeenstealingcompanyfundstofeedhisgamblinghabitandfiredhim.



Stevenshadarequest:“Pleaseaskthecompanytocontinuetopaymydaughters’collegetuition.”Hehadreceivednotificationthatthetuitionbenefitthecompanyhadprovidedwouldbediscontinuedforthefallsemester.Failinghisdaughtershadbeenthefinalblow.

Gurbstsaidhewouldpassalongtherequest.

ThenStevenstoldGurbstthathewasgoingtokillhimself.

“What?Wait.”

“That’swhatI’mgoingtodo,”Stevenssaid,andpromptlyhungup.

HenextcalledJ.TimothyBender,aClevelandtaxattorneywhohadbeenadvisinghimontheIRS’sinvestigationintohisembezzlement.Upuntilthatpoint,hehadputonabravefaceforBender,sayinghewouldacceptresponsibilityandservehistime.NowhetoldBenderwhathewasabouttodo.Alarmed,Bendertriedtotalkhimoutofit.“Look,thisishardenough,”Stevenssaid.“I’mgoingtodoit.”Click.

At4:01p.m.,StevenstextedStacy.“Iloveyou.”Hethentextedthesamemessagetoeachofhisthreedaughtersinsuccession.

Hetookoffhisglasses,hisglucosemonitor,andhisinsulinpump—Stevenswasadiabetic—andtuckedthemneatlyintohisbluethermallunchbagwiththesandwichandapplehehadn’ttouched.

HeunpackedhisBrowningsemiautomatic12-gaugeshotgun,loadedit,andsatononeoftherailroadtiesthatrimmedtheparkinglot.

Thenhedialed911andtoldthedispatcherhisplan.

COTTSTEVENSHADN’Talwaysbeenagambler.AnativeofRochester,NewYork,heearnedamaster’sdegreeinbusinessandfinanceattheUniversityofRochesterandbuiltasuccessfulcareer.Hewonthetrustof

thesteelmagnateLouisBerkmanandworkedhiswayuptothepositionofCOOinBerkman’scompany.Hewasmeticulousaboutfinances,bothprofessionallyand



personally.WhenhefirstmetStacy,in1988,heinsistedthatshepayoffhercredit-carddebtimmediately.“Yourcreditisallyouhave,”hetoldher.

Theymarriedthefollowingyear,hadthreedaughters,andsettledintoacomfortablelifeinSteubenvillethankstohispositionwithBerkman’scompany:asix-figuresalary,threecars,twocountry-clubmemberships,vacationstoMexico.Stevensdotedonhisgirlsandthrewhimselfintocausesthatbenefitedthem.Inadditiontothesoccerfields,heraisedmoneytorenovatethemiddleschool,tobuildanewsciencelab,andtosupporttheFrenchClub’striptoFrance.Hespenttimeonweekendspaintingthehigh-schoolcafeteriaandstrippingthehallwayfloors.

Stevensgothisfirsttasteofcasinogamblingwhileattendinga2006tradeshowinLasVegas.Onasubsequenttrip,hehitajackpotonaslotmachineandwashooked.

ScottandStacysoonbeganmakingseveraltripsayeartoVegas.Shelikedshopping,sittingbythepool,evenoccasionallyplayingtheslotswithherhusband.TheybroughtthekidsinthesummerandmadeafamilyvacationofitbyvisitingtheGrandCanyon,theHooverDam,andDisneyland.Backhome,StevensbecamearegularattheMountaineerCasino.Overthenextsixyears,hisgamblinghobbybecameanaddiction.Thoughhewonoccasionaljackpots,someofthemsixfigures,helostfarmore—asmuchas$4.8millioninasingleyear.

DidScottStevensdiebecausehewasunabletoreininhisownaddictiveneedtogamble?Orwashethevictimofasystemcarefullycalibratedtopreyonhisweakness?

Stevensmethodicallyconcealedhisaddictionfromhiswife.Hehandledallthecouple’sfinances.Hekeptseparatebankaccounts.Heusedhisworkaddressforhisgamblingcorrespondence:W-2Gs(theIRSformusedtoreportgamblingwinnings),wiretransfers,casinomailings.Evenhisbestfriendandbrother-in-law,CarlNelson,whooccasionallygambledalongsideStevens,hadnoinklingofhis



problem.“IwasshockedwhenIfoundoutafterwards,”hesays.“TherewasawholeScottIdidn’tknow.”

WhenStevensranoutofmoneyatthecasino,hewouldleave,writeacompanycheckononeoftheBerkmanaccountsforwhichhehadcheck-cashingprivileges,andreturntothecasinowithmorecash.Hesometimesdidthisthreeorfourtimesinasingleday.Hiscolleaguesdidnotquestionhisabsencesfromtheoffice,becausehisjobinvolvedoverseeingvariouscompaniesindifferentlocations.Bythetimethefirmdetectedirregularitiesandheadmittedtheextentofhisembezzlement,Stevens—thelikable,responsible,trustworthycompanyman—hadstolennearly$4million.

Stacyhadnoidea.InVegas,Stevenshadalwayskeptplanstojoinherandthegirlsforlunch.Athome,hewasalwaysontimefordinner.Saturdaymornings,whenhetoldherhewasheadedintotheoffice,shedidn’tquestionhim—sheknewhehadalotofresponsibilities.SoshewasstunnedwhenhecalledherwithbadnewsonJanuary30,2012.Shewasonthestairswithaloadoflaundrywhenthephonerang.

“Stace,Ihavesomethingtotellyou.”

Sheheardtheburdeninhisvoice.“Whodied?”

“It’ssomethingIhavetotellyouonthephone,becauseIcan’tlookinyoureyes.”

Hepaused.Shewaited.

“Imightbecominghomewithoutajobtoday.I’vetakensomemoney.”

“Forwhat?”

“Thatdoesn’tmatter.”

“Howmuch?Tenthousanddollars?”

“No.”



“More?Onehundredthousand?”

“Stace,it’senough.”

Stevensneverdidcomecleanwithherabouthowmuchhehadstolenorabouthowoftenhehadbeengambling.Evenafterhewasfired,Stevenskeptgamblingasoftenasfiveorsixtimesaweek.Hegambledonhisweddinganniversaryandonhisdaughters’birthdays.Stacynoticedthathewasirritablemorefrequentlythanusualandthathesometimessnappedatthegirls,butshefiguredthatitwasthefalloutofhisunemployment.Whenheheadedtothecasino,hetoldherhewasgoingtoseehistherapist,thathewasnetworking,thathehadotherappointments.Whenmoneyappearedfromhisoccasionalwins,heclaimedthathehadbeendoingsomeonlinetrading.Whiletheylivedoff$50,000thatStacyhadinaseparatesavingsaccount,hedrainedtheir401(k)of$150,000,emptied$50,000outofhiswife’sanddaughters’ETradeaccounts,maxedouthiscreditcard,andlostallofa$110,000personalloanhe’dtakenoutfromPNCBank.

Stacydidnottrulyunderstandtheextentofherhusband’saddictionuntiltheafternoonthreepoliceofficersshowedupatherfrontdoorwiththenewsofhisdeath.

Afterward,Stacystudiedgamblingaddictionandthewaysslotmachinesenticecustomerstopartwiththeirmoney.In2014,shefiledalawsuitagainstbothMountaineerCasinoandInternationalGameTechnology,themanufactureroftheslotmachinesherhusbandplayed.AtissuewasthefundamentalquestionofwhokilledScottStevens.Didhediebecausehewasunabletoreininhisownaddictiveneedtogamble?Orwashethevictim—asthesuitalleged—ofasystemcarefullycalibratedtopreyuponhisweakness,onethatrobbedhimofhismoney,hishope,andultimatelyhislife?

ESSTHAN��YEARSAGO,casinogamblingwasillegaleverywhereintheUnitedStatesoutsideofNevadaandAtlanticCity,NewJersey.ButsinceCongresspassedtheIndianGamingRegulatoryActin1988,tribaland

commercialcasinoshaverapidlyproliferatedacrossthecountry,withsome1,000



nowoperatingin40states.Casinopatronsbetmorethan$37billionannually—morethanAmericansspendtoattendsportingevents($17.8billion),gotothemovies($10.7billion),andbuymusic($6.8billion)combined.

Thepreferredmodeofgamblingthesedaysiselectronicgamingmachines,ofwhichtherearenowalmost1millionnationwide,offeringvariationsonslotsandvideopoker.Theirprevalencehasacceleratedaddictionandreapedhugeprofitsforcasinooperators.Asignificantportionofcasinorevenuenowcomesfromasmallpercentageofcustomers,mostofthemlikelyaddicts,playingmachinesthataredesignedexplicitlytolullthemintoatrancelikestatethattheindustryreferstoas“continuousgamingproductivity.”(Ina2010report,theAmericanGamingAssociation,anindustrytradegroup,claimedthat“theprevalenceofpathologicalgambling…isnohighertodaythanitwasin1976,whenNevadawastheonlystatewithlegalslotmachines.And,despitethepopularityofslotmachinesandthedecadesofinnovationsurroundingthem,whenadjustedforinflation,therehasnotbeenasignificantincreaseintheamountspentbycustomersonslot-machinegamblingduringanaveragecasinovisit.”)

“Themanufacturersknowthesemachinesareaddictiveanddotheirbesttomakethemaddictivesotheycanmakemoremoney,”saysTerryNoffsinger,theleadattorneyontheStevenssuit.“Thisisn’tnegligence.It’sintentional.”

Noffsinger,72,hasbeenherebefore.Asoft-spokenpersonal-injuryattorneybasedinIndiana,hehasfiledtwopreviouslawsuitsagainstcasinos.In2001,hesuedAztarIndianaGaming,ofEvansville,onbehalfofDavidWilliams,then51yearsold,whohadbeenanauditorfortheStateofIndiana.Williamsbegangamblingafterhereceiveda$20voucherinthemailfromCasinoAztar.Hedevelopedagamblingaddictionthatcosthimeverything,whichinhiscaseamountedtoabout$175,000.NoffsingerallegedthatAztarhadviolatedthe1970RacketeerInfluencedandCorruptOrganizationsActbyengagingina“patternofracketeeringactivity”—usingthemailtodefraudWilliamswithcontinuedenticementstoreturntothecasino.ButtheU.S.DistrictCourtfortheSouthernDistrictofIndianagrantedsummaryjudgmentinfavorofAztar,andtheU.S.CourtofAppealsforthe



SeventhCircuitinstructedthedistrictcourttodismissthecase,declaring,“Evenifthestatementsinthesecommunicationscouldbeconsidered‘false’or‘misrepresentations,’itisclearthattheyarenothingmorethansalespufferyonwhichnopersonofordinaryprudenceandcomprehensionwouldrely.”

Fouryearslater,NoffsingerfiledasuitonbehalfofJennyKephart,then52yearsold,againstCaesarsRiverboatCasino,inElizabeth,Indiana,allegingthatthecasino,awarethatKephartwasapathologicalgambler,knowinglyenticedherintogamblinginordertoprofitfromheraddiction.KepharthadfiledforbankruptcyaftergoingbrokegamblinginIowa,andmovedtoTennessee.Butaftersheinheritedcloseto$1million,CaesarsbeganinvitinghertotheIndianariverboatcasino,whereshegambledawaythatinheritanceandmore.Whenthecasinosuedherfordamagesonthemoneysheowed,Kephartcountersued.ShedeniedthebasisoftheCaesarssuitonnumerousgrounds,includingthatbygivingher“excessiveamountsofalcohol…andthenclaimingthatitwasinjuredbyheractionsorinactions,”CaesarswaivedanyclaimitmighthavehadfordamagesunderIndianalaw.AlthoughKephartultimatelylosthercountersuit,thecasewentallthewaytotheIndianaSupremeCourt,whichruledin2010thatthetrialcourthadbeenmistakenindenyingCaesars’smotiontodismisshercounterclaim.“Theexistenceofthevoluntaryexclusionprogram,”thejudgewrote,referringtotheoptionIndianaofferspeopletobanthemselvesfromcasinosinthestate,“suggeststhelegislatureintendedpathologicalgamblerstotakepersonalresponsibilitytopreventandprotectthemselvesagainstcompulsivegambling.”(Caesarsdidnotrespondtorepeatedrequestsforcomment.)

NoffsingerhadbeenplanningtoretirebeforehereceivedStacyStevens’sphonecall.ButafterhearingthedetailsofScottStevens’ssituation—whichhadfarmoreseriousconsequencesthanhisprevioustwocases—heeventuallychangedhismind.Unlikeinhisearliergamblingcases,however,hedecidedtoincludeaproducts-liabilityclaiminthisone,essentiallyarguingthatslotmachinesareknowinglydesignedtodeceiveplayerssothatwhentheyareusedasintended,theycauseharm.



Infocusingonthequestionofproductliability,Noffsingerwasborrowingfromtherulebookofearlyantitobaccolitigationstrategy,which,overthecourseofseveraldecadesandcountlesslawsuits,ultimatelysucceededingettingcourtstoholdtheindustryliableforthedamageitwroughtonpublichealth.Noffsinger’shopewastodothesamewiththegamblingindustry.WhenNoffsingerfiledtheStevenslawsuit,JohnW.Kindt,aprofessorofbusinessandlegalpolicyattheUniversityofIllinoisatUrbana-Champaign,describeditasapotential“blockbustercase.”

VENBYTHEESTIMATESoftheNationalCenterforResponsibleGaming,whichwasfoundedbyindustrymembers,1.1to1.6percentoftheadultpopulationintheUnitedStates—approximately3millionto4million

Americans—hasagamblingdisorder.ThatismorethanthenumberofwomenlivingintheU.S.withahistoryofbreastcancer.Thecenterestimatesthatanother2to3percentofadults,oranadditional5millionto8millionAmericans,meetssomeoftheAmericanPsychiatricAssociation’scriteriaforaddictionbuthavenotyetprogressedtothepathological,ordisordered,stage.Othersoutsidetheindustryestimatethenumberofgamblingaddictsinthecountrytobehigher.

Suchaddictssimplycannotstopthemselves,regardlessoftheconsequences.“Whenyou’redealingwithanaddictactiveintheiraddiction,they’velostalljudgment,”saysValerieLorenz,theauthorofCompulsiveGambling:What’sItAll

About?“Theycan’tcontroltheirbehavior.”

Gamblingisadrug-freeaddiction.Yetdespitethefactthatthereisnoexternalchemicalatworkonthebrain,theneurologicalandphysiologicalreactionstothestimulusaresimilartothoseofdrugoralcoholaddicts.Somegamblingaddictsreportthattheyexperienceahighresemblingthatproducedbyapowerfuldrug.Likedrugaddicts,theydevelopatolerance,andwhentheycannotgamble,theyshowsignsofwithdrawalsuchaspanicattacks,anxiety,insomnia,headaches,andheartpalpitations.

Approximately3millionto4millionAmericansarepathologicalgamblers—andoneinfivegamblingaddicts



attemptssuicide.

Neuroscientistshavediscoveredcharacteristicsthatappeartobeuniquetothebrainsofaddicts,particularlyinthedopaminergicsystem,whichincludesrewardpathways,andintheprefrontalcortex,whichexertsexecutivecontroloverimpulses.“We’veseenadisregulatedrewardsystem,”saysJonGrant,aprofessorinthedepartmentofpsychiatryandbehavioralneuroscienceattheUniversityofChicago.“Thefrontalpartsofthebrainthattellus‘Hey,stop!’arelessactive,andpartsthatanticipaterewardstendtobestronger.”

Gamblingaddictsmayhaveageneticpredisposition,thoughaspecificmarkerhasnotyetbeenuncovered.Environmentalfactorsandpersonalitytraits—abiggamblingwinwithinthepastyear,companionswhogambleregularly,impulsivity,depression—mayalsocontributetothedevelopmentofagamblingproblem.Whateverthecauses,there’swidespreadagreementthatcertainsegmentsofthepopulationaresimplymorevulnerabletoaddiction.“Youcan’tturnonandturnoffcertainactivitiesofthebrain,”saysRezaHabib,apsychologyprofessoratSouthernIllinoisUniversity.“It’sanautomaticphysiologicalresponse.”

ScottStevens’sstoryisnotanomalous.Giventheguiltandshameinvolved,gamblingaddictionfrequentlyprogressestoaprofounddespair.TheNationalCouncilonProblemGamblingestimatesthatoneinfivegamblingaddictsattemptssuicide—thehighestrateamongaddictsofanykind.Therearenoaccuratefiguresforsuicidesrelatedtogamblingproblems,butthereareampleanecdotes:thepoliceofficerwhoshothimselfintheheadataDetroitcasino;theaccountantwhojumpedtohisdeathfromaLondonskyscraperindespairoverhisonline-gamblingaddiction;the24-year-oldstudentwhokilledhimselfinLasVegasafterlosinghisfinancial-aidmoneytogambling;and,ofcourse,Stevenshimself.



ROBLEMGAMBLERSAREworthalotofmoneytocasinos.Accordingtosomeresearch,20percentofregulargamblersareproblemorpathologicalgamblers.Moreover,whentheygamble,theyspend—whichistosay,lose

—morethanotherplayers.Atleastnineindependentstudiesdemonstratethatproblemgamblersgenerateanywherefrom30to60percentoftotalgamblingrevenues.

Casinosknowexactlywhotheirbiggestspendersare.Accordingtoa2001articleinTimemagazine,backinthe1990scasinooperatorsboughtrecordsfromcredit-cardcompaniesandmailinglistsfromdirect-mailmarketers.Oneofthelatter,titledthe“CompulsiveGamblersSpecial,”promisedtodeliverthenamesof200,000peoplewith“unquenchableappetitesforallformsofgambling.”Thecasinosusedtheserecordsandliststotargetcompulsivegamblers—asCaesarswasallegedtohavedonewithJennyKephart.

Thesedays,thecasinoshavetheirowninternalmethodsfordeterminingwhotheirmostattractivecustomersare.AccordingtoNatashaDowSchüll,anNYUprofessor



whospentmorethan15yearsresearchingtheindustry,culminatinginher2012book,AddictionbyDesign:MachineGamblinginLasVegas,70percentofpatronsnowuseloyaltycards,whichallowthecasinostotracksuchdatapointsashowfrequentlytheyplayelectronicgamingmachines,howlongtheyplay,howmuchtheybet,howoftentheywinandlose,whattimesofdaytheyvisit,andsoon.EachtimeapatronhitstheSpinortheDealbutton,whichcanbeasfrequentlyas900to1,200timesanhour,thecasinoregistersthedata.Evengamblerswhochoosetoforgoloyaltycardsdonotnecessarilyescapethecasino’swatchfuleye.Insomemachines,miniaturecameraswatchtheirfacesandtracktheirplayingbehavior.

SeveralcompaniessupplycasinoswithATMsthatallowpatronstowithdrawfundsthroughbothdebitandcash-advancefunctions,insomecaseswithouteverleavingthemachinestheyareplaying.(SomeofthecompaniesalsosellinformationontheirATMcustomerstothecasinos.)“Thewholepremiseofthecasinoistogetpeopletoexceedtheirlimits,”saysLesBernal,thenationaldirectoroftheadvocacyorganizationStopPredatoryGambling.“Ifyou’reusingthecasinoATM,it’slikepaintingyourselforange.”

Allofthesedatahaveenabledcasinostospecificallytargettheirmostreliablespenders,primarilyproblemgamblersandoutrightaddicts.Despitethosecustomers’biglosses—orrather,becauseoftheirlosses—thecasinoslurethemtoreturnwithperksthatincludecomplimentarydrinksandmeals,limoservice,freebiesfromthecasinogiftshop,golfexcursionsfortheirnongamblingspouses,andinsomecasesevenfirst-classairfareandsuitesinfive-starhotels.Theyalsoemployhostswhobefriendlargespendersandusespecialofferstoencouragethemtostaylongerorreturnsoon.Somehostsreceivebonusesthataretiedtotheamountcustomersspendbeyondtheirexpectedlosses,whicharecalculatedusingthedatagatheredfrompreviousvisits.AsRichardDaynard,alawprofessoratNortheasternUniversityandthepresidentofthePublicHealthAdvocacyInstitute,explainedatthegroup’sforumoncasinogamblinginthefallof2014,“Thebusinessplanforcasinosisnotbasedontheoccasionalgambler.Thebusinessplanforcasinosisbasedontheaddictedgambler.”



Casinoshavedevelopedformulastocalculatethe“predictedlifetimevalue”ofanygivenindividualgambler.Gamblersareassignedvaluerankingsbasedonthisamount;thebiggestlosersarereferredtoas“whales.”Thesegamblersbecomethecasinos’mostsought-afterrepeatcustomers,theonestowhomtheymarketmostaggressivelywithcustomizedperksandVIPtreatment.

CarolineRichardson,forexample,becameawhalefortheAmeristarCasinoinCouncilBluffs,Iowa.In2011alone,shelostnearly$2million,primarilyonthecasino’sslotmachines.Thecasinoallegedlyallowedhertogobehindthecashier’s“cage,”anareanormallyoff-limitstopatrons,tocollectcashtogamble.Itincreasedthelimitsonsomeslotmachinessothatshecouldspendmoreonsinglegames.Italsomadeanewmachineoff-limitstoothercustomerssothatRichardsoncouldbethefirsttoplayit.ManagementassignedRichardsonanexecutivehost,whoofferedherfreedrinks,meals,hotelstays,andticketstoentertainmentevents.

SoclaimedasuitbroughtagainstthecasinobyRichardson’semployer,ColomboCandy&TobaccoWholesale.Richardson,thecompany’scontroller,embezzled$4.1millionoverthecourseoftwoyearstosupporthergamblingaddiction.(In2014,Richardson,then54,wassentencedto14to20yearsinprisonforthecrime.)Thetheftsultimatelyputthecompanyoutofbusiness.ThesuitclaimedthatthecasinohadamplereasontopresumethatRichardson,whoearnedabout$62,000ayear,hadcomeintothemoneyshegambledbyfraudulentmeans.(ArepresentativeforAmeristarCasinodeclinedtocommentonthelawsuit.)

TheU.S.DistrictCourtforNebraskaagreedthatColombohadsufficientlyproveditsinitialclaimofunjustenrichment,whichthecasinowouldhavetodefenditselfagainst.Thesuit,however,stalledwhenColombo’spresidentandCEO,MonteBrown,andhiswife,Jenise,ranoutofmoneytopaytheirattorneysandhadtofileforpersonalbankruptcy.“Theyfoundsomeonewhohadtheaddictionandtheabilitytosteal,andtheyexploitedit,”MonteBrownsays.“Thecasinoembezzledfromusthroughanemployee.”Jeniseadds,“Forpeopletodothattootherpeople,it’sevil.”



ALKINTOTHEMountaineerCasinoinWestVirginia,andtheslotmachinesoverwhelmyou—morethan1,500ofthem,lightsblinking,animatedscreensflashing,thesimulatedsoundofclinkingcoins

blaringacrossthefloor.ThemachineshavenamessuchasKingMidas,RichDevil,CashIllusions,Titanic,andWizardofOz.It’saTuesdayafternoon,andhereinsidethewindowless,clockless,cavernousspace,afewpatronsareclusteredaroundacrapstable,aroulettetable,andahandfulofcardtables.Butthevastmajoritysitattheslotmachines.SlotsandvideopokerhavebecomethelifebloodoftheAmerican



casino.Theygeneratenearly70percentofcasinorevenues,accordingtoa2010AmericanGamingAssociationreport,upfrom45percentfourdecadesago.Threeoutoffivecasinovisitorssaytheirfavoriteactivityisplayingelectronicgamingmachines.Theirpopularityspellsprofitsnotonlyforcasinosbutformanufacturersaswell.InternationalGameTechnology,which,astheworld’slargestmanufacturerofslotmachines,hasmademanyofthe900,000-plusslotmachinesintheU.S.,earned$2.1billioninrevenuesinfiscalyear2014.(Thatyear,Gtech,anItalianlotterycompany,acquiredIGTandadopteditsnameina$6.4billiondeal.)

Thesearenotyourgrandma’sone-armedbandits.Today’selectronicgamingmachines,orEGMs,featurehighlysophisticatedcomputersdrivenbycomplexalgorithms.Old-fashionedthree-reelslotmachinesconsistedofphysicalreelsthatweresetspinningbythepullofalever.Eachreelwouldhave,forexample,22“stops”:11differentsymbols,and11blankspacesbetweenthesymbols,foratotalof10,648possiblecombinations.Ifthesamesymbolalignedonthepaylineonallthreereelswhentheystoppedspinning,theplayerwouldwinajackpotthatvariedinsizedependingonthesymbol.Theoddswerestraightforwardandnotterriblyhardtocalculate.

Thebigbreakthroughinslotstechnologywastheinventionof“virtualreelmapping”in1982.AccordingtoNYU’sSchüll,about20to30percentofslotmachinestodayresembletheold-fashionedones,withphysicalspinningreels.Butwhereeachreelstopsisnolongerdeterminedbytheforceofagoodpullofthelever.Rather,acomputerchipwithinthemachinechoosesanoutcomeusing“virtualreels,”whichmayincludedifferentquantitiesofthevarioussymbols—moreblankspaces,forinstance,andfewersymbolsforbigjackpots.Thephysicalreelsarenotspinninguntiltheyrunoutofmomentum,asitmightappear.Rather,thechips“tell”themwheretostopthemomentacustomerpullstheleverorpushesthebutton.Thusitispossibleforgamedesignerstoreducetheoddsofhittingabigjackpotfrom1in10,648to1in137million.Moreover,itisalmostimpossibleforaslotsplayertohaveanyideaoftheactualoddsofwinninganyjackpot,howeverlargeorsmall.



Virtualreelmappinghasalsoenabledadeliberatelymisleadingfeature,the“nearmiss.”That’swhenajackpotsymbolappearsdirectlyaboveorbelowthepayline.Theintentistogivetheplayertheimpressionofhavingalmostwon—when,infact,heorsheisnoclosertohavingwonthanifthesymbolhadnotappearedonthereelatall.Someslotmachinesarespecificallyprogrammedtoofferupthisnear-missresultfarmoreoftenthantheywouldiftheyoperatedbysheerchance,andthepsychologicalimpactcanbepowerful,leadingplayerstothink,Iwassoclose.Maybenexttime.(AsI.NelsonRose,aprofessoratWhittierLawSchoolandtheauthorofGamblingandtheLaw,haswritten,Nevadaregulationsoperateonthetheorythatasophisticatedplayerwouldbeabletotelltherealoddsofwinningbyplayingamachinelongenough.ThegamblingindustrymaintainsthatdeceptivenearmissesdonotoccurinNorthAmericangamingmachines,butasSchüllhasnoted,ithasdevelopedamorenarrowdefinitionofdeceptivenearmisses,whichstillallowsfor“subliminalinducements.”)

“Thebusinessplanforcasinosisnotbasedontheoccasionalgambler.Thebusinessplanforcasinosisbasedontheaddictedgambler.”

Researchhasshownthatanelevatednumberofnear-missresultsdoesincreaseplayingtime.Indeed,asearlyas1953,B.F.Skinner,thegodfatherofmodernbehaviorism,noted,“ ‘Almosthittingthejackpot’increasestheprobabilitythattheindividualwillplaythemachine.”Thiseffectisevenstrongerforgamblingaddicts,whosebrainsrespondtonearmissesmorelikewinsthanlikelosses.“Thenearmisses[trigger]thesamebrainresponseasawin,”saysRezaHabib,theSouthernIllinoisUniversitypsychologyprofessor.

Yetanotherfeaturemadepossiblebyvirtualreelmappingistheunevendistributionofwinningsymbolsamongvirtualreels,knownas“starvingreels.”Forinstance,a7maycomeupfourtimesonthefirstvirtualreelandfivetimesonthesecondbutonlyonceonthethird.Thefirsttworeelsarethusmuchmorelikelytohita7thanthelastone,butyouwouldn’tknowthisbylookingatthephysicalreels.Justasthe



crapsplayerexpectsthedicetobenumbered1to6andtheblackjackplayerexpectsthedealertouseconventionaldecksof52cards,it’snaturalfortheslot-machineplayertoexpectequaloddsoneachofthereels,saysRogerHorbay,aformergambling-addictiontherapistandanexpertonelectronicgamingmachines.“UnbalancedreeldesignenablesEGMstopresenttotheplayerscreenswhicharerichinsymbolsbutwhicharedesignedtolimitwinningcombinationsinamannerincommensuratewiththeappearanceofthescreen,”Horbaywritesin“UnbalancedReelGamingMachines,”apaperheco-authoredwithTimFalkinerin2006.

Astonishingly,thepatentapplicationforvirtualreelmapping,thetechnologythatmadeallthesedeceptivepracticespossible,wasstraightforwardaboutitsintendeduse:“Itisimportant,”theapplicationstated,“tomakeamachinethatisperceivedtopresentgreaterchancesofpayoffthanitactuallyhaswithinthelegallimitationsthatgamesofchancemustoperate.”CountriessuchasAustraliaandNewZealandhaveoutlawedvirtualreelmappingbecauseoftheharmtheinherentdeceptioninflictsuponplayers.

IntheUnitedStates,bycontrast,thefederalgovernmentgrantedthepatentforvirtualreelmappingin1984.IGTpurchasedtherightstoitin1989andlaterlicensedthepatenttoothercompanies.“Imaginesittingaroundaboardroomtable,thinkingofwhat’sfair,andcomingupwiththis,”saysKevinHarrigan,aco-directorofagambling-researchlabattheUniversityofWaterloo,inOntario.“Itjustseemswrongtome.”

TheNevadaStateGamingControlBoardapprovedvirtual-reelslotmachinesin1983.Interestingly,duringhearingsonthesubject,RayPike,theattorneyrepresentingIGT—theverycompanythatwouldsubsequentlybuytherightstothepatentforvirtualreelmappingandmanufacturehundredsofthousandsofslotmachines—calledtheseoverrepresentednearmisses“falseadvertising,”adding,“Thereisadeceptioninvolvedwiththiskindofamachine.”Yethealsostatedthatiftheboardapprovedvirtualreelmapping,“certainlywewouldliketobeabletodo



that”—createtheappearanceofnearmissesaboveandbelowthepayline—“becauseIthinkthatisacompetitiveadvantage.”

Ofcourse,classic,spinning-reelslotmachinesmakeuponlyafractionoftheelectronicgamingmachinesavailableatmostcasinos.Technologyhasevolvedsuchthatmanymachineslackphysicalreelsaltogether,insteadmerelyprojectingthelikenessesofspinningsymbolsontoavideoscreen.Thesemachinesallow“multiline”play,aninnovationthatbecamecommoninthe1990s.Insteadofbettingononesimplepayline,playersareabletobetonmultiplepatternsofpaylines—asmanyas200onsomemachines.Thisallowsformoreopportunitiestowin,buttheresultsareoftendeceptive.Forinstance,ifyoubet$1oneachoffivedifferentpatternsandthengeta$3payoutononepattern,themachinewilltreatyoulikeawinner,withflashinglightsandcongratulatoryvideosandtherequisiteclinkingofvirtualcoins.Thereality,ofcourse,isthatyouhavelost$2.

“Thebrainsomehowregistersawin,”KevinHarrigansays.“Nomatterwhatyouthink,physicallyyou’rebeingaffectedbythesethings—thelights,thesounds,thegraphics—asawin.Youcanget150to200ofthesefalsewins,whichwealsocalllosses,anhour.That’salotofpositivereinforcement.”

Lossesdisguisedaswinsalsocreatea“smootherride,”assomewithintheindustrycallit,allowingamachinetoslowlydepleteaplayer’scashreserves,ratherthantakingtheminafewlargeswipes.Becausethemachineistellingtheplayerheorsheiswinning,thegradualsiphoningislessnoticeable.

Relatedtothevideoslotmachinesarevideo-pokerterminals,whichIGTbeganpopularizingin1979.Thestandardfive-card-drawgameshowsfivecards,eachofferingplayerstheoptiontoholdorreplacebydrawingacardfromthe47remaininginthevirtualdeck.Thegamesrequiremoreskill—oratleastabasicunderstandingofprobabilities—thantheslotmachinesdo.Assuch,theyappealtopeoplewhowanttohavesomesenseofexertingcontrolovertheoutcome.

Butovertime,designersofvideo-pokermachinesdiscoveredthattheycouldinfluencegamblers’behaviorbymanipulatinggamedetails.Theysaw,forinstance,



patronsgoingmoreoftenforfourofakindthantheroyalflush,ararerbutmorelucrativehand,andtheyadjustedthemachinesaccordingly.Videopokeralsooffersitsownversionoflossesdisguisedaswins.Today’s“multihand”video-pokermachines—triple-play,10-play,andeven100-play—allowpatronstoplaymultiplehandssimultaneously.Thiscreatesanexperiencesimilartomultilineslots,inwhichplayersarelikelyto“winback”aportionofeachbetbyfrequentlyhittingsmallpotsevenastheyaresteadilylosingmoneyoverall.

Regardlessofthemachine—slots,videopoker—casinos’ultimategoalistomaximizeplayers’“timeondevice.”Thisiscrucialforcasinos,becausegivenenoughtime,thehousealwayswins.Localregulationstypicallystipulatethatmachinesmustpayout85to95percentofthebetsplacedonthem—whichmeansthatforevery$100insertedintothemachine,onaverage,theplayerwilllose$5to$15.Whatevertheexactfigure,thehouseoddsmakeitsuchthatifaplayerplayslongenough,shewilleventuallylosehermoney.

ECHNOLOGICALINNOVATIONShavenotonlyrenderedelectronicgamingmachineswildlyprofitable;theyhavealso,accordingtoexperts,madethemmoreaddictive.“They’recreatingproblemgamblersasmuchas

theyarepreyinguponproblemgamblers,”saysNatashaSchüll.

Acrucialelementinmoderngamblingmachinesisspeed.Individualhandsorspinscanbecompletedinjustthreeorfourseconds.Wanderthroughacasinoatalmostanyhour,andyou’llseepeopletransfixedbeforethemachines,theirfingerspoisedoverthebuttons,jabbingatthemlikeratsincages.Theabilitytoimmediatelyaccessadditionalcashatmanymachines“shrink[s]thetimethattranspiresbetweenaplayer’simpulsetocontinuegamblingandthemeanstocontinuegambling,thusminimizingthepossibilityforreflectionandself-stoppingthatmightariseinthatpause,”SchüllwritesinAddictionbyDesign.They’relulledintoa“stateofsuspendedanimationthatgamblerscallthezone.”



Formanygamblingaddicts,thezoneitselfbecomesmoredesirableeventhanwinning.Schülldescribesitas“astateofongoing,undiminishedpossibilitythatcametotrumpthefiniterewardofawin.”Thezoneprovidesanescapefromlife’sdailytroubles,frompasttrauma,andevenfromthegamblingdebtaccumulatingwitheachspin.Playershavegonefor14,15,16hoursormoreplayingcontinuously.Theyhavebecomesoabsorbedinthemachinesthattheylefttheir



youngchildrenunattendedincars,wetthemselveswithoutnoticing,andneglectedtoeatforhours.

Casinosandgamedesignershavecomeupwithmanywaystokeeppatronsattheirmachinesandplayingrapidly.Thechairsareergonomicallydesignedsothatsomeonecansitcomfortablyforlongstretches.Winningscanbeconvertedbacktocreditsorprintedonvoucherstoberedeemedlater.Waitressescomebytotakedrinkorders,obviatingtheneedforplayerstogetupatall.

Theall-consumingnatureofelectronicgamingmachinesalsospeedsuptheonsetofaddiction,whichhasearnedslotmachinesdescriptionssuchas“electronicmorphine”andthe“crackcocaineofgambling.”Schüllnotesthata2002studyshowedthat“individualswhoregularlyplayedvideogamblingdevicesbecameaddictedthreetofourtimesmorerapidlythanothergamblers(inoneyear,versusthreeandahalfyears),eveniftheyhadregularlyengagedinotherformsofgamblinginthepastwithoutproblems.”

Public-policyadvocatescompareslotmachinestocigarettes.Both,theyclaim,areproductsspecificallyanddeliberatelyengineeredtohaveaddictivepropertiesthatareknowntohookusers.“TheEGMandtobaccoindustriesintenduserstoconsumetheirproductsinpreciselythewaysthatdirectly,andwithoutfurthermediation,initiatethe[causal]chainthatresultsinknownharms,”writesJamesDoughney,aprofessorialfellowineconomicsatVictoriaUniversity,inMelbourne,ina2007paperpublishedintheInternationalJournalofMentalHealthandAddiction.

Regardlessofwhatever“pleasures”smokingandEGMsmayprovide,itistruethatbothproductsalsocausedeath…Almostallsmokerswillsmokepotentiallylethalamounts.TheEGMproduct,usedpreciselyasintended,willcauseuserstolosecontroloftimeandmoneyinsufficientnumbersfortheindustrytoflourish.



CigarettemanufacturerswereheldaccountableforthehealthproblemscausedbytheirproductafterJeffreyWigand,aformerexecutiveatthetobaccocompanyBrown&Williamson,spokeoutinthemid-1990saboutthewayhisfirmhadmanipulatedthelevelsofnicotinetomakecigarettesmoreaddictive.

TerryNoffsinger’slegalteamgraspedthesimilarities,goingsofarastobringonboardSharonY.Eubanks,anattorneywiththeWestVirginialawfirmBordas&Bordas.EubankswastheleadcounselfortheJusticeDepartmentinsuccessfulfederallitigationagainstthetobaccoindustrybetween2000and2005.ShejoinedNoffsingerinrepresentingStacyStevensafterheconvincedherthatthedeceptionusedbythegamblingindustryparalleledthatofthetobaccoindustry.“Thetobaccoandgamblingindustriesarebasicallyworkingfromthesameplaybook,usinghighlyengineeredproductstohookconsumers,”Eubankssays.

ASINOSAREHIGHLYATTENTIVEtotheirpatrons’“painpoints”—themomentswhentheyaregettingclosetogivingup.Thedatatheytrackinrealtimeonplayercardsalertthemtothesepainpoints:abigloss,forinstance,or

whencreditsstarttorunlowafteradryrun.Hostsarealsoonthelookoutfortellingbehavior,suchassomeonestrikingamachineinfrustrationorslumpingoveritindiscouragement.Whenhostsspotsomeoneinastatelikethis,theymayswoopinandofferavoucherforsomefreecredits,adrink,orperhapsamealintherestaurant,wheretheplayercantakeabreakuntiltheresistancepassesandhecanresumegambling.ThehostsmayalsoofferencouragingwordssuchasYou’llwinitback.“Tome,thatisthemostvileandvenalexampleofthecasino’sintentiontotrapandkeepcaptiveproblemandaddictivegamblers,”LissyFriedman,aseniorstaffattorneyatthePublicHealthAdvocacyInstitute,saidatthegroup’s2014forum.

Whenplayersdoexhaustalltheirfunds,casinoswillsometimesloanthemadditionalmoney.ThisiswhathappenedtoNoffsinger’sformerclientJennyKephart.In2006,shespentanentirenightgamblingatCaesarsRiverboatCasino,drinkingstrongalcoholicbeveragesprovidedforfree.Whensheeventuallycametotheendofhermoneyplayingblackjack,thecasinoofferedheracountercheck,



basicallyapromissorynote,toenablehertokeepplaying.Shesignedthecheckandgambledawaythemoney.Thathappenedfivemoretimes.Bytheendofthenight,shehadrackedup$125,000indebtowedtothecasino.Whenshecouldn’trepayit,thecasinosuedher.Noffsingercountersuedonherbehalf.AfterKephart’ssuitwasdismissed,thecasino’soriginalsuitwassettledconfidentially.

Playersbecomesoabsorbedinthemachinesthattheyleaveyoungchildrenunattended,wetthemselveswithoutnoticing,andneglecttoeatforhours.

Expertssaycasinosshouldbeawarethatwhentheyextendcredittolosingpatrons,theyarebydefinitionenablingproblemgamblers.“Anygamblerwhoseekscreditforcontinuedgamblinghasautomaticallyfulfilledone(andperhapsthree)ofthetendiagnosticcriteriaestablishedbytheAmericanPsychiatricAssociationfora‘pathologicalgambler’(aswellasfora‘problemgambler’),”wrotetheUniversityofIllinois’KindtintheMercerLawReview.“Theoretically,anygamblingfacilitygrantingcredit(particularlyover$200)toa[gambler]hasactualorconstructiveknowledgethatthegamblerisproblematic.”

Barsthatservealcoholtoinebriatedcustomerswhotheninjuresomeone,saybystrikingthatpersonwiththeirvehicle,canbeheldliableaccordingto“dramshop”laws.Casinosmightsimilarlybeheldliableforthefinancialconsequencessufferedbygamblerstowhomtheyextendcreditbeyondacertainlimit.In1994,thewidowofamanwhokilledhimselfafterrackingupinsurmountabledebtataMississippicasinosuedthecasinounderanextrapolationofdramshoplaws.AsherattorneytoldtheChicagoTribune,“FeedingEricKimbrowcreditwastheequivalentofgivinghimalcohol.”Buther$50millionlawsuitbecamemootwhenthecasinowentbankrupt.Sofar,noU.S.courthasruledonsuchacaseagainstacasinoandnostatelegislaturehasenactedcomparablelawsthatapplytocasinos.

Norshouldthey,accordingtothegamblingindustry.“Thereisnoliabilitytothecasino,”saysGeoffFreeman,thepresidentandCEOoftheAmericanGaming



Association.“Thereisasetstandardtodetermineinebriation.Nothingofthatsortexiststomeasurewhatthelevelistohavegambledtoomuch.”

TACYSTEVENS’SSUITchargedthattheMountaineerCasino,knowingwhatitknewaboutherhusbandandknowingabouttheharmthatcanbefallgamblingaddicts,“hadadutytoprotectScottStevensfromitself.”She

claimedthathissuicidewasforeseeablebythecasino,“yetnoattemptsweremadetointervene.”

DrawingontheresearchofNYU’sSchüll,theStevenssuitchargedthatMountaineerCasinoandIGT“haveknowinglyandintentionallytakenadvantageofcasinopatrons,exploitingandcausingharmtothem,byemployingandconcealingthepresentstateofgamblingwithslotmachines.”Itfurtherclaimedthat“modernslotmachinescreate,encourage,sustain,andexploitbehaviorsassociatedwithaddiction(e.g.,longer,faster,moreintensiveplay)”andthat“evenwhenplayedasintended,slotmachinescauseuserstosufferlossesandotherdetrimentaleffects.”ThisformedthefoundationofStacyStevens’scomplaintasaproducts-liabilitycase:Thedesignofthemachinesitself,thesuitalleged,wasresponsibleforherhusband’saddictionandeventualdeath.

MountaineerCasinoandIGTbothdeclinedrepeatedrequestsforcomment.Thecasino’sattorneysdidmaintaintheindustryposition,however,inamotiontodismisstheStevenscomplaint,assertingthat“nationallyutilizedandgovernmentapprovedslotmachinescannotbefounddefectivelydesignedorlackingproperwarningbecauseofaplaintiff’sunreasonablemisuse.”

MountaineerCasinofurthermaintainedthepartylinethatthedutytoprotectproblemgamblersfromgambling“belongstotheindividualgambler.”AstheAmericanGamingAssociation’sFreemanargues,“Theyshouldhavetheresponsibilitytoputthemselvesonalistnottobethere.”Heisreferringtotheoptionstatesofferresidentstovoluntarilyplacethemselvesonaself-exclusionlist,whichbansthemfromgamblingactivitiesinthatstate,andfromcollectingwinningsiftheyviolatetheban.(Itdoesnot,however,preventthemfromlosingmoneyiftheyvisitacasinodespitetherestriction.)Someexpertsbelieveself-



exclusionlistsarenoteffective,becausetheyseemtobeerraticallyenforced.Despitethepresenceofsophisticatedsurveillancetechnology,patronsarenotroutinelyscreenedfortheirself-exclusionstatus.“Ifaself-excludedgamblergoestoacasino,it’sokayforthemtolosemoney,butoncetheystartwinning,aworkertapsthegamblerontheshoulderandsays,‘You’rebeingarrestedfortrespassing,’ ”saysLorenz,theauthorofCompulsiveGambling.“Gotoanycasino,andthegamblerswilltellyouthisishappeningwithregularity.”

Giventhatcasinooperatorsandslot-machinemanufacturersareadamantthattheblameforgamblingaddictionresideswiththeindividual,itisnotsurprisingthatresearchbytheindustry-fundedNationalCenterforResponsibleGamingfavorsstudiesdirectedtowardconfirmingthisconclusion.Oftheapproximately$17millionthattheNCRGhasallottedforresearchsinceitsinceptionin1996,ithasnotspentanickelstudyingslotmachinesandtheimpacttheyhaveonthosewhoplaythem.(AccordingtoChrisReilly,aseniorresearchdirectorattheNCRG,thoughthemajorityofthegroup’sfundingcomesfromcommercialcasinosandmanufacturers,thecentermaintainsafirewallbetweenitscontributorsanditsresearchers.Membersoftheboardofdirectors,sheasserts,donotmakeresearchdecisions,andthecenterhasaseparatescientificadvisoryboard.)

“It’samistaketofocusonthemachine,becauseit’sjustthisthing,”Reillysays.Shesaysthattheproblemisrootedintheindividual.“Wedon’tknowwhythegamblerhascognitivedisorders”orotherissues.“That’swhatfeedstheiraddiction.”

That’snotright,saysRogerHorbay,theEGMexpertandformergambling-addictiontherapist.IndependentresearchnotfundedbytheNCRGhasshownhowfalsewins,nearmisses,andothersuchfeaturesinfluencegamblers,especiallythewaytheyperceiveexpectedoutcomes.“We’vebeentreatingthesepeoplelikethey’remessedup,butit’sthemachinesthataremessingthemup,”hesays.“Alotoftheso-calledcognitivedistortionswereactuallycausedbythemachines,not[becausetheusers]weremakingerrorsinthinking.Mostofthemaremakingcorrectconclusionsbasedondeceptiveinformation.It’sthelieofthetechnologythat’stheproblem.”



KeithWhyte,theexecutivedirectoroftheNationalCouncilonProblemGambling,saysthatalthoughtheindustryshouldhavearoleinresearchandpublic-educationefforts,itcannotbeeffectiveonitsown.(Thegroup,whichmaintainsaneutralstancetowardlegalgambling,receivesalargeshareofitsfundingfromtheindustry.)“Wecan’trelyonthepeoplewhoprovidetheproductandprofitfromittoeducatethepublicontherisks,”hesays.“Itneedstobeabroad-basedpublic-healtheffort.”

LMOSTADECADEafterthe1988IndianGamingRegulatoryActlaunchedthedramaticexpansionofcasinogamblingintonewjurisdictions,thefederalgovernmentappointedacommissiontostudytheimpactofthe

proliferation.Basedonfindingsthatsuggestedtherateofproblemgamblingcouldbetwiceashighwithina50-mileradiusofagamblingfacility,theNationalGamblingImpactStudyCommissionin1999recommended“apauseintheexpansionofgamblinginordertoallowtimeforanassessmentofthecostsandbenefitsalreadyvisible,aswellasthosewhichremaintobeidentified.”

Despitethatwarning,stateshavebeenunabletoresistthecontinuedexpansionofcasinogambling.Onereasonfortheongoinggrowthisthefinancialcloutoftheindustryitself.In2008,whenninestateswereconsideringgamblingmeasures,gamblingproponentsraisedmorethan$167million,comparedwithabout$106millionbygamblingopponents,accordingtoareportbytheNationalInstituteonMoneyinStatePolitics.“Predatorygamblinginterestsarenowthemostpowerfullobbyinthecountryonthestatelevelbecausegovernmentisapartnerwiththem,”saysLesBernalofStopPredatoryGambling.“Theyareliterallygoingoutandbuyingthepoliticalprocess.”

Indeed,expertsarguethatmanystateshavecreatedagovernment-gamblingcomplexthatimplicatestheminthecasinos’practices.Manystatesprovidetribalcasinoswithregionalmonopoliesinexchangeforrevenuesskimmedoffthetopofcasinoprofits—asmuchas30to40percentinsomeplaces.WestVirginiahasaproprietaryinterestintheslotmachines’software.Kansasactuallyownsthegamesandoperationsofnontribalcasinos.NewJersey,Delaware,andRhodeIslandhave



allprovidedfinancialbailoutstofalteringcasinos.“It’saprettysleazywaytofundstategovernment,”saysPeterFranchot,thecomptrollerofMaryland.“Wehavesetourselvesupinpartnershipwithapredatoryindustry…Theprofitscomemainlyfromagroupofaddictsthatarerecruitedandnurturedbycasinosuntilthey’reoutofmoney.”



Communitiestypicallybuildcasinosbasedonamirageoffalsepromises:thattheywillprovidejobs,fundschools,andboostthelocaleconomy.ButEarlGrinols,aneconomicsprofessoratBaylorUniversity,inTexas,andtheauthorofGamblinginAmerica:CostsandBenefits,hasestimatedthateverydollarofbenefitacasinobringstoacommunityentailsabout$3insocialcosts—whetherit’sincreasedcrime,ordecliningproductivity,ormorespendingonservicessuchasunemploymentpayments.“It’sasocialnegative,”Grinolstoldme.“Casinogamblingisbadfortheeconomy.Itshouldnotbeallowedbyanyone,anywhere,anytime.”

Indefenseofitsproductsandpractices,thegamblingindustryinsiststhatitisheavilyregulatedandthereforesafe.AstheattorneysforMountaineerCasinoarguedintheirmotiontodismisstheStevenssuit,“Gamingishighlyregulatedineachstatewhereitislegalized…Ifgamblingweredeemedunsafeortoposeunreasonableharmtocitizens…itwouldnothavebeenlegalized.”Butthis“ifit’slegal,itmustbesafe”argumentfailstoacknowledgetheinadequaciesofexistingregulations.“Regulatorsaresupposedtoprotectplayersandtheindustry,”saysI.NelsonRose,theauthorofGamblingandtheLaw.“Butit’sjustnotatthetopofthegovernment’sorindustry’sprioritiestobethinkingabouthowtoprotectplayers.”

Eachstateinwhichgamblingislegalhassetupitsowncommissiontoregulatetheindustry,butthereseemstobeasymbioticrelationshipbetweenregulatorsandtheindustry.Therearenumerousinstancesofformerregulators’beinghiredbycasinosorothergamblinginterests.Manygaming-commissionmembers—includingthosewhoapproveapplicationsforcasinolicenses—areadvisedbyconsultantsforprivatecompaniesalsooncasinopayrolls.“Ithinksocietyingeneralhasbeenledtobelievethatthisisahighlyregulatedandfairindustrybecausetheregulatorstesteverything,”RogerHorbaysays.“Buttheywouldbeshockediftheyknewevenslotmachinesdon’thavetocomplywithconsumer-protectionlaws.”

Horbaypointstoinformedchoiceasthecentraltenetofconsumerprotection,whichiswhywhenyouapplyforaloan,thebankhastotellyoutheinterestrateandhowit’scalculated.It’swhymanystatelotterieshavetodisclosetheirodds,andit’swhyeventhecontestsonthebacksofcerealboxeslistthechancesofwinninga



prize.Yetsuchessentialdisclosureisnotrequiredofelectronicgamingmachines.“Thesemachinespresentallsortsofdeceptivetradepracticesthatwouldn’tbeallowedinanyotherindustry,noteveninothergamblinggames,”hesays.“Thestandardforgamefairnessisnonexistentonslots.”

Asithappens,theNevadaStateGamingControlBoardaddressedexactlythisquestionduringits1983hearingsonvirtual-reeltechnology.AsRichardHyte,thenaNevadacommissioner,explained,ifslotmachinesweretodiscloseaplayer’soddsofwinningapayout,thatwould“takeawaythemystery,theexcitementandentertainmentandriskofplayingthosemachines.”

NJUNE,THEWESTVIRGINIASUPREMECOURTOFAPPEALSruledonStacyStevens’ssuit,determiningthat“nodutyofcareunderWestVirginialawexistsonthepartofmanufacturersofvideolotteryterminals,orthecasinosinwhichtheterminals

arelocated,toprotectusersfromcompulsivelygambling.”Theopinion,writtenbyJusticeBrentBenjamin,declaredthatelectronicgamingmachines

existinWestVirginiafortheexpresspurposeofprovidinganeconomicboontotheStateanditspoliticalsubdivisionsintheformofincreasedpublicrevenues,tothecitizenryintheformofenhancedemploymentopportunities,andtotheracetrackindustryfortheadditionalbenefitofthedependentlocaleconomies.

WestVirginiamighthavebeenadifficultvenueinwhichtomakeStevens’scase.Thestatehasaproprietaryinterestintheslotmachines’software,andlegalizedgamblingprovidedmorethan$550millioninfiscalyear2014,accordingtotheRockefellerInstituteofGovernment.(Forthesakeofcomparison,thestate’stotaltaxrevenueswereonlyabout$5billion.)Littlewonderthatthecourt’srulingfocusedonthe“economicboon,”“increasedpublicrevenues,”and“enhancedemploymentopportunities”providedbygambling,asopposedtothestate’sresponsibilitiestoproblemgamblers.AsSharonEubanks,Noffsinger’sco-counsel



ontheStevenssuit,notes:“Whatthistellsusisthestatesareaddictedtogamblingthemselves.Theyseemunwillingtodealwiththesocialcosts.”

LesBernalofStopPredatoryGamblingagreesthatthecloserelationshipbetweenthestateanditsgamblinginterestswascrucial:“Idon’tthinkithassomethingtodowithit;Ithinkithaseverythingtodowithit.EssentiallywhattheWestVirginiaSupremeCourthassaidisthatgamblinginterestsinWestVirginiaareimmunefromliability.”

InWestVirginia,Indiana,andotherstates,thecourtshavedeferredtothe

statelegislatures’intentionsintheirdecisions,butthelegislatorsdon’t

alwaysknowbetter—inpartbecausetheymayhavebeeninformed

principallybygamblinginterests.FormerWestVirginiaHouseMajority

LeaderRickStatonhasexpressedregretoverhisroleinexpanding

legalizedgamblinginthestate.“Ithinkwegot,nopunintended,played,”

hetoldtheCharlestonGazette.He’snotalone.StanRosenberg,the

presidentoftheMassachusettsSenate,helpedleadhisstate’sdriveto

legalizecasinosin2014despitebeingunawareofnearmisses,falsewins,

andotherEGMpractices.“Idon’tknowtheengineeringandscienceofit,”

headmits.

Noffsingerconcludesthatthis“isbasicallytheendofoureffortsinWestVirginia.”Buthebelievesthemovementtoholdcasinosliableforproblemgamblingisonlybuildingmomentum:“Oneofthethingsthathashappenedisthatthepublicislearningmoreaboutit.Therehavebeenmorepeoplewhohavelostalotofmoney,therehavebeenmorepeoplewhohavehadtofilebankruptcy,therehavebeenmorepeoplewhohaveembezzled,therehavebeenmorepeoplewhohavecommittedsuicide.What’samazingtomeisthatnotonetimehastheevidencethatweallegedinourcomplaintbeentestedinacourtoflawwithsworntestimonyandatrialandaruling.”

Andthat,accordingtoseveralexperts,iswhatitwillprobablytake—acourttrial,whichwouldopenaccesstoprivateindustrydocuments.“Theindustryknowsif



anycourtgetstothepointofdiscovery,they’reinrealtrouble,”saysKindt,fromtheUniversityofIllinoisatUrbana-Champaign.“Theyknowwhatthey’vegotintheirmarketingplansandtheirdocuments.Theycannotaffordtohavethatmadepublic,becauseitwouldconfirmwhateverybodyknows:thatone-totwo-thirdsoftheirincomecomesfromtheroughly10to20percentoftheircustomerswhoarepathologicalandproblemgamblers.”Kindtcontinued,“TheStevenscaseisgettinggoodpublicityandnationalrecognition.Themorelawyersreadaboutit,themoretheyaregoingtostartsmellingbloodinthewater.Itjusttakesforacasetobebroughtupintherightjurisdiction.”

NHISLASTCHRISTMAS,shortlybeforehelosthisjob,ScottStevensdidnotbuyhiswifeorthreedaughtersanypresents,andhecouldn’tbringhimselftoopenthepresentstheyhadboughthim.Hedidn’tfeelthathe

deservedthem,andhegaveinonlyafterhisdaughtersbeggedhim.Aphotographofhimlaterthatweek,whenhewasdeep-seafishinginCaboSanLucas,aplacethatusuallybroughthimhappiness,revealstheheavinessinhisexpression—hiseyesdefeated,hissmilegone.

Inthemonthsafterhewasfired,StevenstriedtakingtheantidepressantPaxilandsawatherapist,buthedidnotadmittoStacythathewasstillgamblingalmosteveryday.Asspringturnedintosummer,heknewthatchargesfromtheIRSwereforthcomingfollowingitsinvestigationintohisembezzlementandthatevenafterservingtimeinprison,hewouldlikelystillbeonthehookforthehundredsofthousandsofdollarsheowedinbacktaxesandpenalties.Hisformeremployerseemedclosetopressingcharges,havingputthepoliceonnotice.Hewouldneverbeabletoworkinthefinancialsectoragain.Oncetheaffairhitthepapers,hisfamilywouldbedraggedthroughthegantletofsmall-towngossipandcensure.Hecouldseenowaytosparethemotherthantosacrificehimself.

Bymid-afternoononAugust13,2012,Stacyhadstartedtoworry.Whyhadn’tStevensrespondedtohertexts?Thatwasn’tlikehim.Shetextedhimthattheywouldeatdinnerearlytoaccommodatethegirls’eveningactivities.“Whyaren’t



youansweringme?”shetexted.Butshegotnoresponseuntilaboutanhourlater,whenhesenthislasttexttoher:“Iloveyou.”

Distressed,Stacyresponded,“Honey,Iloveyou.Pleasecomehome.”Shetelephonedhistherapisttoaskwhethershehadseenhim,buttonoavail.

Shortlyafterthat,Stacy’sphonerang.ItwasTimBender,theClevelandtaxattorneyhelpingStevenswithhisIRStroubles.Stevenshadjustcalledhim.Benderhadtriedtotalkhimoutofkillinghimself,butStevenshadhungup.Bendersaidhewouldcall911.

AllStacycoulddowaspray:“Please,God.Please,please,please.Letthingsbeokay.”

Thensheheardsirens.Lotsofthem.

PoliceofficersfromtheneighboringtownofWintersvillearrivedatthesoccerfieldswithinsixminutesofStevens’sown911call.TheyfoundStevenssittingontherailroadtiebyhisJeep.Twosheriff’sdeputiesandanOhiohighwaypatrolmanalsopulledintothecomplex.

TheyspoketoStevensacrossthegravelparkinglot.

“Standup.Showusyourhands.”

ButStevenswasnotgoingtobackdown.Thiswashisfamily’sonlychance,hisfinalgamble.

Heraisedthemuzzleoftheshotguntohischest,reachedforthetrigger,andsqueezed.

how casinos enable gambling addicts - the atlantic€¦ · money appeared from his occasional wins,...

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