Congressman Barney Frank is one of our most able and progressive legislators. I usually agree with him, but this time he has it wrong–a New Bedford casino will not bring the benefits he expects.

-First, extensive experience elsewhere shows us that casinos haven’t delivered on their economic promises.

-Second, the issue here is not prohibiting gambling, as Frank argues, but whether the government should promote gambling.

-Third, Frank is just not correct when he says this is the way Congress decided to compensate Indians for past injustices.

-And finally, the Legislature is not considering simply a New Bedford casino, but rather that casino as part of a larger plan involving casino-style gambling throughout the state.

After conducting the first national study of legalized gambling in the United States since the 1970s, we found growing government dependence upon gambling more troubling than many community leaders initially realized. Along with new gambling revenues, many communities discovered they also had to live with serious new costs. Casinos siphoned away consumer dollars from other regional businesses and, with more gambling being promoted, problem gambling rose dramatically; so did unpaid debts, forged checks, bankruptcies, crime, suicide, domestic violence, and the cost of law enforcement.

As for benefits to local business, no less an authority than casino owner Steve Wynn, CEO of the Mirage Corporation, told an audience of Connecticut business people in 1992 that this was a myth. “It is illogical to expect,” Wynn said, “that people who won’t come to Bridgeport and go to your restaurants or your stores today will go to your restaurants and stores just because we happen to build this building here.”

Donald Trump agreed. “People will spend a tremendous amount of money at the casinos,” he told the Miami Herald in 1994 when Florida was considering casinos–“money that they would normally spend on buying a refrigerator or a new car. Local businesses will suffer because they’ll lose consumer dollars to the casino.”

In Atlantic City, there were 243 restaurants before casinos; by 1992, there were 146. Since the introduction of casinos, that city has lost one-third of its local businesses. Despite casinos, Atlantic City continues to have one of the highest unemployment rates in New Jersey.

Frank points to the supposed economic benefits of the Connecticut Foxwoods casino. Yet no serious impartial economic impact study has been done there. What we know, at least from newspaper reports, is that Mystic Seaport, a major tourist destination near Foxwoods, has seen its revenues substantially decline in recent years.

We also know that visits to compulsive gambling counseling services have dramatically increased in Connecticut since Foxwoods opened. This is consistent with national trends. After Iowa introduced casinos, problem gambling there more than tripled. Louisiana created more new gambling ventures than any other state in the early 1990s and now finds itself with the highest rate of problem gambling in the country.

Compulsive gambling is not only a personal tragedy for those affected, it is also an economic disaster for the rest of us. It has been estimated that each new problem gambler costs the public approximately $14,400 a year in unpaid debts and increased criminal justice costs.

Frank argues that a New Bedford casino will keep Massachusetts’ gambling dollars in Massachusetts–the proverbial “fighting fire with fire” argument. Casino supporters also argue that it will attract a massive influx of tourist dollars. It’s not all that simple. The experience in most of the new casino states is that their ventures attract mostly locals–what are called “convenience gamblers”–not tourists. A New Bedford casino will trap some of our dollars, but it will also dramatically increase gambling here, resulting, as has happened elsewhere, in more problem gamblers and higher costs for their destructive behavior. Fighting fire with fire just gives us a bigger fire.

Frank argues that people should not be denied the opportunity to gamble. I agree; I certainly don’t want government interfering with my Friday night poker game. But the proposals being considered by the Legislature are not about prohibition, but about whether the government should promote gambling as a tool for economic development.

In our nationwide research we did not find one instance of a citizen’s organization, not funded by the gambling industry, arguing for more opportunities to gamble, and Massachusetts citizens are not clamoring for more chances to gamble closer to home. Rather, the proposals before the Legislature are about an economic policy in which the Commonwealth, certain local governments, certain private gambling corporations, and the Wampanoag Tribe are hoping to share the financial benefits of citizens’ gambling losses.

The 1988 Indian Gaming Regulatory Act (IGRA), which opened the doors to tribal-run casinos, came after a 1987 Supreme Court decision saying that Indian tribes, as sovereign nations, had the right to run gambling operations on their own land as long as a state allowed any similar ventures. For example, if charities were allowed to run “Las Vegas Nights,” tribes could also offer casino-style gambling. Congress hoped that tribes would benefit from these enterprises, but the legislation was not, as Frank suggests, a deal in which land claims were “swapped” for the right to run casinos.

The idea was that tribes–and not the states–should control developments on tribal lands. In the case of the Wampanoags, this means their reservation land on Martha’s Vineyard. Since neither the tribe, nor the other people of Martha’s Vineyard, want a casino there, the Wampanoags, using a special section of IGRA–one that has been challenged in the courts as unconstitutional–proposed having the tribe take ownership of land in New Bedford for a casino instead. The plan wasn’t devised to compensate the Wampanoags, and justifying it on that basis is simply misleading.

The proposals currently before the Legislature involve more than just a New Bedford casino; they include at least a casino in Holyoke and 700 slot machines at each of the state’s four race tracks, effectively turning them into mini-casinos. The New Bedford proposal is part of a high-stakes political process in which it has been reported that the tracks have supported the New Bedford casino in return for the Wampanoags’ support of the tracks’ slot machines. Other communities and private interests have also been lobbying for a piece of the action; for example, some politicians argue for a Fall River casino.

Frank concentrates his attention solely on New Bedford, but it is naive to imagine that with millions being spent on lobbying to expand other casino-style gambling in the Commonwealth, this is the only proposal at stake. What legislators and the public must ask is: Do we want government to promote more gambling? Will it bring real benefits, or a larger bill to pay when the chips are cashed in?

Robert Goodman is the author of The Luck Business (The Free Press, 1996) and was director of the United States Gambling Study funded by the Ford Foundation and the Aspen Institute (1994). He teaches at Hampshire College in Amherst.

Frank’s Defense

During my legislative career, I’ve encountered certain debating patterns which people use when they lack confidence in the public appeal of their arguments. Mr. Goodman’s response exemplifies several of these.

1. Inconsistency. Mr. Goodman talks confidently of the experience we have had in a wide variety of settings–except when it comes to the closest analogue to what we are debating. That is the enormously successful casino in Foxwoods, run by an Indian tribe, which has been a source of many jobs, has brought the tribe very large revenues, much of which they have reinvested in the area, and has produced virtually no increase in the sort of street crime that impinges on neighbors. After talking about gambling all over the country, Mr. Goodman says that he really can’t say very much about Foxwoods because there has been “no serious impartial economic impact study…done there.” Immediately after telling us that, he quotes “newspaper reports” that the Mystic Seaport several miles away, and unrelated to the Foxwoods casino, has suffered some revenue loss. Why is he confident in the reliability of newspaper reports about Mystic Seaport, but feels unable to draw any conclusion about what is going on in Foxwoods? Is he eager to pass along negative information, but determined to ignore good news? I take his reticence to mean that the Foxwoods experience is in fact a good argument for the likelihood of success of one or two similar casinos in Massachusetts.

2. Exaggeration of the scope of the opposition proposal. We support at most two casinos in Massachusetts–one in the Southeast, and another in Western Massachusetts (if public support there is as strong as it has been throughout Southeastern Massachusetts). Mr. Goodman refers to this as “casino-style gambling throughout the state.” Once again the Foxwoods analogy is clearly troubling for him. Massachusetts is twice as big as Connecticut, and two casinos in widely separated parts of Massachusetts are likely to have an effect similar to one in Connecticut. Mr. Goodman understandably does not want to debate the impact of one or two casinos in Massachusetts, but rather wants to argue against a “state-wide” network of casinos, a proposal which has no significant support, and is not part of the current debate. The argument that you should oppose a particular proposal because some multiple of that proposal would have negative consequences is the argument generally used by people who fear that their real opposition to the underlying idea is insufficiently supported. (There is only one argument to make for the proposition that the establishment of one casino would lead to many more: that it would be so productive of economic benefit and so little damaging in its impact, that everybody else would want one.)

3. An unwillingness to accept the consequences of one’s argument. Mr. Goodman says that he is not for prohibiting gambling, but is only seeking to block the government from promoting it. But we are not asking for government promotion. What the Wampanoags are asking for is a change in the law so that they can legally open up a casino. The law now prohibits gambling, including Saturday night poker games for money. So I understand why he is uncomfortable defending prohibition, since this has been a notably unsuccessful policy in other areas. Or is he really for repealing the law, putting the government in the position neither of promoting nor of prohibiting the activity? (That in fact might lead to a state-wide casino network.)

The proposal I support is for the establishment of one or two casinos in parts of Massachusetts where there is high unemployment, as a means of providing jobs for people in those areas, based on the willingness of adults to gamble. The success of Foxwoods means that we are highly likely to succeed here as well, especially since so many of the Foxwoods patrons are Massachusetts people, many of whom would presumably prefer to gamble closer to home. And directly contrary to Mr. Goodman’s point that he has seen no “instance of a citizens organization not funded by the gambling industry arguing for more opportunities to gamble” the New Bedford area is rife with citizen organizations who see a casino as an important job source and are actively pressing for it.

Mr. Goodman apparently believes we should prohibit gambling because he disapproves of the activity for most people–exceptions being made apparently for himself and his fellow poker players–and he believes this even if the establishment of one or two casinos might produce hundreds of jobs for Massachusetts residents who now find it hard to get jobs. I close by asking him three questions which seem to me to get at the heart both of the debate about the two casinos and the real nature of his objections:

1. If we were able to establish only one or two casinos in Massachusetts, in areas of high unemployment, would Mr. Goodman be in favor of that?

2. Does Mr. Goodman really not have any good idea about whether or not Foxwoods has generated a good deal of revenue for the Pequod Tribe, much of which they have reinvested locally, and has provided a significant number of jobs?

3. Does Mr. Goodman favor repealing the laws against gambling, so as to put government in a neutral position, neither prohibiting nor promoting it?

Goodman’s Rebuttal

Since Congressman Frank is interested in “debating patterns,” let’s look at his own, but let’s not forget about the core issue here–the social and economic consequences of government-promoted casino gambling in Massachusetts.

Frank relies on two approaches: 1) misstate the facts, and then ignore the corrections, and 2) avoid uncomfortable realities.

1. Misstatements of Fact. Frank states flatly, “The law now prohibits gambling, including Saturday night poker games for money.” He’s wrong. In case he hasn’t noticed, there is legal betting on the state’s lottery games, including Keno, pari-mutuel betting at the state’s four race tracks, and charitable gambling activities, including bingo for money and “Las Vegas Nights,” run by a variety of organizations, including churches. Although Frank tries to scare people with his analogy to prohibition, he knows that the police don’t raid poker games in people’s houses or nursing home bingo games. Massachusetts residents have plenty of opportunity to gamble; in fact, they spend more per capita on the lottery than residents of any other state in the country.

The law also allows the Wampanoag tribe to operate a casino on their reservation land on Martha’s Vineyard. This is not, as Frank said in his original statement, in exchange for giving up land claims. He simply ignored this correction and the issue of where a Wampanoag casino should be this time around.

2. Avoiding Uncomfortable Realities. In his first article, Frank discussed only the idea of one casino in New Bedford. Now that I have pointed out that this was not the plan contemplated by Governor Weld and the Legislature, he at least admits that it’s actually “one or two” casinos that could be built–one in New Bedford and one in Western Massachusetts. And although he may want to avoid it, the reality is that Senator Thomas Norton, a powerful legislator, has consistently argued for a casino in Fall River.

And Frank totally avoids the issue of the race tracks, even though Attorney General Scott Harshbarger has said that “The race track owners are running the show,” and an aide to Governor Weld publicly admitted that unless the tracks got slot machines, the Legislature was unlikely to approve the New Bedford casino. In addition, the Massachusetts Restaurant Association has stated that although it opposes casinos, if any are legalized, it wants the right to have slot machines in all bars and restaurants. Frank certainly is aware of all this, and ought to know that in politics if government gives one group a lucrative franchise, a lot of others will be in line at the trough.

Frank also avoids looking carefully at the Foxwoods experience. It’s true, as he says, that Foxwoods has been an “enormously successful casino” and “has brought the tribe very large revenues.” But this is not the only measure of success our legislators need to consider. What about the costs?

Connecticut and Massachusetts have yet to do careful research calculating them. But in Wisconsin, where tribal casinos have operated successfully since the early 1990s, the public costs of the increase in compulsive gambling have been substantial. A 1995 study, conducted by a team of University of Nevada-Las Vegas and Georgia Southern University researchers, estimated that increased criminal justice activities and lost work productivity because of more compulsive gambling cost Wisconsin residents and businesses a minimum of $160 million per year. In Minnesota, where again successful tribal casinos are among the largest employers in the state, a 1995 study indicated that personal bankruptcies related to problem gambling had increased by about 20 percent.

Frank attacks me as a person who disapproves of gambling “for most people.” But I don’t disapprove of gambling for anyone, as long as the person doing it isn’t hurting others. My concern–which Frank consistently avoids–is how government itself is becoming addicted to the idea of using the easy fix of gambling to raise public revenue and solve serious unemployment problems.

This past fall, Attorney General Theodore Kulongowski, who directed the Governor’s Task Force on Gambling in Oregon, warned: “In Oregon we are paying a heavy price for our dependence on gambling…. perhaps other states can learn from our mistakes.” Oregon, like Massachusetts, has a lottery, Keno, and race tracks, and it also has tribal casinos and video lottery games. When state budget problems arise, or existing gambling ventures, public or private, feel the competition from new ones, political pressure escalates to add yet more gambling. “The truth is,” said Kulongowski, “any state that depends heavily on gambling for revenue will find itself under pressure to increase gambling.”

The costs to the public of the government’s use of gambling as a solution to economic problems is really the issue for the Legislature and people of Massachusetts to debate. Let’s not hide this under the banner of freedom for adults to gamble or reparations for land claims to the Indians. The Congress is concerned enough about the costs of the explosion in legalized gambling that it recently passed legislation creating a National Gambling Impact Study Commission to investigate the problem. We in Massachusetts should think at least as hard about this before we move ahead.

At the end of his response Frank asked me three questions–the kind that lawyers often refer to as “when did you stop beating your wife” questions. If he really wants to know more about my views on gambling as public policy, I suggest he read the findings of the 1994 United States Gambling Study, which I directed, or my recent book, The Luck Business. Maybe then he’ll see why I believe the case for casinos in Massachusetts hasn’t yet been made.