WASHINGTON — Atlantic City and Las Vegas casinos are newly licensed to operate online gambling sites. It’s good news for them: After seven straight years of sinking profits, the Center for Gaming Research at the University of Nevada predicts that if brick-and-mortar casinos continue to shrink at the same rate as this year, their online presence will have to double to make up for lost revenue.
It’s no surprise then that states like Nevada and New Jersey, who have grown reliant on gambling revenues, are taking advantage of the Department of Justice’s 2011 decision gutting the Wire Act to expand gambling online.
Be careful what you bet on. Experts have expressed concern over Internet gambling for years.
In 1999, the National Gambling Impact Study Commission (NGISC) recommended an explicit moratorium on gambling expansion and a complete ban of Internet gambling until more research could be done on its harms and benefits. Unfortunately this research has not been done and online gambling advocates are petitioning Congress to approve a regulatory regime that would help them spread online gambling nationwide and give them the trappings of a legalized market — most important among these, the illusion that online gambling is somehow safe.
Online gambling will increase availability. But where there is an increase in availability there’s also a documented increase in incidences of problem gambling and the attendant social harms of bankruptcy, divorce, incarceration, suicide.
Advocates for online gambling say problem gamblers make up only a small percentage of overall players, but that does not take into account ripple effects.
Studies estimate that a compulsive gambler will affect an average of five to 10 other people.
Even recovering problem gamblers may not be able to undo the damage done to their finances and relationships, particularly their marriages.
The NGISC reported receiving “abundant testimony and evidence that compulsive gambling introduces a greatly heightened level of stress and tension into marriages and families, often culminating in divorce and other manifestations of familial disharmony,” and that “respondents representing 2 million adults identified a spouse’s gambling as a significant factor in a prior divorce.”
The total costs to society are untold. The increase in crime, financial hardship, lost work and family break-up have led Baylor University professor Earl L. Grinols to estimate the cost of gambling to outweigh its benefits three to one.
Internet gambling is particularly worrisome because evidence overwhelmingly shows that compulsive gambling is three to four times more prevalent among online gamblers than non-Internet gamblers.
The 24-7 ease of access, speed of the game, lack of clear cash markers, solitary nature of play and ability to play multiple games at once make online gambling inherently more dangerous than other forms of gambling.
Online gambling vendors claim they will be able to screen out minors, ensure a player’s identity and validate that players are physically located within proper jurisdictions.
However, the FBI countered this claim in a 2009 letter to the Financial Services Committee stating, “While the (online gambling) vendors may claim that they can validate age and location, they are more than likely relying on credit card information and geo-location to gather this information. Both can be spoofed.”
While legalizing online gambling may seem like an attractive solution to a state’s budget woes, evidence suggests the contrary. Gambling is a regressive tax that disproportionately impacts the poor, diverting money away from local businesses and displacing existing sales tax revenue while fueling societal ills.
Both sides of this debate agree a state-by-state patchwork of online gambling regimes will not work. Congress needs to act in the interest of families and communities by updating the Wire Act to ensure enforcement of federal law prohibiting Internet gambling.
Nick Frase is a government affairs research assistant at the Family Research Council, a conservative Christian organization.