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THE SOCIAL COSTS OF CASINO GAMBLING FOR OHIO: A REVIEW OF WHAT IS KNOWN AND ESTIMATES OF FUTURE EXPENSES

Prepared for: The Greater Cleveland Partnership and Selected Cincinnati Area Businesses

Jun Koo, Ph.D. Abigail Horn, M.A.

Mark S. Rosentraub, Ph.D. with

Loreen Rugle, Ph. D.

Maxine Goodman Levin College of Urban Affairs Cleveland State University

1717 Euclid Avenue Cleveland, Ohio 44115

Maxine Goodman Levin College of Urban Affairs 1

TABLE OF CONTENTS

EXECUTIVE SUMMARY .............................................................................................2 INTRODUCTION........................................................................................................6 GAMBLING IN THE UNITED STATES TODAY .................................................................8 WHO GAMBLES?..................................................................................................8 PREVALENCE OF PROBLEM AND PATHOLOGICAL GAMBLING.....................................9

GAMBLING IN OHIO TODAY .....................................................................................13 PROBLEM GAMBLING IN OHIO: HOTLINE DATA ......................................................13 ESTIMATING THE EXISTING PREVALENCE OF GAMBLING DISORDERS AMONG OHIOANS AND THE INCREMENT FROM NEW CASINOS ...........................................................15

SOCIAL ISSUES ASSOCIATED WITH GAMBLING ADDICTION DISORDERS: INSIGHT FROM NATIONAL RESEARCH ......................................................................19 BANKRUPTCY ....................................................................................................19 CRIME...............................................................................................................22 UNEMPLOYMENT AND LOSS OF PRODUCTIVITY .....................................................24 SOCIAL SERVICE COSTS.....................................................................................25 ILLNESS ............................................................................................................26 SUICIDE ............................................................................................................28 DIVORCE, ABUSE, AND OTHER FAMILY COSTS .....................................................29 NEGATIVE SOCIAL OUTCOMES AND CASINOS: SUMMARY ......................................31

CASINOS AND OHIO: AN INNOVATIVE RESEARCH APPROACH FOR UNDERSTANDING THE IMPACT OF CASINOS IN OHIO ON SELECTED SOCIAL PROBLEMS................................33 CASINOS IN SURROUNDING STATES AND OUTCOMES FOR OHIO COUNTIES.............34 CONTROLLING FOR INITIAL DIFFERENCES BETWEEN CASINO AND NONCASINO COUNTIES: COMPLEX MODELS AND MULTIPLE REGRESSION ANALYSES .................43 THE EFFECT OF CASINOS ON COUNTY BANKRUPTCY AND CRIME RATES: SUMMARY47

MITIGATING THE COSTS OF GAMBLING DISORDERS ..................................................49 AVAILABILITY OF TREATMENT..............................................................................49 RECOMMENDATIONS: POLICES TO MITIGATE THE SOCIAL COSTS ...........................51

CONCLUSION ........................................................................................................54 APPENDIX: FULL RECOMMENDATIONS TO MITIGATE SOCIAL COSTS OF GAMBLING ......58 STRATEGIC PLANNING AND MONITORING .............................................................58 REGULATION AND POLICY ...................................................................................60 RAISING PUBLIC AWARENESS .............................................................................61 TRAINING FOR PROFESSIONALS AND INDUSTRY ....................................................62 HELPLINE, INNOVATIVE PRACTICE AND ONLINE RESOURCES .................................64 INDICATED INTERVENTIONS.................................................................................65

The Social Costs of Casino Gambling for Ohio


EXECUTIVE SUMMARY

This study seeks to provide answers to three important questions to help Ohio’s

leaders and voters understand the social effects of opening casinos in the state. First,

would the proximity of casinos induce higher levels of gambling problems in Ohio’s adult

population? Second, do people with gambling addictions have more social, legal,

physical, or financial problems than the general public? Third, what is the cost to the

State of Ohio to address the needs of people who are either problem or pathological

gamblers? Related to the issue of treatment expenditures is the cost of any

dysfunctional behavior that results from compulsive gambling, and this too is considered.

EXISTING AND FUTURE NUMBER OF OHIOANS WITH CHRONIC GAMBLING PROBLEMS

It is estimated that between two and five percent of Ohio’s adult population are

problem or pathological gamblers. Given the existing distribution of casinos adjacent to

or in close proximity to Ohio, it is reasonable to expect that 252,000 Ohioans (three

percent of the adult population) will suffer from a gambling addiction sometime during

their life. Ohio currently provides less than $400,000 to provide treatment and

counseling services to help these individuals. Opening casinos in seven Ohio cities

could lead to an additional 109,000 residents developing a gambling disorder at some

point in their life (reaching a total of more than four percent of the adult population).

CHRONIC GAMBLING AND PERSONAL FINANCIAL ISSUES

People with gambling addictions do have higher debt levels and are more likely

to file for personal bankruptcy protection. However, a statistical link between the

presence of casinos and personal bankruptcy filings has not been found. Unclear

patterns exist and in some instances bankruptcy rates actually declined in counties with

casinos. One possible explanation for this outcome is that some people who might have

been forced to declare bankruptcy found jobs in the gaming or entertainment industry

after a casino opened offsetting any negative outcomes related to problem or

pathological gambling activities.



People with chronic gambling problems have higher unemployment rates, and

research indicates that gambling addictions account for eight percent of their

employment problems. The effect on countywide unemployment rates, however, is not

clear. In some counties with casinos, overall unemployment rates either declined or

were unaffected by the casino’s presence. The jobs lost by those with a gambling

disorder may be offset by the jobs created by the casino. Existing research, then, has

not found any pattern with regard to unemployment levels and the presence of a casino.

CHRONIC GAMBLING AND SOCIAL AND HEALTH PROBLEMS

People with gambling addictions are more likely than nongamblers to have

committed a crime and to have been incarcerated during their lifetimes. Problem and

pathological gamblers are very different demographically from nongamblers; this subset

of the population is statistically more likely to commit a crime regardless of their

gambling status. In addition, research does not validate a statistical link between the

presence of casinos and higher crime levels. While several studies note that the number

of reported crimes is sometimes higher after a casino opens, these same studies fail to

account for the larger number of people present in the county after a casino opens. A

casino in a major metropolitan center can attract 25,000 visitors a day; this would

change the opportunities for criminal activity but not necessarily the rate of criminal

activity.

While individuals with a gambling disorder clearly have a higher incidence of a

number of illnesses and physical ailments, higher suicide rates, higher divorce rates, and

increased levels of familial abuse, research studies have not been able to isolate the

causality between their addiction and these other social ills. While pathological

gamblers should be considered a highrisk population for certain illnesses and suicide,

research does not exist that shows gambling necessarily caused these other problems.

In some cases, these problems may have preceded a gambling problem and in other

cases the causality is unclear given the coexistence of other problems such as chemical

dependencies. Research has shown no correlation between divorce rates and the

presence of casinos or between suicide rates and the presence of casinos.



CHRONIC GAMBLING AND SOCIETAL COSTS

Given the uncertainty regarding a causal link between pathological gambling

disorders and social costs, and the possible offsetting benefits that result from new

employment opportunities, it is not prudent to fix a net cost figure on the higher levels of

problem gamblers in the state. Various state and national studies have attempted to

quantify the societal cost per problem and pathological gambler. They differ on

methodology; sometimes confuse real costs with transfer payments or private

consequences; omit certain costs for which it is difficult to assign a financial value; and

often fail to include benefits to those who secure jobs, which has to be part of any

benefitcost analysis. For example, two studies using the same data from Wisconsin

had a difference of $6,495 between their estimates of the annual societal cost per

“compulsive” gambler. Estimates of the annual cost to society per pathological gambler

range from $1,226 to $10,920. Clearly, these analyses make extremely different

assumptions to calculate their costs and provide little clear direction for policy.

Furthermore, all of these cost estimates rely upon causalities that the available scientific

literature does not sustain.

CHRONIC GAMBLING AND THE COST TO OHIO

While the methodologies used to calculate the societal costs of a pathological

gambler are problematic, particularly given the lack of clear causality between gambling

addiction and its associated costs, the very real problems of compulsive gamblers

cannot be ignored and adequate financing needs to exist to provide the services needed

by Ohioans with a gambling disorder as well as those who might develop a gambling

problem.

Adequate financing is not currently in place for those Ohioans who already have

compulsive gambling problems. While this study confirms past research showing that

casinos do not introduce communitywide costs of higher crime and bankruptcy rates,

casinos are associated with higher numbers of problem and pathological gamblers.

Research shows that these individuals can face a number of financial, legal, physical,

and emotional problems. Whether or not individuals with gambling disorders are

affecting a community’s overall social cost levels, their addiction needs to be addressed.



Currently Ohio has made a very modest commitment to helping its residents with

gambling addictions. Ohio provides a total of $350,000 a year from lottery revenues to

fund five pilot projects, some training of counselors, and to maintain a hotline. That

represents approximately three cents per Ohio resident. In comparison, Oregon spends

79 cents per resident on funding for problem gambling mitigation. To match Oregon’s

funding level Ohio would have to provide $9,023,000 for its problem gambling mitigation

efforts.

Oregon’s funding level, however, may not be sufficient to provide the ideal of a

full continuum of services of research, prevention, outreach, and treatment. Nine million

dollars would only represent $24 per problem and pathological gambler (assuming Ohio

reaches 361,000 problem gamblers if casinos are opened). In comparison, several of

Canada’s provinces are known for having more complete problem gambling services.

Ontario provides approximately $25 million annually, the equivalent of $2.10 per

resident. Saskatchewan provides $4.25 million annually, the equivalent of $4.30 per

resident.

To mitigate the problem gambling issues that already exist in Ohio, the state

should consider funding a broad range of measures at $2 per resident, or $22,850,000

annually. If new casinos are opened and the number of problem gamblers increases to

361,000, then Ohio must insure that there are sufficient funds to treat the potential range

of affected individuals. Currently, and in the absence of local casinos, Ohio has a large

number of pathological gamblers who do not have access to needed services; their

gambling activities in other states and countries supports programs for residents of those

other areas. The social cost of adequate mitigation services is at least $22.9 million a

year, rising to $29.7 million if new casinos are opened and funding levels are maintained

to provide services to the projected levels of new compulsive gamblers.



INTRODUCTION

This study seeks to provide answers to three important questions to help Ohio’s

leaders and voters understand the social effects of opening casinos in the state. First,

would the proximity of casinos induce higher levels of gambling problems in Ohio’s adult

population? Second, do people with gambling addictions have more social, legal,

physical, or financial problems than the general public? Third, what is the cost to the

State of Ohio to address the needs of people who are either problem or pathological

gamblers? Related to the issue of treatment expenditures is the cost of any

dysfunctional behavior that results from compulsive gambling, and this too is considered.

Valid measurements of the economic benefits and social costs of casinos are

needed to help state and community leaders and voters determine if legalized gambling

is appropriate and beneficial. It is not a simple task to produce scientifically valid

measures of either the economic benefits or the social costs produced by expanded

gambling options in a casino. The measurement of economic benefits, including job

creation and new tax dollars, must consider the opportunities for people to spend their

money in the same area in the absence of a casino. If a casino only transfers economic

activity, then there could be no real economic benefit from a new facility. However, if a

casino attracts local patrons who would have gone to another state to gamble or

increases overall entertainment spending, then economic benefits can result. Similarly,

if the presence of a casino leads to induced levels of risky or illegal behavior as a result

of problem or compulsive gambling addictions, then individuals, families, and the public

sector can suffer real costs. Alternatively, if gambling is not the cause of risky or illegal

behavior but a symptom of an individual’s other social or psychological problems, then

the presence of gambling may not induce any new costs. These examples highlight the

need for precise research strategies and sophisticated analytical tests to measure the

benefits and costs of casino gambling or any other public policy matter.

The first objective of this report is to establish how many additional people will

develop gambling addictions if casinos are opened in Ohio. The ubiquitous nature of

gambling options already available to Ohioans predicts that the state has a sizeable

population of people with gambling disorders. Isolating the effects of new casinos on

the prevalence of gaming problems for Ohioans is complicated by the fact that the

state’s residents already have access to gaming centers in adjacent states and



throughout the country and Canada. There are also a number of gaming options

available through the Internet, and Ohio itself offers legal gambling options (horse racing

and the lottery). With the wideranging access to gaming, there are already a number of

individuals with gambling pathologies in the state of Ohio who need treatment and

assistance. While any new casino in Ohio will increase the availability of gaming

opportunities and reduce the distance many residents of the state have to travel to

access a casino, the presence of new gaming centers in Ohio will not introduce

gambling into the state. Therefore in terms of predicting the increased social problems

that might result from new gaming centers in Ohio, the first research issue that must be

addressed is the impact of reduced commuting time to casinos on the number of people

in Ohio with gambling disorders. It is possible that the presence of a casino could lead

to higher rates of addictive gambling as a result of the reduced commuting time to

casinos for a larger proportion of the state’s residents.

The second objective is to document the resulting problems and costs that might

accrue as a result of a larger number of addicted gamblers living in the state. To

address this issue, a review of existing research was performed to determine if people

with gambling addictions generate social costs for themselves, their families, or the

public sector. After a careful review of existing research, the study provides a unique

and sophisticated statistical analysis that focuses on outcomes from gaming in Ohio and

adjacent states that already permit casino gambling within their borders.

The scientifically valid and precise research methods and methodologies used in

the study were designed to help Ohioans understand (1) the potential impact of gaming

facilities on the number of people with gaming problems and (2) the relationship and

impact of problem gaming on crime levels, divorce rates, unemployment levels, personal

bankruptcy rates, and other societal ills. Carefully structured research is needed to

validate any causal linkage between problem gambling and socially dysfunctional

behaviors. Similarly, careful research is needed to understand whether larger numbers

of people with gambling problems will generate real costs for a community or state.

The last section of the report suggests policies and programs to mitigate the

individual and potential community costs of problem gambling in Ohio given current

gambling habits and the increases that might arise with legalized casinos.



GAMBLING IN THE UNITED STATES TODAY

Legalized gambling is very common in the United States. Only two states,

Hawaii and Utah, do not offer some form of legalized gambling to their residents and to

entertain and attract tourists and visitors. As of mid2005, 41 states and Washington,

D.C. have established lotteries, and 37 states have some form of casinostyle gambling

(riverboats, racetracks with adjacent casinostyle games, casinos operated by Native

American tribal organizations, and independently owned, statelicensed casinos). The

extension of gaming across the country (and in Canada) has been driven by the popular

approval of gaming as a form of recreation, the almost universal involvement of

Americans in some form of gambling, and the longstanding preference for and use of

gambling taxes to support public services. Polls indicate that approximately 85 percent

of U.S. adults have gambled at least once in their lifetime and over 60 percent have

gambled in the past year. More than a majority of Americans have reported in numerous

surveys that they consider gambling as another form of entertainment.

In terms of linking government revenues to gaming, Thomas Jefferson discussed

the desirable use of some forms of gambling (lotteries and raffles) for public and private

purposes, but argued that other games of chance could lead to unfortunate social

outcomes. His views probably reflect the conundrum many feel exists when the value of

casino gambling is discussed. Does greater access to games of chance produce more

cases of addictive gambling and, consequently, to high levels of personal and social

costs, or is gambling a form of recreation that can be taxed to allow governments to

produce and deliver needed public services?

WHO GAMBLES?

A national gambling survey conducted in 1999 by the National Opinion Research

Center (NORC) at the University of Chicago found that 63 percent of the population had

gambled in the past year. Fiftyfour (54) percent of the respondents reported they had

played the lottery, and 26 percent indicated they had played a game of chance at a

casino. 1 A second national study (Welte) conducted in 19992000 found slightly higher

1 Dean Gerstein, et al., Gambling Impact and Behavior Study: Report to the National Gambling Impact Study Commission (Chicago, IL: National Opinion Research Center at the University of Chicago, 1999).



(but statistically insignificant) past year gambling rates with 66 percent of the population

playing the lottery and 27 percent gambling in a casino.

Those people who gamble in casinos spend far more money than do those who

purchase lottery tickets. The Welte survey asked the amount won or lost the last time an

individual played a given type of game. On average, lottery players won (or lost) $11

while casino players won (or lost) $143. 2

The same study also provided a view of the demographic characteristics of

casino gamblers. It found that men generally gamble more than women, particularly in

games of skill, cards, dice, and sports betting. Rates of casino gambling participation

increased with rising socioeconomic status from 17 percent of those in the lowest

quintile to 33 percent in the highest quintile. No statistically significant differences were

found in casino gambling participation rates related to an individual’s race or age. 3

PREVALENCE OF PROBLEM AND PATHOLOGICAL GAMBLING

The National Council on Problem Gambling defines problem gambling as:

All gambling behavior patterns that compromise, disrupt or damage personal, family or vocational pursuits. The essential features are increasing preoccupation with gambling, a need to bet more money more frequently, restlessness or irritability when attempting to stop, ‘chasing’ losses, and loss of control manifested by continuation of the gambling behavior in spite of mounting, serious, negative consequences.

“Pathological” and “problem” are the clinical terms used by treatment professionals to

classify addicted gamblers. The pathological classification identifies a more severe form

of addiction. The American Psychiatric Association (APA) Diagnostic and Statistical

Manual (DSMIV) has established a scale of criteria for classifying individuals as either

problem or pathological gamblers. If a person exhibits a tendency their score increases.

Three of the behaviors noted below indicates a problem gambling addiction, while five of

the behaviors indicate a pathological gambling addition.

• Preoccupation referring to those who are preoccupied with reliving past gambling experiences, handicapping or planning the next gambling venture, or ways of getting money with which to gamble, etc.

• Tolerance referring to the need to gamble with increasing amounts of money in order to achieve the desired excitement.

2 John W. Welte, et al, “Gambling Participation in the U.S.–Results from a National Survey,” Journal of Gambling Studies 18.4 (2002): 313337, 318; more recent data indicates at some Midwest riverboat casinos average amounts won and lost ranged from $155 to $223. 3 Welte, 332333;.



• Withdrawal referring to feelings of restlessness or irritability when attempts are made to cut down or stop gambling.

• Escape referring to those who gamble as a way of escaping from problems or relieving dysphonic moods.

• Chasing referring to “chasing one’s losses” by returning to gamble in order to get even.

• Lying refers to lying to family members, therapists, or others to conceal the extent of involvement with gambling.

• Loss of control describes repeated, unsuccessful attempts to control, cut back, or stop gambling.

• Illegal Acts – involves the commitment of illegal acts in order to finance gambling. • Risked Significant Relationship – refers to jeopardizing or losing a significant

relationship, job, or educational or career opportunity due to gambling. • Bailout describes relying on others to provide money to relieve financial

situations caused by gambling. 4

Researchers have developed multiple screening tools for determining if an

individual is at risk of being a problem or pathological gambler including the South Oaks

Gambling Screen (SOGS), the Diagnostic Interview for Gambling Severity (DIGS), and

the NORC DSM Screen for Gambling Problems (NODS). In terms of reviewing different

studies of the prevalence of gambling disorders, different rates can sometimes result if

different diagnostic tools are utilized. As a result, some crossstudy comparisons are

difficult as different research tools are sometimes used. Thus computing national or

regional prevalence rates can be compromised or require adjustments to reflect the use

of different assessment tools.

Numerous studies have been conducted over the years to estimate the

prevalence rates of problem gambling in various states and in the United States overall.

The APA 1994 Diagnostic and Statistical Manual estimated the prevalence of

pathological gambling at between one and three percent. In 1998, the Harvard Medical

School Division on Addictions estimated the prevalence of disordered gambling through

a metaanalytic research approach. Metaanalytic approaches try to synthesize results

from several studies; the most sophisticated of these sort of assessments adjust for the

possible use of different scales, measures, and research techniques within the individual

studies. Based on this one metaanalysis compilation, it was estimated that pathological

gamblers comprise 1.6 percent of the population. This is a lifetime rate describing the

likelihood that someone will experience disordered gambling at some time. The past

4 Gerstein, 16.



year rate, which represents the potential number of disordered gambling cases that are

active during the past 12 months, was 1.14 percent for pathological gamblers. 5

It is important to appreciate the differences in these two rates relative to any

assertions made with regard to the extent of gambling addictions in an area. If these

findings are used, then in any one year, 1.14 percent of the adult population is likely to

have a pathological gambling problem. The lifetime rate, 1.6 percent, is higher because

individuals are included who had a gambling disorder in the past. Because addictions

are generally considered a chronic disorder, they may have a problem in the future.

In 1999, NORC conducted a national telephone survey and a casino patron

survey to measure the prevalence of gambling disorders for their Gambling Impact and

Behavior Study. This study is the most complete analysis of national level prevalence

rates for problem and pathological gambling currently available. This study also focused

on the percentage of gamblers and nongamblers who experienced certain physical and

psychological disorders. It found that over a lifetime, 1.5 percent of the general

population is likely to become a problem gambler and 1.2 percent will be classified as

pathological gamblers. 6 If gambling addiction is a chronic disorder, the lifetime data

might be the best reflection of the general prevalence rate within the U.S. population.

Theories related to addictive behavior suggest cures are not possible. NORC also

calculated past year prevalence rates for problem and pathological gambling (0.7 and

0.6 percent, respectively).

The NORC study found that men (3.7 percent) were more likely than women (1.9

percent) to be either a problem or pathological gambler. The NORC study also found

that persons 65 years and older were substantially less likely to have a gambling

problem and that the combined prevalence rates for problem and pathological gambling

among African Americans (5.9 percent) were significantly higher than for whites (2.4

percent). 7

The Welte national telephone survey, conducted from 1999 to 2000, also found

that men were more likely to be problem gamblers than women and that minorities

(African Americans, Hispanics, and Asians) were more likely to be problem gamblers

than whites. This study also found that the prevalence of problem and pathological

5 Howard J. Shaffer, et al., Estimating the Prevalence of Disordered Gambling Behavior in the United States and Canada: A Metaanalysis (Boston, MA: Harvard Medical School Division of Addictions, 1997), iii. 6 Gerstein, 25. 7 Gerstein, 2628.



gambling declined significantly as socioeconomic status increased (from 5.3 percent in

the lowest socioeconomic quintile to 1.6 percent in the highest quintile). This study

found a higher overall lifetime rate of problem and pathological gambling than the NORC

study (3.5 percent compared to 2.7 percent). 8

8 Welte, 325327.



GAMBLING IN OHIO TODAY

While Ohio does not have legal casinos, its residents have no shortage of

gaming opportunities. Ohioans play the state lottery, frequent Ohio racetracks, support

charity bingos and raffles, bet on sports, and increasingly gamble online. They also

gamble in casinos. In addition to visiting destination cities like Las Vegas, Ohio

residents are surrounded by states that have opened gaming centers. Indiana’s facilities

are located in riverboats, three of which are within the Cincinnati metropolitan region.

Michigan’s landbased casinos in Detroit are easily accessible to Ohioans who live in

northwestern part of the state. West Virginia has three casinos that attract people from

the eastern parts of Ohio. Pennsylvania recently passed legislation that paves the way

for largescale video gaming in that state as well.

Available data suggests that Ohioans are no exception to the general gambling

patterns documented in the rest of the United States. A study commissioned by

Harrah’s Entertainment Inc. showed that the average Ohioan who gambles made three

trips to a casino in 2003. The same survey found that 19 percent (1.54 million) of the

state’s adults visited a casino at least once last year, down from 19.7 percent in 2002

and 21.9 percent in 2001. 9

PROBLEM GAMBLING IN OHIO: HOTLINE DATA

Through funding from the Ohio Lottery, the Ohio Department of Alcohol and

Drug Addiction Services (ODADAS) manages a problem gambling helpline (800589

9966). This phone number is printed on the back of lottery tickets and is posted at some

casino facilities. This selfreported data provides a view of the level of gambling

problems in Ohio. However, it is reasonable to assume that only a fraction of problem

gamblers access the hotline. Figure 1 shows the numbers of calls received each month

in 2004. It ranges from a low of 32 in April to a high of 60 in March.

9 These differences were again not statistically significant given the sampling errors associated with the sample sizes.



Figure 1: Calls to Gambling Hotline (2004)

0 10 20 30 40 50 60 70

January

February

March

April

May

June

July

August

Septem

ber

October

Novem

ber

Decem

ber

Callers to the hotline are asked to identify where they mainly gambled. The

distribution in Figure 2 provides a view of the gambling activities engaged in by those

with gambling problems. Thirtysix percent identified casinos (where they reported

playing slots, video poker, roulette, etc.) and 28 percent identified the lottery (lotto,

scratchoff, etc.). Fiftythree callers (9 percent) cited Internet gambling, and 9 percent

(50 callers) mentioned various card and video slot machines not played in casinos but at

bars, truck stops, video poker establishments, and other locales.

It is not clear if the prevalence of calls from casino gamblers is due to the extent

of the gambling pathology created by casinos or because that is where the hotline is

best advertised. Further, there are no data available from people who seek help from

private service providers or other public agencies. While limited in its scope and the

conclusions that can be drawn from the observed patterns, the information illustrates

that Ohioans are involved in a variety of gambling activities and that people have

realized that they have an addiction requiring professional interventions.



Figure 2: Gambling Location (2004 Hotline Callers)

200 158

53 50 25 24 17 12 9 6 5

0 50 100 150 200 250

casinos

lottery

internet

noncasinos

video/slots

horse/dog tra

ck

bingo halls

not known

numbers/bookies

sports

other

private homes

ESTIMATING THE EXISTING PREVALENCE OF GAMBLING DISORDERS AMONG OHIOANS AND THE INCREMENT FROM NEW CASINOS

This study aims to understand the potential social impacts of legalizing casinos in

Ohio. To do that, the study must compare the current prevalence rate of problem and

pathological gambling in Ohio and the prevalence rate that may exist if casinos are

permitted to operate within the state. Ideally, a new measurement of the current rates of

problem gaming in Ohio would have been performed to determine if there are any

statistically significant differences from the national rates. (Unfortunately, time and

resources did not allow for a new survey.) Instead, the NORC data were used to

estimate the level of gaming disorders in Ohio. The rates found by NORC were within

the range accepted by the National Council on Problem Gambling. In addition, NORC

provides statistics on how prevalence rates change depending upon proximity to a

casino. These statistics then permit a comparison of the estimated prevalence rate

within the state given the existing locations of gaming centers in adjacent states to the

future rate if Ohio expanded access to casinos.

Table 1: Lifetime prevalence rate of problem gamblers by proximity to casinos Proximity to Casino Problem Gamblers Pathological Gamblers 050 miles 2.3% 2.1% 51250 miles 1.2% 0.9% 250+ miles 1.2% 1.3%

Source: National Opinion Research Center (NORC)



These data are from 1999 but are the most reliable and the product of one of the

most extensive national evaluations ever performed. As gambling has become more

accessible (Internet, video slots in bars, stores, and restaurants, etc.) differences by

proximity to a casino may not be as large. The Welte survey found that the casino effect

on increasing rates of pathological gaming may only extend to those within 10 miles of a

casino (rather than the 50 miles reported by NORC); that research also pointed out that

there could be intervening variables such as addicted gamblers relocating to live closer

to a casino. 10 The overall prevalence rate of pathological and problem gambling may be

higher, and the effect of the casinos may be less.

The maps in Figures 3 and 4 provide an estimate of the percentage of problem

and pathological gamblers currently in Ohio based upon the NORC prevalence data by

proximity to a casino. The circles indicate the 50mile radius around neighboring states’

casinos that affect the prevalence rate in Ohio. The next radius (only seen as arcs on

the map) illustrates the 250mile span from the same casinos. All Ohioans currently live

within 250 miles of a casino. The estimated number of problem gamblers in Ohio is thus

137,182 (1.62 percent of the adult population). These data also suggest there are

115,165 pathological gamblers in Ohio (1.36 percent of the adult population). 11

Using the same methodology, it was possible to estimate how many more

Ohioans might become problem gamblers if casinos opened in the state. The estimate

produced was driven by the expectation that casinos would likely be located in seven

cities or areas: Cincinnati, Cleveland, Columbus, Dayton, Steubenville, South Point, and

Toledo. 12 Figures 5 and 6 show how the percentages of problem and pathological

gamblers would change. The estimated number of problem and pathological gamblers in

Ohio would grow, respectively, to 189,683 (2.24 percent of the adult population) and to

171,900 (2.03 percent of the adult population).

Opening casinos in Ohio could increase the number of problem gamblers by 52,502 and pathological gamblers by 56,736. This is based upon lifetime prevalence

rates, meaning these addictions would not appear overnight or even in the following year

but over time. Ohio could potentially have more than 109,000 additional adult residents

(1.3 percent of the adult population) develop a serious gambling addiction over time.

10 John W. Welte, et al., “The Relationship of Ecological and Geographic Factors to Gambling Behavior and Pathology,” Journal of Gambling Studies 20.4 (2004): 405423, 421. 11 Based upon population data from the 2000 US Census, Ohio’s 18 and over population is 8,467,999. 12 These cities were selected based upon Patrick Bero’s economic and fiscal analysis of the effect of casinos on the state.



Figure 3: Estimate of Pathological Gamblers Figure 4: Estimate of Problem Gamblers

What are the social consequences for Ohio of an estimated 109,000 additional

adult residents with serious gambling addictions? The next section reviews national

research on the social issues associated with problem and pathological gambling

including bankruptcy, crime, unemployment, divorce, illness, and suicide. Before

considering these social consequences readers are also reminded that in the absence of

new casinos in Ohio it is also possible that the number of pathological and problem

gamblers in the state will expand as a result of increasing access to gaming through the

Internet and possible new casinos opening in adjacent states. The increasing number of

problems gamblers will require greater public expenditures to offset potential costs and

that could occur at a time when Ohioans are still taking their gaming activities to other

states eliminating a revenue source and tax dollars from the state.



Figure 5: Estimate of Future Pathological Gamblers Figure 6: Estimate of Future Problem Gamblers



SOCIAL ISSUES ASSOCIATED WITH GAMBLING ADDICTION DISORDERS: INSIGHT FROM NATIONAL RESEARCH

The impacts of problem and pathological gambling can be high for individuals as well as for

their families, friends, and workplaces. Pathological gamblers can experience physical and

psychological stress and exhibit rates of depression, alcohol and drug dependence, and suicidal

ideation higher than the general population. The families of pathological gamblers may also

experience physical and psychological abuse as well as harassment and threats from bill collectors

and creditors. Other significant impacts include costs to employers, creditors, insurance

companies, social service agencies, and the civil and criminal justice systems. 13

The costs identified in other studies as associated with problem and pathological gambling

can be grouped into seven categories:

1. Bankruptcy 2. Crime 3. Unemployment and Loss of Productivity 4. Social Services 5. Illness 6. Suicide 7. Divorce, Abuse, and other Family Costs

BANKRUPTCY

Gambling addicts often have a higher level of debt than nongamblers. The NORC study

found that the indebtedness of a pathological gambler is generally 25 percent greater than a low

risk gambler and 120 percent greater than a nongambler. When debt levels were compared to

income, the study found that pathological gamblers owe $1.20 for every dollar of annual income,

while nongamblers owe half that amount. Lifetime losses involved with bankruptcy were found to

be approximately $3,300 and $1,600 for pathological gamblers and problem gamblers,

respectively. 14 Problem and pathological gamblers appear to gamble more frequently and risk

more than nonproblem gamblers.

The Welte study measured the extent of individuals’ gambling involvement by multiplying

frequency (the number of times a type of gambling was engaged in during the past year) by the

absolute value of the last win or loss. Gamblers who did not experience any addiction criteria had

13 Henry R. Lesieur, “Costs and Treatment of Pathological Gambling,” Annals of the American Academy of Political and Social Science 553 (1998): 153171; Rachel A. Volberg, et al., “Assessing SelfReported Expenditures on Gambling,”Managerial and Decision Economics 22.13 (2001): 7796. 14 Gerstein, 4546.



a mean extent of gambling involvement of $45/year while pathological gamblers had a mean of

$189/year. 15 Surveys of Gamblers Anonymous members have indicated that they often meet

their gambling needs by borrowing from household finances, spouses, other relatives, and selling

family property. 16

Some research indicates that problem and pathological gamblers over their lifetime are

more likely to declare bankruptcy than nongamblers. The same NORC study found 4.2 percent

of nongamblers experienced bankruptcy at some point in their life compared to 10.3 percent of

problem gamblers and 19.2 percent of pathological gamblers. 17 Different studies of Gamblers

Anonymous members have put the rate of bankruptcy between 18 and 28 percent. 18 States do

not track what percentage of bankruptcy filings are by problem gamblers.

Rather than measuring the bankruptcy rates among individuals, other studies have taken a

macroview of bankruptcy filings in counties and states with casino gambling. Several question

the observation that increases in bankruptcy filings are a result of access to casino gambling. A

study performed for the South Dakota Legislative Research Council (1998) determined that there

was no correlation between the growth in bankruptcy filings and lottery revenues in South Dakota,

suggesting that other economic forces were the cause of any changes in bankruptcy filing rates.

This study also considered a possible correlation between bankruptcy filings and agricultural cash

receipts for livestock and crops but also concluded that there was no significant correlation

between the two. The study ultimately concluded that changes in bankruptcy laws, combined with

consumer and small business debt, increased medical costs and increased competition for

bankruptcy services were the possible cause of the increase in bankruptcy filings since 1994. 19

The NORC study, isolating the effects of casino proximity by comparing 100 communities

between 1980 and 1997 with and without a nearby casino and analyzing the years before and

after casinos opened, also concluded that there was no statistically significant relationship

between proximity to a casino and bankruptcy rates. 20

Other studies have found that bankruptcy rates were higher in counties with a casino, but

when other variables or factors are included, the statistical effect of the casino’s presence was

unclear or statistically insignificant. Barron, et al. (2002) used a multivariate model to study more

15 Welte, 334. 16 Loreen Rugle, Social Costs of Problem Gambling, presented at the Greater Cleveland Roundtable, Cleveland, OH, July 13, 2005. 17 Gerstein, 2930; 4546. 18 Rugle, presentation July 13, 2005. 19 “Economic and Fiscal Impacts of the South Dakota Gaming Industry” South Dakota Legislative Research Council for the State of South Dakota, (1998). 20 Gerstein, 6570.



than 3,000 counties from 1993 through 1998. They documented multiple factors positively

associated with the bankruptcy filing rates, including proximity to a casino. The model they

developed predicted an eight percent decline in 1998 filing rates for casino and neighboring

counties if casino gambling were abolished in those counties. However, when they looked at

nationwide rates, they found that the incidence and growth of casino gambling since 1993 was not

significant in explaining the rise in bankruptcy rates. This confounding outcome made the linkage

between casinos and bankruptcy rates unclear. 21

Goss and Morse (2005) employed a multivariate framework to examine 253 counties that

legalized casinos (including tribal casinos) between 1990 and 2002. They found the effect of a

casino on bankruptcies changed over time. While they found that the introduction of a casino had

a statistically significant and positive (albeit small) impact on individual bankruptcy rates in the first

few years of operation, bankruptcy rates of counties with casinos were found to be lower than

noncasino counties by the fourth year of operation. The bankruptcy rate for counties with

casinos did not rise above that of casinoless counties until after nine years of casino operations,

after which time, bankruptcy rates in casino counties increased above noncasino counties and

continued to increase in subsequent years. They hypothesize that this time lag effect may be due

to the initial positive influences of a casino on the local economy that is perhaps reduced or

minimized over time. 22 They did not examine the bankruptcy rates of counties that neighbored

casinocounties.

While problem gamblers do appear to have larger amounts of personal debt and are more

likely to declare bankruptcy than nonproblem gamblers or nongamblers, county bankruptcy rates

are not clearly correlated with the presence of a casino. Not finding a statistically significant

relationship between casinos and bankruptcy rates does not necessarily mean that casino

proximity does not impact bankruptcy rates. The effects may either be too small to be statistically

meaningful or there may be countervailing positive economic effects engendered by a casino’s

presence that reduce bankruptcy filings among others while addictive gamblers do have higher

bankruptcies filings.

21 John M. Barron, et al., “The Impact of Casino Gambling on Personal Bankruptcy Filing Rates” Contemporary Economic Policy 20.4 (2002): 440455. 22 Ernie Goss and Edward A. Morse, The Impact of Casino Gambling on Individual Bankruptcy Rates from 1990 to 2002, Creighton University (Working Paper 2005).



CRIME

It is not unreasonable to expect that an individual’s pathological gambling problem would

be associated with illegal activity to support the addiction. The stress of gambling, financial

pressures, the impact on the family, and workrelated problems can produce anxiety, depression,

and cognitive distortions that impair an individual’s judgment, decisionmaking, and behavioral

choices. This impaired decisionmaking can lead to illegal activity to finance an addiction to

gambling and meet other family and individual financial needs and responsibilities. The most

common forms of crime thought to be related to gambling disorders are fraud, theft, forgery, and

embezzlement.

Four different studies of problem and pathological gamblers in treatment found that the

percentage of those who reported stealing money or property to finance their gambling ranged

from 30.1 to 40.7 percent. 23 Studies by Gamblers Anonymous state that four to 15 percent of its

members have been incarcerated for a gamblingrelated crime. Gamblers in treatment, however,

are not necessarily representative of problem and pathological gamblers in general. They may be

in treatment because they had legal problems tied to their gambling or another disorder that was

linked with their addictive behaviors, criminal activity, or other forms of atrisk activities.

Several studies have examined the percentage of gamblers who have been arrested or

incarcerated. The rates vary by location. The NORC national study compared the percentage of

nongamblers and problem gamblers who experienced an arrest or incarceration at some point in

their lives; the results are reported in Table 2 below. 24 A statewide survey in Nevada found higher

arrest and incarceration rates than NORC (although half of problem gamblers refused to answer

whether they had ever been incarcerated). It reported that 13.1 percent of nonproblem gamblers

had been arrested or detained at some point in their life and 9.2 percent had been incarcerated.

Among problem gamblers, 21.2 percent had experienced an arrest or detainment, and 33.3

percent had been incarcerated at some point. 25

Table 2: Percentage of Gamblers Ever Experiencing Arrest or Incarceration Lifetime Non gambler

Lifetime LowRisk Gambler

Lifetime Problem Gambler

Lifetime Pathological Gambler

Arrests 4 10 36.3 32.3 Incarceration 0.4 3.7 10.4 21.4

23 Rugle, presentation July 13, 2005. 24 Gerstein, 30. 25 Rachel A. Volberg, Gambling and Problem Gambling in Nevada: Report to the Nevada Department of Human Resources (2002), 39.



Both of these studies include any arrest or incarceration across an individual’s lifetime; the

crimes committed may not have had anything to do with a gambling addiction and could have

taken place years before an addiction developed. As a result, it is difficult to draw accurate

conclusions from the statistics relative to the causal linkage between addictive gambling and

crime levels. In a study of Las Vegas and Des Moines, the National Institute of Justice found 14.5

percent and 9.2 percent, respectively, of those arrested were problem or pathological gamblers. 26

Numerous studies have taken a macroview of the effect of casino gambling on crime

rates in a city or county. The experience of Atlantic City is often considered as an example of the

influence of casinos on increased crime rates in a city. A report by the Maryland Attorney

General’s office reported that crime in Atlantic City rose by 258 percent during the first 10 years

with casinos. Nonviolent index crimes increased 272 percent, while violent crimes increased by

199 percent. 27 FBI data shows Atlantic City’s overall crime rate in 2002 at 12,924 crimes per

100,000 people compared to the national average of 4,119 per 100,000. Similar scenarios have

been described in cities with casinos in Connecticut and Wisconsin. 28

These statistics, however, often do not take into account the larger number of people in an

area as a result of a casino’s presence. For example, if a casino attracts 25,000 people per day,

then the population base needs to be increased to account for the larger number of nonresidents

in the city. All tourist destinations have larger numbers of people within their boundaries than just

residents. With no adjustment for the number of visitors to a casino, per capita crime rates are not

valid if based only on the resident population. Cities that attract large numbers of workers,

shoppers, and tourists appear to have higher crime rates if only resident populations are used to

calculate rates.

The NORC study developed a multivariate statistical model to assess 100 communities

from 1980 to 1997 in an effort to isolate the effects of casinos. They found that the casino effect

was not statistically significant for FBI Index I crimes (murder, rape, robbery, aggravated assault,

burglary, larceny, and auto theft). They did not analyze the effect of a casino on “white collar”

crimes such as embezzlement and fraud. 29

Building upon the NORC analysis, Grinols provided a statistical analysis of all 3,165

counties in the United States between 1977 and 1996 and concluded that crime does increase

26 United States Dept. of Justice, Gambling and Crime among Arrestees: Exploring the Link, (Washington, D.C., National Institute of Justice, July 2004), 3. 27 J.J. Curran, The House Never Loses and Maryland Cannot Win: Why Casino Gaming is a Bad Idea, State Attorney General Report (1995). 28 Richard M. Aborn, and John V. Bennett, Gambling: Who’s Really at Risk? The Connection between Gambling and Crime (New York: Constantine & Aborn Advisory Services, 2005). 29 Gerstein, 70.



over time in those counties with casinos. His study controlled for more than 50 variables to

examine the impact of a casino on the FBI Index I crimes and found that over time casinos

increased all crimes except murder. His model estimated that approximately eight percent of

crime in casino counties in 1996 was attributable to casinos. 30 However, the model did not control

for the larger number of people in the areas with casinos as a result of visitors from surrounding

counties or for the higher concentrations of people at the facilities from within the county. A

similar multivariate panel study of all Wisconsin counties from 1981 to 1994 found that having a

casino increased some types of crime within a county, but again a correction factor for the number

of people at the casinos was omitted. The crimes they found to be significantly statistically related

to casino openings included aggravated assaults, motor vehicle theft, fraud, forgery,

embezzlement, and possessing stolen property. 31

Problem and pathological gamblers do experience a higher rate of arrest and incarceration

than both nongamblers and nonproblem gamblers. An analysis of their demographic group

explains some of the differences (their gender, age, race, income, chemical dependencies, and

marital status indicate they would have a higher arrest rate than nongamblers whether or not they

had a gambling addiction), 32 but the financial difficulties and stresses related to their gambling

problem can clearly lead to additional criminal acts. However, research on the effect of casinos

on the overall crime rate has been inconclusive.

UNEMPLOYMENT AND LOSS OF PRODUCTIVITY

A gambling addiction may lead to a loss of work productivity. Employees who are not

reliable or regularly miss work likely have reduced work performance and can generate real

economic costs to their employers through productivity losses. If an employer ends up

terminating a worker, additional costs could also be incurred. The terminated employee may also

apply for unemployment insurance, another societal cost.

It is hard to measure how much productivity is lost due to problem gamblers at work. One

review found between 69 and 76 percent of pathological gamblers missed work at some point in

order to gamble. 33 A Wisconsin study of 98 Gamblers Anonymous respondents found that 66

30 Earl L. Grinols, and David B. Mustard, Casinos, Crime and Community Costs (University of Illinois: University of Georgia, April 2005). 31 Ricardo C. Gazel, et al., “Casino Gambling and Crime: A Panel Study of Wisconsin Counties,” Managerial and Decision Economics 22 (2001): 6575. 32 Gerstein, 47. 33 Henry R. Lesieur, “Pathological Gambling Is a Psychiatric Disorder,” R.L. Evans and M. Hance, eds., Legalized Gambling: For and Against, (Chicago: Open Court Publishing, 1998), 3763.



percent of respondents reported missing a day of work due to gambling. 34 However, it is not clear

if these responses meant taking time within prescribed benefits such as vacation or personal days

and thus making it impossible to associate gambling with missed work. All workers are

sometimes late for work, miss a day to participate in a favorite activity (golf, for example), or do

personal things during work hours. This is not to suggest that golf is as potentially destructive as

gambling, but it is to highlight the difficulty in determine whether one factor such as gambling

accounts for lost productivity or the loss of a job. Studies have not been able to determine how

much more time a problem gambler takes as a result of his or her interests compared to other

employees.

A review of the literature shows that job loss rates were higher in a given year among

identified problem gamblers than among nonproblem gamblers or others in their demographic

group without a gambling problem. One review of literature found between 21 and 36 percent of

problem gamblers in treatment reported losing a job because of their gambling. 35 People in

treatment, however, are not necessarily representative of the problem gambling population in

general, and this reduces the ability to support general conclusions. The NORC study found 10.8

percent of problem gamblers and 13.8 percent of pathological gamblers reported job loss in the

past year compared to four percent of lowrisk nonproblem gamblers and 2.6 percent of non

gamblers. 36 Given that the demographic background of problem and pathological gamblers is not

the same as nongamblers, the NORC study concluded that eight percent of their job loss was the

excess rate due to gambling.

Unemployment insurance is an additional cost to society. The NORC survey found that

10.9 percent of problem gamblers and 15 percent of pathological gamblers reported collecting

unemployment in the past year compared to four percent of lowrisk nonproblem gamblers.

SOCIAL SERVICE COSTS

Problem gamblers may be more likely to take advantage of some social services than non

problem gamblers. If they seek treatment for their addiction, it is often through government

funded programs. If they are unemployed or otherwise in financial difficulties, they may end up

using Medicaid, welfare, and/or food stamps.

34 William N. Thompson, et al., The Social Costs of Gambling in Wisconsin (Thiensville, WI: Wisconsin Policy Research Institute, 1996). 35 Lesieur, 3763. 36 Gerstein, 58.



While there is little research measuring the number of people accessing public assistance

due to their gambling addiction, research does indicate that the poor have higher problem

gambling prevalence rates and are hardest hit economically by gambling problems. The Welte

national survey found an overall prevalence rate of 3.5 percent problem or pathological gamblers

in the general population; however, for those in the lowest socioeconomic quintile, the prevalence

rate was 5.3 percent and for those in the highest quintile it fell to 1.6 percent. This correlation

between lower socioeconomic status and higher problem gambling rates is a statistically

significant trend. 37 Likewise, studies in Canada and Las Vegas found that the percentage of

household income devoted to gaming falls consistently as income rises. 38 In Canada, those in the

lowest income group were found to spend 1.9 percent of their income on gambling, while those in

the highest income group spent 0.3 percent. 39 However, these problems are less likely due to

casino gaming than other forms of gambling. Lower income individuals are more likely to play the

lottery than to gamble in a casino. As mentioned above, rates of casino gambling participation

increased with increasing socioeconomic status from 17 percent of those in the lowest quintile to

33 percent in the highest quintile.

The public cost of treating problem and pathological gamblers in Ohio is currently low, as

there are few public treatment centers and few people seek help. A study of current pathological

gamblers found that only three percent seek professional treatment (not including Gamblers

Anonymous meetings.) 40 Addiction counselors in Ohio confirm that relatively few people seek

treatment for their gambling addiction and even fewer complete treatment; however, in Ohio this is

likely due to a lack of education and advertising of available services (and the overall dearth of

treatment facilities). If gambling addicts had better information about seeking treatment and

easier access to services, a greater number might seek help.

ILLNESS

Gambling addictions have been linked to numerous illnesses including depression, anti

social personality disorder, phobias, chronic stress, gastrointestinal problems such as nausea,

ulcers, and colitis, migraines, skin problems, allergies, oraldental disease, respiratory problems,

37 Welte, 326. 38 Mary O. Borg, et al., “The Incidence of Taxes on Casino Gambling: Exploiting the Tired and Poor”, American Journal of Economics and Sociology 3 (July 1991): 323332. 39 Keith Doucette, “Gambling study shows low income earners, ill educated and elderly at risk”, Responsible Gaming Council Newscan, Oct. 8, 2004. 40 Rachel A. Volberg, Gambling and Problem Gambling in Oregon: Report to the Oregon Gambling Addiction Treatment Foundation,” Gemini Research, Ltd., Northampton, MA (1997). Online: http://www.gamblingaddiction.org/oregonreport/frame.htm.



cardiovascular problems, and cardiac arrest. 41 Alcohol use and other chemical dependencies

have also been linked to problem gambling, both within the general population and within those in

treatment. 42 The NORC study found that lifetime pathological gamblers are twice as likely as

other gamblers (31 percent versus about 15 percent) to describe their health as fair or poor. 43

Table 3 reports the results of a statewide survey in Nevada that studied the differences in physical

and mental health among gamblers. 44

Table 3: Health Problems among Gamblers in Nevada NonProblem Gamblers

Problem Gamblers

Physical health status fair or poor 18.3 25.6 Very troubled by emotions, nerves 1.5 7.7 Experienced manic episode 3.8 15.9 Experienced depression 12.5 39.5 Daily tobacco use 10.9 23.3 Weekly alcohol use 15.2 23.3 Monthly marijuana use 2.9 14.0 Monthly cocaine use 0.3 2.3 Problems due to alcohol in past year 5.2 20.9 Problems due to drugs in past year 0.9 2.3 Sought help for alcohol or drug problems ever 4.2 12.2 Sought help for gambling problems ever 0.3 7.0

None of these studies, however, determined causality. There are no data available that

permits an assessment of the direction of causality between health problems and problem and

pathological gambling. In other words, people who engage in certain risky behaviors (e.g.,

smoking, alcohol use, drug use, etc.) that are linked with additional health problems may be more

likely to develop a gambling disorder than those without specific health problems.

Problem gambling is frequently seen in conjunction with chemical dependencies. A

telephone survey conducted in the state of Delaware found that for those respondents who

reported gambling throughout their adulthood (“lifetime gamblers”), 6.7 percent had an alcohol

dependency compared to 38.8 percent of those who met the criteria for problem gamblers and

66.6 percent for pathological gamblers. The percentages were lower for “past year gamblers.”

41 M.N. Potenza, et al., “Gambling: An addictive behavior with health and primary care implications,” Journal of General Internal Medicine 17 (2002): 721732; Margaret H. Christensen, et al., “Health Care Providers’ Experience with Problem Gamblers,” Journal of Gambling Studies 17.1 (2001): 7179. 42 J.E. Grant, et al., “Pathological Gambling and Alcohol Use Disorder,” Alcohol Research and Health 26.2 (2002): 143150; Howard J. Shaffer, et al., “Gambling, drinking, smoking and other health risk activities among casino employees,” American Journal of Industrial Medicine 36.3 (1999): 365378; A.N. Daghestani, et al., “Pathological Gambling in Hospitalized SubstanceAbusing Veterans,” Journal of Clinical Psychiatry 57.8 (1996): 360363. 43 Gerstein, 29. 44 Volberg (2002), 38.



Alcohol dependency was determined in 2.7 percent of the general adult population, 5.55 percent

of problem gamblers; and 37.5 percent of pathological gamblers. 45 Again, no causality was

statistically demonstrated.

SUICIDE

The National Council for Problem Gambling states there is a strong association between

suicide and pathological gambling. They report that one in five pathological gamblers attempts

suicide, a rate higher than for any other addictive disorder. 46 Similarly, according to a survey of

200 Gamblers Anonymous members in Illinois, 79 percent wanted to die, 66 percent

contemplated suicide, and 45 percent had a definite plan to commit suicide. 47 However, suicides

and attempted suicides are caused by many factors, and it is not possible to determine if

gambling is a symptom of the problem that leads to suicides or suicidal behavior or the cause of

the inclination for suicide.

While anecdotal evidence abounds linking suicide and gambling, there is insufficient

primary research establishing a causal link between them. For example, studies have observed

that Las Vegas has the highest levels of suicide in the nation in terms of residents and visitors and

that Atlantic City realized abnormally high suicide rates for residents and visitors only after

casinos were opened. 48 More systematic studies have not identified a statistical link, leaving the

issues of the causality and relationship between gaming and suicide unclear. It may be possible

that both Las Vegas and Atlantic City attracted large numbers of people seeking jobs who

became frustrated when opportunities did not emerge. As an example of the unclear linkages, a

Nebraska study in 1994 found no relationship between the frequency of gambling (never,

infrequently, monthly, or weekly) and depression in the general population. 49

A 2003 study of 85 pathological gamblers in treatment found that 36 percent reported

thinking about suicide as a result of their gambling at some point in their life. Seven of the

participants (8 percent) had actually attempted suicide although only three of them attributed their

attempt to gambling. In the general population, the parallel rates for thinking about and attempting

45 Walter Mateja, , et al., A Survey of Gambling in Delaware (Newark, DE: Health Services Policy Research Group, University of Delaware, 1998). 46 National Council on Problem Gambling, The Need for National Policy on Problem and Pathological Gambling in America, (Nov. 1, 1993), 7. 47 Henry R. Lesieur and Christopher W. Anderson, Results of a 1995 Survey of Gamblers Anonymous Members in Illinois, Illinois Council on Problem and Compulsive Gambling (June 14, 1995). 48 David P. Phillips, et al., “Elevated Suicide Levels Associated with Legalized Gambling,” Suicide and Life Threatening Behavior 27.4 (1997): 373378. 49 J.A. Thorson, et al., “Epidemiology of gambling and depression in an adult sample,” Psychological Reports, 74 (1994): 98794.



suicide are much lower, estimated at five to 18 percent and one to five percent, respectively.

Those gamblers who reported suicidal thoughts were more likely to be depressed than other

gamblers, and the study could not confirm if depression preceded their gambling problem, hence

making it difficult to establish the direction of the relationships between problems and any causal

relationships. 50

Another 2003 study analyzed the results of telephone surveys of households from 1983 to

1989. Participants were asked questions about their mental health including attempted suicides

and pathological gambling. Researchers found that pathological gamblers were almost four times

as likely (3.95) to have attempted suicide as nonpathological gamblers. However, when

researchers introduced other mental illnesses into the model, the association between gambling

and attempted suicides was no longer statistically significant. 51 While this study failed to show a

causal relationship between pathological gambling and suicide, it and the other studies described

above do indicate that compulsive gamblers are a highrisk group for suicide.

A study of the effect of a casino’s location on countywide suicide rates found no

statistically significant difference between per capita suicide rates in casino and control (non

casino) counties. The study examined per capita suicide statistics in eight counties that

introduced casinos between 1991 and 1994 and compared those findings with demographically

similar counties without casinos. This study concluded by emphasizing that no strong trends in

suicide rates were apparent after the introduction of a casino, but conceded that it is possible that

a casino effect exists with an occurrence so infrequent as to not achieve statistical significance. 52

DIVORCE, ABUSE, AND OTHER FAMILY COSTS

The emotional, physical, and financial effects on the families of problem gamblers

represent other potential costs or negative outcomes from problem gambling. Research has

documented illness and chronic stress from the arguments and uncertainty, financial difficulties,

and physical abuse related to pathological gamblers. Families must deal with the erratic behavior,

potential bankruptcy, and incarceration of the compulsive gambler. Like suicide, however, the

problems faced by the families of a gambler have multiple factors, and research has not

50 A. Blaszczynski, and F. Maccallum, “Pathological gambling and suicidality: An analysis of severity and lethality,” Suicide and LifeThreatening Behavior 33.1 (2003): 8898. 51 S. Newman, and A. Thompson, “A populationbased study of the association between pathological gambling and attempted suicides,” Suicide and LifeThreatening Behavior 33.1 (2003): 8087. 52 Mark Nichols, et al., “Changes in Suicide and Divorce in New Casino Jurisdictions,” Journal of Gambling Studies 20.4 (2004): 391404.



demonstrated the direction of any causality. It is possible the existence of stress levels leads to

gambling behaviors, or it is possible that gambling produces stress levels.

In a survey of nearly 400 Gamblers Anonymous members, 28 percent reported being

either separated or divorced as a direct result of their gambling. 53 The NORC study found that

53.5 percent of pathological gamblers reported having been divorced at some point in their lives.

This compares to 18.2 percent of the nongamblers surveyed. 54 Direct causality, however, was

not established.

Research indicates that on a countywide level, casinos do not appear to be statistically

associated with divorce rates. The same eightcounty study described above on suicide rates also

compared the per capita divorce statistics of casinocounties to a control set of counties. It

actually found divorce rates decreased in three of the eight casino counties more than in the

control counties and increased in one. The differences in divorce rates were not statistically

significant between the remaining casino counties and control counties. 55 The small size of this

data set could limit the generalization of their findings.

Anecdotal evidence such as newspaper articles reporting on children found abandoned on

casino premises and children dying while locked in hot cars in casino parking lots provide a

glimpse at the types of child neglect and abuse that might result from problem gambling.

Unfortunately, no systematic research exists to quantify this linkage. One study of 15 children

and adolescents in eight different families in which one parent had a gambling problem found that

children living with a problem gambler parent reported feelings of pervasive loss, including loss of

the gambling parent, both physically and existentially, loss of relationships with extended family,

loss of security and trust, and financial loss. 56

In The National Research Council’s Pathological Gambling: A Critical Review, between 25

and 50 percent of spouses of compulsive gamblers reported being abused. 57 The National

Gambling Impact Study reported that in 10 case studies of communities with casinos, the majority

witnessed increases in domestic violence. It also reported that on Mississippi’s Gulf Coast,

requests for assistance at domestic violence shelters increased by 100 to 300 percent after the

53 National Gambling Impact Study Commission (NGISC), Final Report (Washington, D.C., Government Printing Office, June 1999), 41. 54 Gerstein, 49. 55 Nichols, 396401. 56 P. Darbyshire, et al., “The Experience of Pervasive Loss: Children and Young People Living in a Family Where Parental Gambling is a Problem,” Journal of Gambling Studies 17.1 (2001): 2345. 57 The National Research Council, Pathological Gambling: A Critical Review (Washington, D.C., National Academy Press, April 1, 1999), 52.



introduction of casinos. 58 Likewise, research in Nebraska found that women who indicated that

their partners have a gambling problem were 10.5 percent more likely to be a victim of intimate

partner violence (IPV). Those who indicated that their partners had a drinking and gambling

problem were 50 times as likely to be a victim of IPV. 59 While higher rates of divorce and spouse

and child abuse are all linked to individuals with gambling disorders, no systematic research has

been able to isolate the multiple causal factors to measure that correlation.

NEGATIVE SOCIAL OUTCOMES AND CASINOS: SUMMARY

Available research on the costs of problem and pathological gambling documents a host of

problems suffered by those with gambling disorders. These include high levels of debt, increased

likelihood to commit a crime, losing one’s job, a broad range of illnesses, suicidal thoughts,

divorce, and other familial conflicts. These costs on an individual and their family are not trivial,

but research studies have not been able to show causal linkage with compulsive gambling

disorders. Nor in most cases has research demonstrated that the availability of casino gambling

has a countywide negative impact.

While people with gambling addictions do have higher debt and are more likely to file for

bankruptcy protection, a statistical link between the presence of casinos and personal bankruptcy

filings has not been found. Unclear patterns exist, and in some instances bankruptcy rates

actually decline in counties with casinos. Similarly, while people with gambling addictions were

more likely to have committed a crime during their lifetimes, no research exists that validates a

statistical link between gambling and crime or between the presence of casinos and crime levels.

While several studies note that the number of reported crimes is sometimes higher after a casino

opens, these same studies have failed to account for the larger number of people present in the

county after the casino opens. All cities that host large tourist, employment, retail, and

entertainment facilities have larger number of reported crimes after the facilities open, but the per

capita rates may not change when the larger crowds are carefully counted. For example, Las

Vegas attracts 37 million visits each year, as does Orlando. In New York, the daytime population

of the city is in excess of 12 million, but there are less than 8.5 million residents in the city. In

each of these cases, if adjustments for the larger numbers of people are not made, crime rates

would be misleading. A casino in a major metropolitan center can attract 25,000 visitors a day,

58 NGISC 727. 59 R.I. Muelleman, et al., “Problem gambling in the partner of the emergency department patient as a risk factor for intimate partner violence,” The Journal of Emergency Medicine, 23.3 (2002): 307312.



and this would change the opportunities for criminal activity but not necessarily the rate of criminal

activity.

People with chronic gambling problems have higher unemployment rates and research

indicates that gambling addictions account for eight percent of their employment problems. In

some counties with casinos, however, overall unemployment rates either declined or were

unaffected by the casino’s presence. Research studies have not been able to isolate the

causality between the presence of casinos and illness or suicides, although certainly pathological

gamblers should be considered high risk for suicide, certain illnesses, and other addictive

behaviors. Similarly, while pathological gamblers are more likely to be divorced than non

gamblers and their families more likely to report cases of abuse, divorce and abuse rates have not

been shown to be correlated with the presence of casinos.

Given the lack of systematic research to pinpoint the causal relationship between problem

and pathological gamblers and the problems they face as individuals, this report turns to a quasi

experimental research approach that examines the communitywide impact of casino gambling on

three societal problems: unemployment, bankruptcy, and crime.



CASINOS AND OHIO: AN INNOVATIVE RESEARCH APPROACH FOR UNDERSTANDING THE IMPACT OF CASINOS IN OHIO ON SELECTED SOCIAL PROBLEMS

The existence of gaming facilities in three states adjacent to Ohio (Indiana, Michigan, and

West Virginia) provides a unique research opportunity to study the effects of casinos on social

factors. By collecting data on the level of social problems in counties before and after the casinos

began operations, it is possible to provide an assessment of the impact of expanded gaming

operations on the level of social problems for which data can be collected. The building and

opening of the casinos in Indiana, West Virginia, and Michigan creates what social scientists

describe as a quasiexperimental research setting. Information can be collected on the level of

social problems in a community prior to and after the opening of a casino. The changes in the

levels of social problems in counties with and without casinos and in counties adjacent to and

further away from the casinos can then be compared.

This research design is referred to as a “quasiexperimental design.” Researchers can

introduce only one new factor – in this case a casino – and test for its effect on social problems.

In the research performed for this project, however, it is possible other factors influenced the

social problems studied at the same time that casinos opened in the various states. While data

were collected on several factors to control for other influences, unknown factors could affect

outcomes because of the lack of randomization process (i.e., casino counties are not randomly

selected). However, through the use of sophisticated regression analysis techniques, other

unknown factors can be controlled in an effort to understand the impact of casinos on several

social problem trends. Data were collected for more than 10 years and this time period permits

most short and longerterm effects of the casinos to be visible. It is possible that even longer time

periods might illustrate other patterns or outcomes, but the patterns observed given the time

period involved are revealing and provide a valid view of outcomes.

This section presents two sets of before and after comparisons. First, the changes in

social problem levels in Ohio counties located within 50 miles of a casino are compared with the

levels of the same social problems in Ohio counties located more than 50 miles from the casinos.

Second, the levels of social problems in counties that are home to casinos in Indiana, West

Virginia, and Michigan are compared to levels in counties in those states without casinos. In this

manner, two sets of observations can be made on the levels of social problems before and after

the opening of casinos in Ohio and in the states that have legalized versions of casino gaming.



The availability of data regarding social problems limited this analysis to an assessment of

changes in unemployment levels, bankruptcy rates, and crime levels. Reliable data for other

social problems at the county level for each county in Ohio, Indiana, Michigan, and West Virginia

are not as easily available. As a result, the trend line analysis is limited to these three important

social issues.

In terms of approaching the research from a quasiexperimental design, it is also valuable

to consider the possible hypotheses or expected outcomes. In this manner, it is possible to

explore some of the theoretical underpinnings that might explain or account for observed

outcomes. For example, with regard to unemployment levels, it might be anticipated by those

who support the establishment of casinos that the presence of gaming facilities increases job

opportunities in the service sector and thus reduces the number of people actively looking for

work. Opponents might expect that the presence of a casino could lead to dysfunctional behavior

from people with gambling problems, leading to job loss and higher levels of unemployment. In

terms of bankruptcy rates, proponents for casinos might argue that the new jobs created reduce

bankruptcy levels as people have more opportunities for work while opponents would expect that

the access to a casino would lead to more gaming problems and higher levels of bankruptcy.

Similarly, proponents often argue that crime rates, controlling for a large number of visitors that

casinos attract, remain unchanged, whereas opponents of casinos might believe that gaming

problems force people to turn to crime to raise additional money.

As noted earlier, data on the levels of chronic or problem gaming in communities are often

unreliable in that it involves selfreporting. In addition, few states have longstanding databases

describing problem gaming levels for their residents. As a result, a separate analysis of the level

of gaming problems in the counties impacted by casinos in Ohio and the other states could not be

performed.

To select the counties that would most likely be affected by the presence of a casino in a

neighboring state, 50mile radii were projected from each gaming facility. The 50mile figure was

used as a result of the finding from past research that indicated populations living within those

areas tended to have the greatest likelihood of illustrating an effect. People living at greater

distances are less likely to access a casino and thus less likely to be affected.

CASINOS IN SURROUNDING STATES AND OUTCOMES FOR OHIO COUNTIES

The trend lines in Figure 7 illustrate unemployment rates in Ohio counties within 50 miles

of the casinos in neighboring states. Different colors are used to show the separate patterns for



counties within 50 miles of the casinos in Indiana, Michigan, and West Virginia. The arrows

identify the years in which the casinos opened in the different states.

The Ohio counties within 50 miles of the casinos in West Virginia have had consistently

higher unemployment rates than counties further from the casinos. That trend or pattern existed

before and after casino operation. The similarity in the shape of the trend lines suggests the

casinos did not have a negative or positive impact. This does not mean that casinos do not have

an impact on unemployment rates, only that the overall unemployment rates for Ohio’s counties

located within 50 miles of the casino were not affected.

The counties located within a 50mile radius of Indiana’s casinos have had consistently

lower unemployment rates than the rest of Ohio. There was, however, no observable changes in

the trend lines for these counties after the casinos opened. Michigan’s casinos also had no

substantial effect on the trend line for unemployment levels in the counties closed to these

facilities (see Figure 7).

Figure 7. Unemployment Rates in Ohio Counties Closest to Casinos and in All Ohio Counties 60

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

All Counties Non Casino WV Adj MI Adj IN Adj

The trend lines in Figure 8 illustrate the results for bankruptcy rates. Bankruptcy rates in

Ohio counties nearest Indiana’s casinos have been consistently higher than those for all other

60 Arrows indicate years when casino operations started.



counties in Ohio. However, the overall trend appears to be largely unaffected by the opening of

the casinos. An examination of each of the trend lines in Figure 8 supports the argument that,

over the last 13 years, the patterns have been almost identical with no substantial or observable

shift related to the initiation of casinos. This again indicates that the presence or absence of a

casino is not a decisive factor that significantly impacts personal bankruptcy levels or rates.

Bankruptcy rates have increased in all Ohio counties regardless of exposure to nearby casino

operation. Such a trend indicates that laws or factors other than a casino explain changes, and it

is likely that recent changes in the bankruptcy laws probably encouraged some people to file their

petitions or legal documents before the new federal laws took effect (see Figure 8).

Figure 8. Bankruptcy Rates in Ohio Counties Closest to Casinos and in All Ohio Counties

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003


The trends observed with regard to crime rates are illustrated in Figure 9 and show no

consistent pattern, which differentiates casino counties from noncasino counties. For example, in

Ohio counties closest to Indiana’s riverboat casinos, crime rates declined after the casinos

opened and then increased, but never achieved the levels that existed prior to the opening of the

casinos. There is a further conflicting set of outcomes in Ohio counties nearest to Michigan’s

casinos. Crime levels initially declined after the casinos opened, but then increased only to

decline again after 2001. The counties closest to West Virginia’s casinos illustrate a similar

confusing pattern of rising and falling crime rates after the casinos opened, eliminating the



likelihood that the presence of the casinos had a determining effect on criminal activity (see

Figure 9).

The second part of the quasiexperimental design involved an analysis of the trends in

unemployment, personal bankruptcy rates, and unemployment rates in the casino and noncasino

counties of Indiana, Michigan, and West Virginia. These data do not reflect any changes in Ohio,

but focuses on what has taken place in these three states with casinostyle gaming activities.

Figure 9. Crime Rates in Ohio Counties Closest to Casinos and in All Ohio Counties

0.0

10.0

20.0

30.0

40.0

50.0

60.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002


Unemployment levels in Indiana counties are compared in Figure 10. Unemployment

rates in the counties that became hosts to a casino were higher than in the noncasino counties

before the gaming centers opened in 1994. The differences in unemployment rates between the

two groupings of counties almost disappeared in 1997. (Earlier figures involving casinos in

Indiana involved the three riverboats in the Greater Cincinnati metropolitan area. As Indiana

actually established a total of 10 riverboats, others were established at different times. The five

arrows in Figure 10 represent the starting dates of the other riverboats). However, it cannot be

concluded that the improved employment levels was a direct result of the casinos, but a similar

pattern is observed in Michigan (see Figure 11). In West Virginia, however, unemployment rates

in casino counties have been lower than that of noncasino counties, and no significant change in

trend before and after casino operation is observed (see Figure 12). Unemployment rate trends in



all three states reflect macroeconomic business cycles: a strong economic boom in the 1990s and

a recession since 2000. Unemployment rates declined significantly during the 1990s and have

bounced back since 2000. Casino operation does not seem to make any significant difference in

unemployment issues, either positive or negative, between casino and noncasino counties.

Figure 10. Unemployment Rates in Indiana Counties with and without Riverboat Casinos

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Total NonCasino Casino

Figure 11. Unemployment Rates in Michigan Counties with and without Casinos

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003




Figure 12. Unemployment Rates in West Virginia Counties with and without Casinos

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003


Bankruptcy rates in West Virginia counties that are home to casinos had been higher than

the rates in other counties. After the casinos opened in 1994, the gap or difference in personal

bankruptcy rates between the two types of counties actually increased (see Figure 13). This may

not be caused by casino operation alone, but it indicates that there might be some casino effects

on personal bankruptcy rates. A similar pattern is observed in Indiana. Bankruptcy rate trends in

casino and noncasino counties in Indiana had been almost identical until 1997, but casino

counties have shown a slightly higher bankruptcy rate since then (see Figure 14). On the other

hand, Michigan casino counties show an opposite patterns. The bankruptcy rate in casino

counties has been consistently lower than that of noncasino counties, and the gap between the

two groups has increased (see Figure 15). Casino effects on bankruptcy rate are not consistent.

However, note that there was a significant increase in the number of bankruptcy filings in both

casino and noncasino counties since 2000 in Ohio, and a similar pattern was found for the other

three states. This pattern again suggests the importance of macro level changes (in this case,

federal bankruptcy law).



Figure 13. Personal Bankruptcy Filing Rates in West Virginia Counties with and without Casinos

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003


Figure 14. Personal Bankruptcy Filing Rates in Indiana Counties with and without Casinos

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003




Figure 15. Personal Bankruptcy Filing Rates in Michigan Counties with and without Casinos

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003


Crime rate levels in Michigan, Indiana, and West Virginia are illustrated in Figures 16, 17,

and 18. In Michigan, crime rate trends in casino and noncasino counties have been almost

identical, with the opening of the casinos having virtually no effect despite the possibility that

larger number of visitors are present in the counties that are home to casinos (see Figure 16). In

Indiana, casino counties have had consistently higher crime rates both before and after riverboat

casino operations were initiated. This would again suggest that the presence of the casinos had

no observable effect. The pattern observed in West Virginia is similar to the pattern in Indiana. In

fact, the gap between casino counties and noncasino counties has been significantly reduced

since 1999 (see Figure 18).



Figure 16. Crime Rates in Michigan Counties with and without Casinos

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003


Figure 17. Crime Rates in Indiana Counties with and without Casinos

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003




Figure 18. Crime Rates in West Virginia Counties with and without Casinos

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003


An interesting pattern emerges from the graphs presented in this section. There were

instances of higher unemployment, personal bankruptcy, and crime rates, in some years, for

counties with or near casinos. In other years, the opposite pattern was observed, and differences

were hard to interpret as in some situations the counties with casinos had higher rates even

before the opening of the new gaming centers. This suggests that there may well be important

and fundamental differences between counties with and without casinos, and those differences

rather than the gaming centers could account for any of the variations in the rates observed from

the trend lines produced. Unless the initial differences that existed between casino and non

casino counties are properly controlled, simple comparisons between trend lines can produce

erroneous results and conclusions with regard to the effects of a casino on a community.

CONTROLLING FOR INITIAL DIFFERENCES BETWEEN CASINO AND NONCASINO COUNTIES: COMPLEX MODELS AND MULTIPLE REGRESSION ANALYSES

One way to control for initial differences between casino and noncasino counties is to

analyze the effects of gaming centers across a number of years and communities in a multiple

regression analysis setting that insures a far greater level of scrutiny and rigor. A multiple

regression analysis, when implemented properly, can take into account other potential factors that

might have caused initial differences in social problem levels between casino and noncasino

counties. For this analysis, several different models were developed and compared to understand



the extent to which variations in bankruptcy and crime rates among counties in the four states –

Ohio, Indiana, West Virginia, and Michigan – could be attributed to gaming centers.

The analysis of casino effects using a multiple regression model poses two unique

challenges. First, to control initial differences, multiyear observations (1991 – 2003) must be

used for each county. A common statistical technique, ordinary least square (OLS), does not take

into account such a data structure (often called panel data) and can thus produce misleading

results. Special attention needs to be paid to the panel structure of the multiyear data to take

advantage of extra precision it offers. To appropriately use these data, fixed effect (FE), random

effect (RE), and generalized estimation equations (GEE) regression strategies should be

employed. This section of the report presents results from the four different statistical techniques

to both illustrate any differences or erroneous conclusions that would be drawn if only an OLS

approach was used. The GEE approach is often considered more robust than others because it

produces consistent and unbiased estimators even when some statistical assumptions that other

techniques require cannot be sustained.

Second, there is a dearth of theoretical research on the effects of casinos on social issues,

such as bankruptcy and crime. Therefore, most statistical models that have been examined in the

literature are based on intuition rather than theory. Since the purpose of this study is not building

a theoretical base for the social cost of casinos, we also have to rely on our collective knowledge

on this issue to build our statistical models. Our analysis of casino effects on bankruptcy rate and

crime rate is based on the following model:

SCit = β0 + β1Cit + β2CADJit + β3POPit + β4UNEMPit + β5GDPt + β6MFEMPit +

β7TOTEMPit + TIME + εit

where SCit is social cost variables (i.e., bankruptcy and crime rates) in county i in year t; Cit is a

dummy variable that indicates casino vs. noncasino counties 61 ; CADJit is the number of

neighboring casino counties within 50 miles of each county; POPit is the size of county population

for each year; UNEMPit is annual average county unemployment rate; GDPt is the annual growth

rate of Gross Domestic Product; MFEMPit is the annual growth rate of county manufacturing

employment; TOTEMPit is the annual growth rate of county total employment; and TIME is time

trend.

61 This dummy variable takes value ‘1’ for casino counties after casino operation started. Noncasino counties and years before casino operation in casino counties take value ‘0’.



Estimates for the casino dummy variable (Cit) and the adjacent casino variable (CADJit)

measure casino effects on bankruptcy and crime rates. The other variables are control factors to

take into account local as well as national economic conditions. Tables 4 and 5 present

estimation results from bankruptcy and crime rates from different statistical techniques.

The results in Table 4 indicate that personal bankruptcy filings are impacted by the

presence of a casino. The OLS estimation, which does not take into account the panel structure,

produced counterintuitive results (e.g., higher unemployment rate will lead to lower bankruptcy

rate). However, the other three models produced results with expected signs.

The FE and RE models estimate positive and statistically significant direct and indirect

casino effects on personal bankruptcy rates. A casino in a county or adjacent to the county

(within 50 miles) can increase the number of personal bankruptcy filings. However, the

magnitude of this effect is quite small. For instance, the presence of a casino in a county

increases the number of personal bankruptcy filings per 1,000 people by about 0.3. Therefore, in

a county with one million residents, this would mean approximately 300 more people would be

expected to file bankruptcy and those filings would be attributed to the casinos. In addition, in

neighboring communities within 50 miles, some 50 to 90 more people could be expected to file for

bankruptcy protection. However, it should be noted that the GEE model – the model that is the

most precise – yielded statistically insignificant estimates for direct and indirect casino effects. In

other words, if this, the most exacting technique were used, the presence of a casino has no

effect on personal bankruptcy rates.

The value in using multiple models is to offer more precise multiple views of a complex

issue such as what causes changes in bankruptcy rate. The data for the four states indicates

that, because two of the models illustrate a positive effect, the hypothesis that casinos do not

have an impact on bankruptcy rates cannot be accepted and community leaders should anticipate

small increments if casinos are opened in Ohio. It should also be noted that besides the one

difference related to the casinos, the results from the three models were quite consistent (see

Table 4).



Table 4. Casinos and Personal Bankruptcy Rates in Four States in Four Different Regression Models

VARIABLE REGRESSION MODEL OLS FE RE GEE

Casino 0.4812 0.3183 0.2572 0.2840 Adjacent Casino (50 miles) 0.0504 0.0945 0.0471 0.0534 Population 8.70E07 2.24E05 1.01E06 9.35E07 Unemployment Rate 0.1222 0.0866 0.0399 0.0463 GDP Growth 0.1992 0.1356 0.1509 0.1492 Manufacturing Emp Growth 0.0014 0.0010 0.0012 0.0011 Total Emp Growth 0.0073 0.0065 0.0073 0.0072 Time 0.2791 0.3438 0.3212 0.3227 Numbers in bold indicate differences (between casino and noncasino or adjacent to casino and not adjacent) were statistically significant at .05 level or less.

The analysis of crime rate shows that casinos have no impact on crime levels (see Table

5). The results from the OLS model are questionable since it does not take into account the panel

structure. Although the FE model reflects the panel structure, it produces counterintuitive results.

For instance, the model predicts that the crime rate is higher in smaller communities, but stylized

facts support the opposite. On the other hand, the RE and GEE models produce almost identical

and consistent estimates: 1) the presence of a casino does not affect the crime rate; 2) the size of

a community is positively associated with crime rate; 3) the unemployment rate is positively

associated with the crime rate; 4) GDP growth is negatively associated with the crime rate; 5)

manufacturing employment growth is negatively associated with crime rate; 6) and crime rates

tend to decrease over time (see Table 5).

Table 5. Casinos and Crime Rates in Four States in Four Different Regression Models VARIABLE REGRESSION MODEL

OLS FE RE GEE Casino 5.2655 2.3154 1.1836 1.2306 Adj Casino (50 miles) 1.4123 0.6500 0.4904 0.5036 Population 4.15E05 7.00E05 3.85E05 3.83E05 Unemployment Rate 0.0050 0.3312 0.2755 0.2768 GDP Growth 0.6106 0.4874 0.5219 0.5211 Manufacturing Emp Growth 0.0304 0.0063 0.0068 0.0067 Total Employment Growth 0.0597 0.0107 0.0138 0.0137 Time 0.4574 0.0552 0.1443 0.1424 Numbers in bold indicate differences (between casino and noncasino or adjacent to casino and not adjacent) were statistically significant at .05 level or less.



The results from multiple regression models presented in this section suggest that macro

level economic conditions play a more important role than the presence of a casino in determining

bankruptcy and crime rates, but that casinos have a small effect on bankruptcy rates. However,

the GEE model, which is more robust than the FE and RE models, predicts no significant casino

effects on either the bankruptcy rate or crime rate.

THE EFFECT OF CASINOS ON COUNTY BANKRUPTCY AND CRIME RATES: SUMMARY

By comparing data on the levels of bankruptcy and crime in Indiana, West Virginia, and

Michigan counties before and after casinos began operations, we were able to provide an

assessment of the impact of these gaming operations on the counties in which they operate as

well as the neighboring counties. The data predicts no significant casino effects on either

bankruptcy rates or crime rates.

Starting with a trend line analysis of unemployment levels, bankruptcy rates, and crime

levels, we compared the counties that are home to casinos in Indiana, West Virginia, and

Michigan to counties in those states without casinos as well as Ohio counties located within 50

miles of a casino compared to Ohio counties located more than 50 miles from the casinos. In

both cases, we found no clear casino effect. There were instances of higher unemployment,

personal bankruptcy, and crime rates, in some years, for counties with or near casinos and yet, in

other years, the opposite pattern was observed. Often the differences were hard to interpret

because counties with casinos frequently had higher rates even before the opening of the new

gaming centers. For example, personal bankruptcy rates were higher in West Virginia counties

with casinos than those counties without while in Michigan, the opposite was true. In both cases,

this trend existed before casinos were introduced. This suggests that there may be fundamental

differences between counties with and without casinos, and those differences rather than the

gaming centers could account for any of the variations in the rates observed from the trend lines.

To control for initial differences that existed between casino and noncasino counties, we

turned to a multiple regression analysis and reported on the findings of four different statistical

techniques (OLS, FE, RE, and GEE). The OLS model was shown not to be appropriate given the

nature of the panel data; the GEE model was the most precise.

The FE, RE, and GEE models all show that personal bankruptcy filings are affected by the

presence of a casino. The FE and RE models estimate positive and statistically significant direct

and indirect casino effects on personal bankruptcy rates. However, the magnitude of this effect is

quite small (0.3 per 1,000). The GEE model yielded positive but statistically insignificant



estimates for direct and indirect casino effects. The presence of a casino, therefore, either has a

very small or no effect at all on personal bankruptcy rates.

The analysis of crime rate shows that casinos have no impact on crime levels. The RE

and GEE models found that while the presence of a casino does not affect the crime rate, other

factors do. The size of a community and the unemployment rate are positively associated with

crime rate. GDP growth and manufacturing employment are negatively associated with the crime

rate.

While this study confirms past research showing that casinos do not introduce community

wide costs of higher crime and bankruptcy rates, casinos are associated with higher numbers of

problem and pathological gamblers. Although causality has not been proven, research shows

these individuals can face a number of financial, legal, physical, and emotional problems.

Whether or not individuals with gambling disorders are affecting a community’s overall social cost

levels, their addiction needs to be addressed. The following section suggests policies to mitigate

the problem of gambling disorders.



MITIGATING THE COSTS OF GAMBLING DISORDERS

Whether or not Ohio legalizes casinos, it already has a sizeable population with a

gambling problem. Our research estimates that Ohio already has over 252,000 adult residents

with a problem or pathological gambling disorder. Introducing casinos has the potential of adding

approximately 109,000 more in the future. It is advisable to expand awareness, prevention,

treatment, and research funding for problem gambling. There would also be considerable value in

expanding the ability to restrict access to casinos with state approved licenses of individuals who

are known to be problem or pathological gamblers. People with criminal records could also be

excluded and if problem gamblers and people with criminal records are excluded from admission

some of the possible social problems resulting from casinos in Ohio could be reduced.

Additional expenditures to treat problem and compulsive gamblers are also required.

Table 6 compares the resources provided to mitigate problem gambling in several states,

including Ohio. The extremely limited statefunded treatment programs currently available in Ohio

are described below. This is followed by recommendations based on practices that have been

found to be effective in other jurisdictions to mitigate the potential harm of legalized gambling

expansion. For a complete description of the recommendations, see Appendix I. Australia, New

Zealand and Canada could also provide models to policy makers for a proactive approach to

mitigating the social costs of casino gambling.

Table 6: Selected States’ Funding for Problem Gambling Mitigation (2004)

State Annual Budget Per Capita Funding Source

Ohio $350,000 0.03 Lottery Arizona $1,250,000 0.22 Lottery, Tribal Casinos Nebraska $750,000 0.43 Lottery, Charitable Gaming Louisiana $2,000,000 0.44 Riverboat, Video Poker, Casinos, Lottery Indiana $3,850,000 0.62 Casino Admission Fees Iowa $2,200,000 0.75 Lottery, Riverboat & Racetrack Oregon $2,800,000 0.79 Lottery Source: Association of Problem Gambling Service Administrators

AVAILABILITY OF TREATMENT

Treatment resources in Ohio are very limited. The Ohio Lottery provides $350,000 a year

for five pilot programs that until March 2005 were limited to serving only those with gambling and

chemical dependency problems. The Veterans Administration runs the only residential treatment



facility in the state, but it serves veterans from the entire country. The Lottery also provides a

small grant to the Ohio Council on Problem Gambling to train counselors. Currently, Ohio has at

most 15 nationally certified gambling counselors working with problem gamblers. Gamblers

Anonymous (GA) does provide a peer support system for gamblers in the state, however, there

are only an estimated 42 GA meetings in the whole state, compared to 840 AA meetings in the

Cleveland area alone.

Started in 2002, Ohio’s pilot programs for problem gambling are very small and have

reached a very limited population. Each program receives approximately $50,000 per year.

Originally there were four programs located in Athens, Cincinnati, Toledo, and Youngstown. The

Cleveland program was added in 2003 to focus mainly on problem gambling among youth. All

five facilities screen their clientele for gambling problems when they come for other addictions and

then provide an outpatient treatment program with a combination of group and individual

sessions. Most have not kept accurate records of the numbers of clients they have treated for

gambling addictions, but given the lack of funding and outreach, the numbers are low. For

example, the Youngstown program has seen 30 to 35 gamblers over the past three years and

about 12 have completed the program. The Toledo program only reports treating four to five

clients a year for gambling addictions (compared to 3,800 clients with other addictions in the two

area facilities). Each year, the Cincinnati program schedules about 40 people for treatment and

approximately 10 complete the treatment successfully. 62

The Athens program has systematically screened all clientele for gambling addictions

since 2002. In 2002 and 2003, 17 percent (of 178 people) met the criteria required to be

classified as a problem or pathological gambler. In 2004, using a different screening tool, of the

147 clients screened, nine percent were classified as problem or pathological gamblers. It is not

possible to determine if this meant that there was a decline in the level of problem gamblers in the

area or if the different instrument produced a different classification level. The use of different

instruments to assess gambling behavior and the selfidentification involved in asking for

assistance limits the ability of any data set to provide an accurate estimate of the number of

people with gaming problems who currently live in Ohio.

All of the programs recognize the need for increased educational outreach. The Cleveland

program has focused on prevention and education since its inception, and several of the other

programs plan to increase their outreach efforts as well. The Cleveland program has provided

education on gambling to over 600 children through workshops at schools and at juvenile

62 All data presented in this section on the five Ohio pilot programs was gathered through a phone interview process with the facilities in June and July 2005.



protection facilities. The Cincinnati program has introduced education on gambling addictions into

the materials they provide to anyone receiving chemical dependency treatment and provides

information at large community events. Given the small size of the state grants, the programs’

leaders believe they have to pick between providing treatment or providing education and

outreach.

The Veterans Administration in Brecksville operates the only residential gambling

treatment program in Ohio. This was the first gambling treatment facility in the United States

when it opened in 1972, but it only provides services to veterans, and the majority of its patients

are from other states. There are no other treatment facilities funded by Ohio, although it is

possible that treatment services provided by private vendors are supported by state and federal

health care programs and through the health insurance provided to workers by their employees.

Treatment at private facilities is not a matter of public record.

RECOMMENDATIONS: POLICES TO MITIGATE THE SOCIAL COSTS

Strategic Planning and Monitoring. Strategic planning and monitoring of the impacts of

legal gambling are critical elements in the effective prevention of problem gambling. There is

broad consensus that the fundamental elements of an effective problem gambling prevention

effort include consultation with the full range of stakeholders, cooperatively established goals,

agreement on measurable criteria of performance, and independent evaluation of these efforts.

This would involve creating an integrated database of prevalence rates, conducting more basic

research, and widely disseminating findings. Regulation and Policy. The state of Ohio has very few regulations or legislative policies

with respect to problem gambling. As a first step, we recommend increasing funding for problem

gambling services by seeking contributions from the Lottery, the horse race wagering industry,

and the charitable gambling industry. All sectors of Ohio’s gambling industry should contribute to

fund multiyear commitments to problem gambling research, treatment, and prevention.

Other regulatory measures that should be considered in Ohio include mandated signage

about problem gambling in gambling venues, education and training for gambling industry

personnel, and mandated voluntary exclusion programs. These should not be limited to the

possible future casinos but should include all gambling operators in the state of Ohio. Finally,

there is merit in exploring additional possible regulatory measures for minimizing problem

gambling in Ohio. Possible interventions include:

• ‘responsible advertising’ codes of conduct;



• establishing limits on the location of casino and card room venues, hours of operation, wagers and prizes, and number of machines per location; and

• establishing limits on placement of ATMs, coolingoff periods after wins, modifications of machine design, alcohol service policies, and improving access to treatment services.

Care is needed to assure that such regulatory steps do not cause unintended

consequences. One approach would be to test such programs in selected markets before

mandating their adoption on a statewide basis. Raising Public Awareness. Public awareness campaigns have been proven effective in

delaying initiation of problematic behaviors and in increasing cessation. The effectiveness of such

campaigns depends on formative research to identify groups at risk and develop messages aimed

at these groups, the use of television as the primary broadcast medium, extensive field times, and

complementary local prevention initiatives.

The state should fund and commission qualitative research on targeted messages to at

risk groups (e.g. youth, women, older adults, cultural and ethnic minorities, employees of

gambling venues, recent immigrants, and incarcerated populations). Building on this work, the

next step would be to conduct a targeted public awareness campaign aimed to atrisk groups in

selected markets and to evaluate the effectiveness of this effort. The culmination of this effort

would be to roll the public awareness campaign out on a statewide basis.

Gambling venues are viable locations for problem gambling prevention initiatives. The

gambling industry must play a key role in the collaborative development of responsible gambling

practices. For example, ‘gambling information’ kiosks within gambling venues can bring together

a range of problem gambling prevention initiatives, including information and links to helping

organizations, as well as providing the capacity to establish precommitment levels of expenditure

and even speak directly with a problem gambling counselor. Training for Professionals and the Industry. Work is needed to train healthcare

professionals, educators, and criminal justice personnel, including courts, probation, and juvenile

justice in how to screen for gambling problems and how to refer problem gamblers and family

members for help. There is a need to develop costeffective approaches to expanding the

availability of problem gambling treatment services and to provide a broader continuum of care. Helpline, Online Resources and Other Innovative Practices. Ohio needs to maintain a

helpline to provide information to callers as well as crisis management and immediate referrals for

help. Visibility of the helpline number is essential. The helpline number should be prominently

posted in all gambling venues, listed on brochures and other informational material, and on public

service announcements. The helpline number should be included in all public awareness and



education activities and materials. There is a need to ensure that helpline callers whose first

language is not English are able to speak to a counselor and obtain information in their own

language.

The ideal of a full continuum of treatment services is not available in most areas of the

United States. There is a need to develop costeffective models utilizing existing infrastructures to

expand the continuum of gambling treatment services and to explore the use of new Internet,

telephonic, and teleconferencing (group) technologies to allow experienced gambling counselors

reach the vast majority of problem gamblers who do not seek formal treatment services. Given

the increasing role of the Internet in offering gambling services as well as help for problem

gamblers, there is merit in developing webbased problem gambling assistance in Ohio.



CONCLUSION

The decision to legalize casinos in Ohio must consider the potential societal costs related

to higher levels of compulsive gambling disorders that will likely result if new casinos open,

reducing the commuting time for Ohioans to gaming centers. Most costs identified with gambling

are those produced by the small portion of the population that suffers from a gambling addiction.

It is estimated that between two and five percent of the population are problem or pathological

gamblers. Given the existing distribution of casinos, it is reasonable to expect that 252,000

Ohioans (three percent of the adult population) will suffer from a gambling addiction during their

lifetime. Opening casinos in seven Ohio cities could lead to an additional 109,000 residents

developing a gambling disorder during their lifetime (reaching a total of over four percent of the

adult population).

What are the social costs created by this new higher level of problem and pathological

gamblers in Ohio? Previous researchers have attempted to quantify these costs and have

produced a set of wide ranging estimates. Part of the reason these estimates vary so widely lies

with the difficulty in finding a causal linkage or correlation between gambling and destructive

behavior. The essential question is whether gambling is the cause of an observed social problem

or whether gambling is a symptom of an individual’s other psychological or physiological problem.

If gambling is a symptom then the observed social costs in some of the estimates would still have

taken place even if the gaming outlet was unavailable. For example, if a person has

psychological problems which create a tendency for risky behavior, then they may engage in

gambling or some other forms of risky behavior that generates social costs in the absence of

gambling opportunities. In the absence of causal connections costs cannot be assigned to a

specific behavior.

In addition, even if all of the costs assumed from an individual’s risky behavior could be

attributed to gambling, the statement of costs must consider the benefits from higher levels of

employment, the retention of tax dollars, and the bankruptcies that do not occur as a result of

these positive outcomes. In addition, as already noted, many of the studies of crime levels have

failed to account for the larger numbers of people visiting an area. In that regard crime levels per

capita might be unchanged (removing that cost). Survey work related to time lost at work has

also been incomplete as people can take vacation and personal days in which they engage in

gambling so that these costs are zero as people take vacation and personal days even if they do

not gamble.



We examined seven areas most frequently identified as the costs of problem gambling:

bankruptcy, crime, unemployment, social services, illness, suicide, and divorce and domestic

abuse. While people with gambling addictions do have higher debt levels and are more likely to

file for personal bankruptcy protection, a statistical link between the presence of casinos and

personal bankruptcy filings has not been found. Unclear patterns exist and in some instances

bankruptcy rates actually decline in counties with casinos. One possible explanation is that

people who do not end up declaring bankruptcy due to casino employment or increased income

may offset any increases in bankruptcies among gambling addicts. The regression analysis

looked at a sufficient number of years so that lag effects from a casino’s opening are included. It

is always possible that longer time frames would illustrate different outcomes, but the number of

years examined provides a high level of confidence that bankruptcy rates seem to be unaffected

by the presence of casinos.

Similarly, people with gambling addictions are more likely than nongamblers to have

committed a crime and to have been incarcerated during their lifetimes. However, their crimes

are not necessarily a direct result of their gambling. Problem and pathological gamblers are very

different demographically from nongamblers; this subset of the population is statistically more

likely to commit a crime regardless of their gambling status. The key issue may be the willingness

to engage in risky behaviors as a result of other deepseeded psychological problems. In

addition, research does not validate a statistical link between the presence of casinos and higher

crime levels. While several studies note that the number of reported crimes is sometimes higher

after a casino opens, these same studies fail to account for the larger number of people present in

the county after a casino opens. A casino in a major metropolitan center can attract 25,000

visitors a day; this would change the opportunities for criminal activity but not necessarily the rate

of criminal activity.

People with chronic gambling problems have higher unemployment rates, and research

indicates that gambling addictions account for eight percent of their employment problems. The

effect on countywide unemployment rates, however, is neither clear, nor consistent. In some

counties with casinos, overall unemployment rates either declined or were unaffected by the

casino’s presence. The jobs lost by those with a gambling disorder may be offset by the jobs

created by the casino or retained as a result of new tax revenues available to the governments

and the creation of public sector jobs.

While individuals with a gambling disorder clearly have a higher incidence of a number of

illnesses and physical ailments, higher suicide rates, higher divorce rates, and increased levels of

familial abuse, research studies have not been able to isolate the causality between their



addiction and these other social ills. While pathological gamblers should be considered a high

risk population for certain illnesses and suicide, research does not exist that shows gambling

necessarily caused these other problems. In some cases, these problems may have preceded a

gambling problem and in other cases the causality is unclear given the coexistence of other

problems such as chemical dependencies. Research has shown no correlation between divorce

rates and the presence of casinos or between suicide rates and casinos.

Given the uncertainty regarding a causal link between problem and pathological gambling

disorders and social costs and the possible offsetting benefits that result, it is not prudent to fix a

net cost figure on the higher levels of problem and pathological gamblers in the state. Various

state and national studies have attempted to quantify the societal cost per problem and

pathological gambler. They differ on methodology; sometimes confuse real costs with transfer

payments or private consequences; omit certain costs for which it is difficult to assign a financial

value; and often fail to include benefits to those who secure jobs, which has to be part of any

benefitcost analysis. For example, two studies using the same data from Wisconsin had a

difference of $6,495 between their estimates of the annual societal cost per “compulsive”

gambler. 63 Estimates of the annual cost to society per pathological gambler range from $1,226 64

(NORC) to $10,920 (Grinols). 65 Clearly, these analyses make extremely different assumptions to

calculate their costs and provide little clear direction for policy. Furthermore, all of these cost

estimates rely upon causalities that the literature does not sustain. However, it would be irresponsible to simply dismiss the social consequences of higher numbers of compulsive gamblers that will result as a result of increased access to gambling if casinos operate in Ohio.

While the methodologies used to calculate the societal costs of a pathological gambler are

problematic particularly given the lack of clear causality between gambling addiction and its

associated costs, the very real problems of compulsive gamblers cannot be ignored and adequate

financing needs to exist to provide the services now needed by Ohioans with a gambling disorder.

A financial commitment must made in order to be able to provide services to the increasing

number of Ohioans who may develop gambling disorders as a result of increased access which

results from expanded Internet gambling opportunities and casinos in other states as well as

potential casinos in Ohio if that should occur. Adequate financing is not currently in place for

63 Thompson (1996) found a cost of $9,469 per compulsive gambler; D.M. Walker and A.H. Barnett, “The Social Costs of Gambling: An Economic Perspective” Journal of Gambling Studies, 15(3) (1999): 181212. Walker, et al found $2,974 per compulsive gambler. 64 Both estimates have been converted to 2005 dollars. 65 Earl L. Grinols, Gambling in America: Costs and Benefits (Cambridge: Cambridge University Press, 2004), 173.



those Ohioans who already have compulsive gambling problems, and there is no dedicated

revenue stream identified by the state to deal with the potential for increased numbers of problem

gamblers resulting from the actions of other states and by providers of gambling opportunities

using the Internet. This failure is not prudent given what is taking place in and around Ohio.

While this study confirms past research showing that casinos do not introduce community

wide costs of higher crime and bankruptcy rates, casinos are associated with higher numbers of

problem and pathological gamblers. Research shows that these individuals can face a number of

financial, legal, physical, and emotional problems. Whether or not individuals with gambling

disorders are affecting a community’s overall social cost levels, their addiction needs to be

addressed.

Currently Ohio has made a very modest commitment to helping its residents with gambling

addictions. Ohio provides a total of $350,000 a year from lottery revenues to fund five pilot

projects, some training of counselors, and to maintain a hotline. That represents approximately

three cents per Ohio resident. In comparison, Oregon spends 79 cents per resident on funding

for problem gambling mitigation. To match Oregon’s funding level, Ohio would have to provide

$9,023,000 for its problem gambling mitigation efforts.

Oregon’s funding level, however, may not be sufficient to provide the ideal of a full

continuum of services of research, prevention, outreach, and treatment. Nine million dollars

would only represent $24 per problem and pathological gambler (assuming Ohio reaches 361,000

problem gamblers if casinos are opened). In comparison, several of Canada’s provinces are

known for having more complete problem gambling services. Ontario provides approximately $25

million annually, the equivalent of $2.10 per resident. Saskatchewan provides $4.25 million

annually, the equivalent of $4.30 per resident. To mitigate the problem gambling issues that

already exist in Ohio, the state should consider funding a broad range of measures at $2 per

resident, or $22,850,000 annually. If new casinos are opened and the number of problem

gamblers increases to 361,000, then Ohio must insure that there are sufficient funds to treat the

potential range of affected individuals. Currently, and in the absence of local casinos, Ohio has a

large number of pathological gamblers who do not have access to needed services; their

gambling activities in other states and countries supports programs for residents of those other

areas. The social cost of adequate mitigation services is at least $22.9 million a year, rising to

$29.7 million if new casinos are opened and funding levels are maintained to provide services to

the projected levels of new compulsive gamblers.



APPENDIX: FULL RECOMMENDATIONS TO MITIGATE SOCIAL COSTS OF GAMBLING

Loreen Rugle, Ph.D Ohio Council on Problem Gambling

Ohio, especially in connection with any expansion of legalized gambling, needs to expand awareness, prevention, treatment and research funding for problem gambling. The following are recommendations based on practices that have been found to be effective in other jurisdictions to mitigate the potential harm of legalized gambling expansion.

STRATEGIC PLANNING AND MONITORING Strategic planning and monitoring of the impacts of legal gambling are critical elements in the effective prevention of problem gambling. There is broad consensus that the fundamental elements of an effective problem gambling prevention effort include consultation with the full range of stakeholders, cooperatively established goals, agreement on measurable criteria of performance and independent evaluation of these efforts.

Integrated Database Prevalence research is needed to design effective public awareness and education campaigns in Ohio as well as to inform treatment and prevention efforts through identification of vulnerable or atrisk groups that may not be accessing existing services for cultural or other reasons.

• Fund and commission prevalence research in Ohio.

It is essential that a prevalence survey be conducted in Ohio before public awareness and education programs as well as other interventions are developed. Adequate inclusion of samples of cultural and ethnic minorities is essential. ‘Replication’ prevalence surveys should be repeated at fiveyear intervals to monitor changes in patterns of gambling participation as well as in the distribution of gambling problems among subgroups in the population. Repeated prevalence surveys would also allow assessment of the impact of problem gambling services.

• Convene regular meetings of stakeholders in Ohio to discuss development and maintenance of monitoring system.

An essential element in strategic planning is a system to provide policy makers, the gambling industry, health and social service agencies and other stakeholders with a neutral informational database for strategic analysis and decisionmaking. To assure broad consensus on the elements of this system as well as its continued utility over time, there is value in bringing representatives of the key stakeholders together on a regular basis. Representation from a wide range of stakeholders and audiences is essential.

Basic Research Basic research on problem gambling is needed to inform both policy analysis and service development. There are several particularly critical basic research needs in the gambling field including longitudinal research on groups of people over time to improve our understanding of how gambling problems develop, studies of helpseeking by problem gamblers and studies of the effectiveness of problem gambling services. There is also a need for studies of the impacts of



specific gambling introductions on communities and studies of gambling among vulnerable groups in the population. These gaps form the basis for the following suggestions:

• Solicit and fund proposal to validate problem gambling screening instruments in highrisk populations (e.g., addictions and mental health treatment programs, criminal justice settings).

• Solicit and fund proposals for basic research on helpseeking, evaluative research on problem gambling services and research on impacts of casino introduction on Ohio communities.

• Solicit and fund proposals for sectorspecific research on regular gamblers (e.g., track bettors, casino gamblers, lottery gamblers) with particular attention to natural recovery processes.

• Solicit and fund proposals for research on gambling industry practices (e.g., advertising) and relationship to the onset and maintenance of gambling and problem gambling.

• Solicit and fund proposals for research on community awareness and ‘readiness to change’ to define targets for problem gambling education and awareness efforts more clearly.

• Solicit and fund proposals for research on the Internet, wireless and remote gambling, problem gambling and helpseeking for gambling problems.

• Solicit and fund proposals to add brief gambling ‘modules’ to one or more ongoing, longitudinal panel studies.

• Solicit and fund proposals for research on family members of problem gamblers, including significant others.

While research is needed to provide reliable information on which government and policy makers can make evidencebased decisions, systems for soliciting research should include competitive, independent peerreviewed processes for selecting research and researchers as well as review of proposals and reports before publication.

Dissemination A critical element to any monitoring system is a process for dissemination so that responses to new developments or information can be made quickly. Information about gambling and problem gambling can be difficult to identify and access. An increasing amount of information is now disseminated primarily through the Internet. Development of an informational website should be a priority. While the purpose of this clearinghouse should initially be information dissemination, standardsetting and research coordination functions could eventually be incorporated.

• Establish webbased clearinghouse to monitor helpline calls, treatment seeking, problem gambling prevalence rates, gambling participation rates, gambling industry revenues, gambling tax revenues, and other measures of impacts on Ohio communities.

The creation of a dedicated website for problem gambling education and prevention would yield substantial benefits for a relatively small investment. Websites have the added advantage of



being highly flexible and easily updated. Furthermore, traffic on the website can be tracked easily to assess the effectiveness of the effort.

REGULATION AND POLICY

The State of Ohio has very few regulations or legislative policies with respect to problem gambling. As a first step, we recommend increasing funding for problem gambling services by seeking contributions from lottery, the horse race wagering industry and the charitable gambling industry. Seek financial contributions from all sectors of Ohio gambling industry to fund multiyear commitments to problem gambling research, treatment and prevention.

Other regulatory measures that should be considered in Ohio include mandated signage about problem gambling in gambling venues, education and training for gambling industry personnel and mandated voluntary exclusion programs. These must not be limited to casinos but must include all gambling operators in the State of Ohio. Care must also be taken to implement measures for monitoring compliance with these programs.

• With stakeholder involvement, explore possibilities for mandated problem gambling signage requirements for all sectors of gambling industry in Ohio.

• With stakeholder involvement, explore possibilities for mandated problem gambling awareness training for all gambling industry personnel.

• Establish system to monitor compliance with gambling employee training requirements, regardless of whether requirements are mandatory or voluntary.

• With stakeholder involvement, explore possibilities for mandated voluntary exclusion program across all sectors of gambling industry in Ohio.

Finally, there is merit in exploring additional possible regulatory measures for minimizing problem gambling in Ohio. However, care is needed to assure that such regulatory steps do not cause unintended consequences. One approach would be to trial such programs in selected markets before mandating their adoption on a statewide basis.

• Conduct systematic review of international gambling industry ‘responsible advertising’ codes of conduct.

• Explore possibilities for mandating ‘responsible advertising’ code of conduct for all sectors of gambling industry in Ohio.

• With stakeholder involvement, explore possibilities for establishing limits on location of casino and card room venues, hours of operation, wagers and prizes, and number of machines per location.

• With stakeholder involvement, explore possibilities for establishing limits on placement of ATMs, coolingoff periods after wins, modifications of machine design, alcohol service policies, and improving access to treatment services.



RAISING PUBLIC AWARENESS

Public awareness campaigns have been proven effective in delaying initiation of problematic behaviors and in increasing cessation. The effectiveness of such campaigns depends on formative research to identify groups at risk and develop messages aimed at these groups, the use of television as the broadcast medium, extensive field times and complementary local prevention initiatives. At each step in the development of the campaign, it is essential to evaluate the effectiveness of the effort.

The first step in the development of a broad public awareness campaign aimed at preventing the development of gambling problems among atrisk groups in the population should be prevalence research to identify groups in the population that are at greatest risk. This should be followed by qualitative research on the social and cultural meanings of gambling and problem gambling to the groups identified as being at greatest risk.

Fund and commission qualitative research on targeted messages to atrisk groups (e.g. youth, women, older adults, cultural and ethnic minorities, recent immigrants, and incarcerated populations). Building on this work, the next step would be to conduct a targeted public awareness campaign aimed at atrisk groups in selected markets and to evaluate the effectiveness of this effort. Objectives and measurement procedures involved in the evaluation should be agreed upon at the beginning of the project and reviewed annually. At a minimum, changes in general recognition of problem gambling as a disorder and in knowledge about the availability of help should be assessed. The culmination of this effort would be to roll the public awareness campaign out on a statewide basis.

• Fund and commission evaluation of targeted messages to youth, women, older adults and minorities in selected markets to assess increased recognition of problem gambling and improved knowledge about availability of help.

• Fund and commission evaluation of targeted public awareness campaign statewide.

• Work with Department of Corrections to implement problem gambling screening for individuals entering the criminal justice system as well as to introduce problem gambling selfhelp groups in prisons.

• Establish workgroup to assess feasibility of establishing gambling courts in Ohio.

Focus on Venues An important first step to ensuring that players are educated about the risks of gambling would be to conduct an assessment of compliance with signage requirements and the availability of educational and informational material on problem gambling in all gambling venues in Ohio. Another important step would be to work with gambling operators to develop materials specifically for players in their venues. Information should be included about odds of winning, payout schedules, cost of games and how the games work.

• Assess compliance with signage requirements and availability of problem gambling information in gambling venues in Ohio.

• Work with gambling operators to develop problem gambling informational materials specific to their players.



‘Gambling information’ kiosks within gambling venues can bring together a range of problem gambling prevention initiatives, including information and links to helping organizations, as well as providing the capacity to establish precommitment levels of expenditure and even speak directly with a problem gambling counselor. Kiosks configured to provide responsible gambling information along with financial transaction capabilities and links to other gambling venue services are worthy of development and evaluation. An initial smallscale implementation and evaluation of this approach in partnership with one or more gambling operators is warranted. If the approach proves effective, this initial step can be followed by fullscale implementation in all gambling venues in Ohio.

• Commission trial of ‘gambling information kiosk’ at race tracks or casinos if legalized in Ohio.

Gambling venues are viable locations for problem gambling prevention initiatives. The gambling industry must play a key role in the collaborative development of responsible gambling practices.

Employees of a casino are more likely than others in the general population to experience gambling problems. We would suggest education programs that target all new gambling employees as well as an annual education program to inform all employees about problem gambling and where to obtain help. This would include employees of current gambling venues (i.e. race tracks, lottery, charitable gaming) as well as any venues that may be legalized in the future.

• Work with all sectors of Ohio gambling industry to implement annual education program for all employees.

• Fund and commission evaluation of gambling employee training programs in increasing understanding of problem gambling and improving staff willingness to intervene.

TRAINING FOR PROFESSIONALS AND INDUSTRY

Work is needed to train health care professionals, educators and criminal justice personnel, including courts, probation and juvenile justice, in how to screen for gambling problems and how to refer problem gamblers and family members for help. There is a need to develop costeffective approaches to expanding the availability of problem gambling treatment services and to provide a broader continuum of care.

Health Care Professionals There is a need to provide training for a broad range of healthcare providers in basic awareness of gambling problems, screening techniques and referral resources, and a need to develop cost effective brief screening and assessment instruments that can be easily employed throughout the healthcare system. An important first step in increasing awareness of problem gambling as well as help for problem gamblers and their families would be to institute training for addiction counselors and therapists in problem gambling diagnosis, referral and treatment and to increase the availability of certified problem gambling counselors in Ohio. In time, curricula for medical students, nursing students and clinical psychology/social work students should be expanded to include some basic information about problem gambling and its impacts.



• Expand problem gambling training for counselors in alcohol and substance abuse treatment centers in Ohio.

• Establish workgroup of gambling counselors, financial counselors and legal advisers to develop treatment protocols addressing financial and legal difficulties of problem gamblers and families.

To assure quality of care, the State of Ohio should establish minimum competencies regarding providers of problem gambling treatment services. This should involve certification or licensure based on existing best practice standards.

• Work with OCPG and National Council on Problem Gambling to establish minimum competencies for providers of problem gambling services in Ohio.

• Establish workgroup to establish procedures in the state of Ohio for certification of problem gambling counselors.

Workshops to bring together experts in the fields of problem gambling treatment and research with individuals with expertise in other branches of addiction and mental health to develop an agenda for aggregation of data and collaborative program development are also recommended.

• Organize and conduct one or more workshops to develop an agenda for collaborative program development.

Educators and Community Leaders There is a need to provide education and awareness of problem gambling and referral resources to educators and community leaders. Clergy are another important group.

• Fund and commission development and dissemination of targeted prevention materials for educators and community leaders in Ohio.

Law Enforcement As noted above, it would be desirable to add screening for gambling problems to screening procedures for alcohol and drugs for individuals entering the criminal justice system in order to increase the likelihood that problem gamblers entering the system will receive help. We also noted above that it would be helpful to support a workgroup to investigate the creation of gambling courts in Ohio to help destigmatize problem gambling and reduce some of the burden on the criminal justice system.

To improve awareness of problem gambling among criminal justice personnel, it would be helpful to develop and implement a problem gambling education program for judges, attorneys and probation officers. We also support the establishment of annual training of police officers and county sheriffs to give them basic information about problem gambling and its impacts as well as about appropriate referrals and interventions. A practical strategy would be to target peace officers who work within 50 miles of a casino.

• Develop annual training of police officers and sheriffs working within 50 miles of a casino or racetrack.



Finally, it would be valuable to make problem gambling literature, including Gamblers Anonymous and GamAnon materials, available in prison libraries throughout the state and to foster the development of Gamblers Anonymous chapters inside prisons, perhaps through the use of G.A. volunteers.

• Work with Department of Corrections to ensure that problem gambling literature and self help meetings are available in Ohio prisons.

Gambling Industry Personnel We have noted above the need for mandated annual problem gambling awareness training for all gambling industry personnel as well as the need for a system to monitor compliance with training requirements across all sectors of the gambling industry in Ohio. We also noted above the desirability of mandating a voluntary exclusion program across all sectors of the gambling industry in Ohio. While employee training should remain the responsibility of gambling operators, it is essential to establish a system to monitor compliance (see above) as well as to evaluate the effectiveness of this program.

• Fund and commission evaluation of gambling industry awareness training programs across all sectors of gambling industry in Ohio.

HELPLINE, INNOVATIVE PRACTICE AND ONLINE RESOURCES

Helpline We believe that there should be a single helpline number for the entire State of Ohio. This helpline should provide information to callers as well as crisis management and immediate referrals for help. It is likely that additional funding will be needed to support an increase in calls and expansion of helpline services brought about by the State’s public awareness and education efforts.

• Establish workgroup to evaluate benefits and costs of consolidating problem gambling helpline services in Ohio and how this could be accomplished.

Visibility of the helpline number is essential. The helpline number should be prominently posted in all gambling venues, listed on brochures and other informational material, and on public service announcements. The helpline number should be included in all public awareness and education activities and materials. There is a need to ensure that helpline callers whose first language is not English are able to speak to a counselor and obtain information in their own language.

There is a need to evaluate the effectiveness of the helpline on an annual basis. Followup surveys of helpline callers should be funded to determine rates of service utilization among callers, experiences with treatment providers and/or Gamblers Anonymous, changes in problem severity, gambling participation and quality of life, and satisfaction with the helpline. Other questions relate to the percentage of calls that are crisis calls, to the interval between a call and followup with a treatment provider, and to the issue of repeat callers whose needs likely differ from those of first time callers.

• Fund and commission evaluation of effectiveness of helpline service for problem gamblers in Ohio.



Research is needed to determine subgroups in the population who are not utilizing the helpline and assess their reasons for not doing so. Comparison of prevalence and helpline data would be useful in identifying groups with high rates of problem gambling that are not accessing the helpline. Work could follow to identify ways to reach these groups and increase their access to the helpline as well as to followon direct services.

Innovative Practice The ideal of a full continuum of treatment services is not available in most areas of the United States. There is a need to develop costeffective models utilizing existing infrastructures to expand the continuum of gambling treatment services and to explore the use of new Internet, telephonic and teleconferencing (group) technologies to allow experienced gambling counselors to reaching the vast majority of problem gamblers who do not seek formal treatment services.

There are a growing number of innovative practices in problem gambling intervention. Research suggests that different types of problem gambler may benefit from different types or levels of intervention. While natural recovery is most likely to be successful among atrisk and the least severe problem gamblers, another group of more severely affected problem gamblers or ‘early stage’ pathological gamblers may be able to limit or stop gambling with brief, or minimal, interventions such as selfhelp workbooks or telephone counseling. All of these efforts require rigorous evaluation.

• Fund and commission study of one or more brief interventions for problem gambling (e.g. workbook and motivational interviewing, online counseling, telephone counseling, indicated prevention with college students) and evaluate effectiveness of these approaches in Ohio.

Online Resources People increasingly seek help for a variety of medical and personal problems through the Internet. Online mutual aid groups offer a range of benefits including social support, practical information, shared experiences, destigmatization, anonymity, privacy and flexible availability. Given the increasing role of the Internet in offering gambling services as well as help for problem gamblers, there is merit in developing webbased problem gambling assistance in Ohio.

• Fund development and evaluation of effectiveness of online selfhelp capabilities for problem gambling support groups in Ohio.

• Fund and commission evaluation of effectiveness of online professional help for problem gamblers in Ohio.

INDICATED INTERVENTIONS

We have already noted the need to institute training in problem gambling diagnosis, referral and treatment for addiction counselors and therapists in Ohio. As a corollary, we believe there is value in increased screening for gambling problems among alcohol and substance abuse clients. Identification and appropriate referral of individuals with comorbid gambling and substance abuse problems has the potential to improve treatment outcomes for substance abuse as well as reduce problem gambling.



• Increase screening for problem gambling among alcohol and substance abuse clients throughout Ohio.

Voluntary Exclusion Programs Exclusion has the potential to be an effective tool in problem gambling prevention and a growing number of governments have mandated voluntary programs. While existing programs are a step in the right direction, there is considerable room for improvement. Suggestions include mandatory promotion of these programs, jurisdictional standardization and uniformity, use of computerized checks and clear penalties, the involvement of counselors in exclusion interviews and mandatory education for excluders.

• Establish policy and procedures for integrated voluntary exclusion programs for all sectors of the gaming industry in Ohio where feasible.

• Fund and commission evaluation of voluntary exclusion programs across all sectors of gambling industry in Ohio.

• Encourage establishment of liaisons between gambling operators and treatment service providers.

• Fund and commission evaluation of effectiveness of involving counselors in exclusion interviews.

Treatment Treatment is needed to meet the needs of individuals who are unable to recover from gambling problems on their own or whose problems are so severe that they are a danger to themselves or others.

A stepped care, public health model of services seems most promising. A continuum of integrated services needs to include harm reduction as well as abstinencebased alternatives. As noted above, brief motivational and education interventions are needed to assist lower severity problem gamblers while more intense interventions are needed to address the needs of subtypes of problem gamblers characterized by significant comorbidity.

• Commission development of comprehensive assessment tools and placement criteria for problem gamblers at different levels of severity.

• Commission evaluation of problem gambling services in Ohio to assess changes in help seeking in response to prevention efforts as well as satisfaction with available services.

• Support development and evaluation of targeted treatment services for youth, women and family members of problem gamblers.

• Fund and commission development of problem gambling treatment guide for Ohio counselors.

• Fund and commission development of quality assurance measures to maintain standards of care for problem gamblers and their families.



• Fund and commission study on integration of problem gambling treatment components into existing addictions and/or mental health structures.

• Fund and commission study to identify most effective elements of multimodal treatment approaches for problem gamblers.

• Establish workgroup to develop best practices for pathological gamblers with cooccurring mental disorders and/or comorbid addictive disorders.

• Establish workgroup to consider development of ‘center(s) of excellence’ to develop and test new problem gambling treatment modalities, disseminate current researchbased information to clinicians and provide training.

• Establish workgroup to consider mandating third party coverage for problem gambling and/or direct funding of problem gambling treatment services.

Research In the U.S., state governments have generally not funded basic research into the causes and development of problem and pathological gambling. This is at least partly because such research is expensive and complex, involves teams of investigators, and generally requires years to complete. Nevertheless, there is a need to develop a more thorough understanding of the causes of problem and pathological gambling in order to improve prevention and intervention efforts. Critical issues are highlighted here. We believe there is value in exploring the development of collaborative relationships with researchers and funding agencies in other jurisdictions to fund research on these issues. There is also a need to work to establish multiyear funding commitments for problem gambling research, prevention and treatment.

• Genetic studies are needed to determine what inherited factors differentiate gamblers in terms of severity, presence of cooccurring psychiatric disorders and treatment response.

• Neurological studies are needed to examine differential brain functioning of pathological and nonpathological gamblers to improve understanding of addictive process and promote design of better prevention and intervention strategies.

• Studies are needed to examine the temporal relationship between pathological gambling and comorbid disorders and how this might affect treatment.

• Studies are needed to improve understanding of the impact of technology on the behavior of problem and pathological gamblers. Both laboratory and naturalistic studies of behavior are needed to identify whether and how pathological gamblers play differently, what technological elements cause the greatest behavioral changes and what modifications might decrease problematic play.

• Studies are needed to improve understanding of specific subtypes of problem and pathological gamblers to improve the effectiveness of targeted interventions.

• Studies are needed to identify factors that promote resiliency or increase risk in relation to gambling problems.



• Studies are needed to improve understanding of factors that predict transitions between social, problematic and pathological gambling.

• Studies are needed to improve understanding of the long term effects of treatment for problem and pathological gamblers as well as of changes in comorbid conditions subsequent to treatment.

• Longitudinal panel studies of adolescents are needed to examine physiological responses to gambling, coping styles and other factors that predict ‘maturing out’ of early problem gambling compared with transition to more severe problems.

• Studies of highrisk minority groups in the population are needed to identify cultural factors that protect or contribute to gambling involvement as well as those that may assist with recovery or interfere with treatment.

• Pharmacotherapeutic studies using large samples are needed to identify benefits of drug therapies for pathological gamblers as well as efficacy of these medications.

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