gambling scam on America's poor

Mousey

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Opinion
The gambling scam on America's poor By Mark Lange,
Wed May 2, 4:00 AM ET



San Francisco - Some scandals don't involve illegal activity they're just outrageous and unjust. Take gambling in America. Abetted by Congress, legislatures from 48 states now sponsor gambling operations and lottery monopolies to balance their budgets on the backs of their poorest and most vulnerable citizens while basking in the virtue of fighting tax increases.

Three decades ago, there were no casinos outside Nevada, and only 13 states ran lotteries. Today 19 states support commercial gambling in densely populated markets near interstates, 28 states host Indian casinos, 41 run lotteries, and 43 allow track-side betting. Even so-called riverboat casinos have expanded rapidly as states lift wager limits to permit casinos they couldn't sanction on solid ground. Only Utah and Hawaii still ban gambling.

States have stretched legal loopholes to ludicrous lengths for the same reason Jack Abramoff wielded his influence: They want the money, and the money is there for the taking. US gambling interests have seen an eightfold increase in revenues since 1982. Last year, Americans legally wagered more than $1.1 trillion. Along the way they lost more than they spent on movie tickets, recorded music, spectator sports, video games, and theme parks combined.

Clearly, America's appetite for what industry officials benignly call "gaming" has grown. It's all legal, so what's the big deal? Here's the scandal: In 1999, the bipartisan National Gambling Impact Commission found that 80 percent of gambling revenue comes from households with incomes of less than $50,000 a year.

More remarkably, players with annual incomes of less than $10,000 spent almost three times as much on gambling in aggregate, real dollars as those with incomes of more than $50,000. With the aggressive encouragement of state governments, US gamblers most of them scraping by on limited incomes had to lose $84 billion last year in casinos and lotteries for the states to raise $24 billion in new revenues.

Consider Massachusetts, a typical example of a state under pressure to legalize casinos. With 16 percent of adults leaving the state to gamble in the past year, advocates argue that legalization would "recapture" lost revenue from these gamblers and generate $350 million in income to the state from slots alone.

On the surface, that appears to represent only a $475 annual loss per player. But industry executives will tell you that 85 percent of their revenue comes from 20 percent of the players. So I called a Massachusetts state legislator's office that is fighting the introduction of casinos in the state to help me with the math.

"For the state to make its $350 million on slots after payouts," an aide told me, "147,000 gamblers about 3 percent of the entire adult population have to lose a total of $496 million. That's an average annual loss of $3,374 apiece." Incredible, perhaps, until you've seen the transfixed expression on the face of a "player" at one of these machines.
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for the rest of the piece at the Christian Science Monitor
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The math and 'logic' in this opinion piece confused the hell out of me. I'll be the first to admit that I am a far cry from a math whiz, but I used to think I was of near normal intelligence...

What does this mean: "85 percent of their revenue comes from 20 percent of the players" ?


One quote says:
"For the state to make its $350 million on slots after payouts," an aide told me, "147,000 gamblers about 3 percent of the entire adult population have to lose a total of $496 million. That's an average annual loss of $3,374 apiece." Incredible, perhaps, until you've seen the transfixed expression on the face of a "player" at one of these machines.

Yet earlier it was acknowledged that...
Consider Massachusetts, a typical example of a state under pressure to legalize casinos. With 16 percent of adults leaving the state to gamble in the past year,


I should never try to make sense of anything when I've got a 101 fever.... I'll take an aspirin and try reading it again later. Maybe it will make more sense....
 

SlotsWizard

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Thank you for that post, Mousey.

What does this mean: "85 percent of their revenue comes from 20 percent of the players" ?
For simplicity, let's assume there are 100,000 players and the total revenue is the quoted $350 million. 85% of that revenue is $297.5 million, meaning that that $297.5 million comes from only 20,000 (20% of the 100,000) players, an average loss of $14,875 per player. The remaining $52.5 million comes from the other 80,000 players, which is an average loss of only $656.25 per player.
 

soflat

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Florida
That's pretty interesting. I've been wondering where all the money these new casinos make is coming from. It used to be such a novelty to go somewhere (Nevada or New Jersey) and gamble. Now it is almost everywhere.
 

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