An Analysis of Gaming News and Trends by Ken Adams
First Quarter 2019
Problem-Gambling: A Significant Issue
With the dramatic expansion of all forms of gambling, problem gambling has become becoming a significant social issue. It is one that the legal system and the gaming industry are going to have to address. Appropriately, Las Vegas is taking the first step. In December 2018, the Clark County Gambling Treatment Diversion Court heard its first two cases. The court was authorized by the Nevada legislature and signed into law by then governor Jim Gibbons in 2009. It has taken a decade to become a reality and only Las Vegas has taken advantage of the opportunity thus far. The intent of the law is to provide treatment for people who commit non-violent crimes due to an inability to control their gambling and their desperation to find money to fund it. One might say, “It is about time.”
Gambling has been spreading rapidly for thirty years. With the expansion, the absolute number of people at-risk to gambling addiction and the associated problems increased also. One of those related problems is embezzlement. Today, it is common to read in the newspaper stories of people who steal to gamble. The stories are like the tales of drug addicts common decades ago, where the addict would do anything - lie, rob and kill, to obtain money to buy drugs. Seldom, if ever, does a gambler commit violent crimes in search of the currency of wagering; i nstead, they cook the books so to speak; it is a white-collar crime. After the poor unfortunate addict has spent everything he/she possesses, in desperation they steal to fuel their habit. The victims are their families, employers, fraternal organizations and even churches. A few stories turned up in a recent random Google search to serve as illustrations. 
A pair of nuns in California embezzled half a million dollars from the tuition fund of the Catholic school where they worked. The nuns used the money for lavish and regular vacations to Las Vegas. When the theft was discovered the nuns had been enjoying trips to Vegas for ten years. The tuition-paying parents were angry and demanded justice, the nuns were apologetic and pleaded helplessness in the face of compulsion. In Pennsylvania, a 57 year-old business manager embezzled $4.3 million dollars from her employer; she had worked for the company for 14 years. She blamed an uncontrollable addiction for her actions. A policeman in Indiana took money from the Fraternal Order of Police lodge where he was the treasurer; he too was driven by a need to gamble. An accountant for the district attorney in Louisiana managed to get $1.6 million from the department’s funds for her wagering activities. An attorney in California used $3.5 million of clients’ money to gamble. In Idaho, an employee of a college embezzled an estimated $500,000 over a period of years. With cash in hand she went to Jackpot, Nevada and put it in the slot machines. One of the most creative was a Border Patrol agent who used an agency truck to smuggle marijuana to sell to feed his habit. 
The standard punishment for embezzlement includes incarceration, fines and restitution.  Often when a person is caught embezzling, they offer an excuse such as sick parents, disabled children, opioid dependency and gambling, all of which require money they did not have. However, the law does not recognize excuses, it recognizes the crimes. Taking an employer’s money is a crime and when people are caught they are tried and usually incarcerated; they are convicted criminals in the eyes of the law and society. Attempting to gain leniency, defendants recount their trials and tribulations, but thus far “gambling made me do it” has fallen on deaf ears. The courts have uniformly held that regardless of the defendant’s personal problems, when the crime of embezzlement is committed, the guilty party can expect to go to jail. However, a new trend is emerging where the courts dictate treatment rather than prison as the sentence. Courts are rendering judgments based less on moral grounds and taking addictions and other mental health issues into account in embezzling cases.
In the 21 st century the judicial system is more likely to see non-violent criminals as troubled rather than evil people. The change in perspective actually began in the 1970s. It was driven by several factors including overloaded courts, jails and prisons and escalating financial pressures on governments to provide social services. Those pressures made criminal justice officials and lawmakers more willing to look for alternatives.  They have been open to advances in the science of understanding and treating addictions. Research indicates that treatment is both more cost efficient and effective than prison. The result of the research was experimental special courts, called diversion courts, that use directed and enforced behavioral treatment rather than incarceration. The categories of behavioral problems covered by diversion courts are drug use, domestic violence, felony DUI and now addictive gambling.
The timing of including gambling addictions into the diversion court thinking is fortuitous. In the last thirty years casino and other forms of commercial gaming have spread from just Nevada and New Jersey to most of the other states in the union. There are 18 states with commercial gaming, 29 with Indian casinos, 44 have lotteries, 22 have horse racing and nationwide there are nearly a million slot machines. In total over a $100 billion dollars in gaming revenue is generated nationally; it is staggering. Slot machines create more behavior problems than any other form of gambling and not all slot machines are safely locked up in casinos or located at racetracks. Six states have let them move into residential areas.
Illinois, Louisiana, South Dakota, Montana, Oregon and Nevada have slot machines in locations other than casinos and racetracks. Pennsylvania will join them soon. The locations include truck stops, convenience stores, drug stores, fraternal organizations and bars. Illinois illustrates how deeply slot machines have penetrated into the life of an average citizen. In 2009, Illinois Governor Pat Quinn signed a law authorizing VLTs in non-casino locations. By December 2018, there were 30,694 VLTs in 6773 establishments in Illinois. By way of comparison the state’s ten casinos have just 9723 slot machines, 1000 less than in 2009. The spread of VLTs is particularly ironic given the history of casino legislation in the Land of Lincoln. Illinois put casinos on boats. The riverboats were originally required to sail, had limited hours of operation and a limit on all wagers. The requirements were intended to protect vulnerable, at risk people from easy access to casinos and gambling. To play blackjack or slot machines, a customer had to pay to board the boat and could only remain in the casino during the “cruise.” In some cases there was a limit on how much an individual gambler could lose on a single cruise.
Protecting the at-risk population was an element in the enabling legislation of most of the expansion between 1988 and 1998. Every time gaming legislation was debated, experts testified on the societal dangers of gambling and lawmakers took their testimony into account when crafting the legislation. Research indicated that 5-10 percent of the population was subject to gambling addiction. By isolating the casinos, those people were at least partially protected; in theory, the restrictions would keep the number of visits and spending by individuals to a minimum. But in the last twenty years, that public policy was mostly lost in the rush to use gambling as a way to solve governmental budget problems. Nothing illustrates the change in public policy more than allowing VLTs in retail and social settings. It was no longer necessary to travel more than a mile or two to find a slot machine. Access to gambling has been made simple and easy. It is the very definition of convenience gambling.
The estimates of the percentage of the population at-risk have not changed since the early legislative debates, but the absolute number of people exposed to gambling has grown exponentially. The increased exposure has led to many more people with behavior problems resulting from gambling and resulted in more crimes committed by problem gamblers. That is why the timing of Las Vegas’ diversion court is so important. Those addicted gamblers committing crimes to feed their addiction need help. The time has come for Nevada to develop a more understanding and effective approach to gamblers’ problems.
All of the states with gaming need a better approach to helping those impacted by legalized gambling.  Nevada is providing one possible model, hopefully, other states will follow suit. The alternative is to remain in the moral dark ages where criminals are bad people and anyone who takes money to gamble goes to prison. That is not a sustainable, long-term solution. The cost of the criminal justice system is too high. Even more significantly, as important as that cost is, there is a higher price to be paid. Incarceration of people with behavior issues that can be treated creates potential criminals, a social cost. Society loses their productivity while paying the costs of their imprisonment and upon release from prison the convicted criminals find it difficult to return to a normal life. 
It is a complicated issue and one that will not be solved quickly or easily. But the number of people addicted to gambling is not going to go down magically, nor will the number of crimes they commit. The genie is out of the bottle, there is no going back to a time when casinos were located far away in the deserts of Nevada, high in the mountains of Colorado or floating on rivers in the mid-west. It is incumbent on everyone concerned to work toward programs and systems that treat the people affected. It is no longer possible to deny the existence of vulnerable customers mixed in with the all of the other customers that can fully enjoy gambling without suffering any ill effects. Those who are affected need help, they need treatment and the criminal justice system should be part of the process.  Casinos, too, need to take steps to protect their at risk customers; they should look more closely at individual spending and intervene when it appears to be appropriate.  Like a bartender refusing to serve a drunk, casinos should have policies that recognize excesses. The American Gaming Association and its members have committed to a policy of responsibility. Some of the major casino corporations have developed even more extensive policies to protect and assist problem gamblers. Clearly with those policies and the diversion court, some progress has been made, but more needs to be done. Lawmakers, regulators and gaming operators all bear the responsible for protecting and assisting the people unable to enjoy gambling without injury.

But that is just my opinion, isn’t it?

Ken Adams