Compulsive Bettors : Lotteries--Too Much Temptation?

Richard Kaczor gazed with forlorn eyes at the pyramid of Michigan State Lottery tickets covering his kitchen table. Heaped before him were tens of thousands, perhaps hundreds of thousands, of 50-cent and $1 tickets, neatly tied in worthless little bundles.

“What I can’t understand, even now,” Kaczor said, “is, ‘Why?’ ”

Kaczor and his family are lottery losers. Big losers.

Kaczor has been fired from his job, his wife is in prison, the family is in hopeless debt and in danger of losing its home.

Experts on pathological gambling say the Kaczor family story and others like it are previews of the kinds of problems that will be created or exacerbated in California after the state lottery opens Thursday.

Gambling Frenzy

The family’s troubles began less than two years ago when Kaczor’s wife, Valerie, 32, went on a lottery gambling frenzy that lasted about 18 months. The suburban housewife, whose husband earned about $20,000 a year, began cashing bad checks and spending hundreds of dollars every day on tickets in the “Pick 3” and “Pick 4” state lottery games in which bettors try to guess the numbers that will be selected at official drawings held each evening.

Valerie Kaczor spent her days cashing bad checks, pulling related scams and buying lottery tickets. Using a home computer to select the hundreds of numbers to bet, she would occasionally win several thousand dollars and became convinced that she had worked out a computerized probability system to beat the odds.

$250,000 in Bad Checks

By the time it was over, she had cashed an estimated $250,000 in bad checks, had lost most of it on the lottery, spent some of it on luxuries and, on one occasion, had talked her husband and her father into helping her cash bad checks.

Valerie Kaczor, whom a psychiatrist has diagnosed as a compulsive gambler, is in prison serving a 3- to 14-year sentence.

Her husband was fired from his job of 16 years at a pharmaceutical company after he pleaded guilty to helping his wife cash a worthless money order and was placed on probation. Valerie Kaczor’s father also was put on probation after making a similar plea.

Richard Kaczor, 39, cannot find a job. He is collecting unemployment benefits, has declared bankruptcy and cannot make the mortgage payments on the family home.

The couple’s two children feel confused and hurt, and they miss their mother.

The reaction of officials to the Kaczor case has been mixed.

“Obviously, she does have a gambling habit,” FBI Special Agent Joseph Jackson said through a spokesman, “but by the same token she also was greedy and wanted to live the good life without working for it.”

“I think it is a sad case,” said U.S. Judge Horace Gilmore, who presided over one of the many criminal proceedings against Valerie Kaczor. “I seriously think the states ought to start reconsidering this whole lottery business.”

“The Valerie Kaczor case is an isolated case,” insisted Laurie Kipp, director of public relations for the Michigan State Lottery. “This is the only incident like this that we know of since the lottery started back in 1972.”

Experts on problem betting say, however, that when a state creates a lottery it also creates new gamblers, a small but significant minority of whom become pathological bettors who wreak painful and expensive havoc on themselves, their families and society.

Lotteries are the least common form of betting by compulsive gamblers, experts in the field say, but the number of problem gamblers who play the lotteries is steadily growing.

“The real issue is the availability of gambling,” said Valerie Lorenz, director of treatment for the National Foundation for Study and Treatment of Pathological Gambling, a private, nonprofit agency in Baltimore.

Pattern Emerges

“With the lottery,” she continued, “the housewife, who in the past would never gamble . . . now, when she goes to the supermarket, she’s going to be able to buy lottery tickets for $1 and then . . . she’s going to buy more tickets with larger amounts of money. That’s the pattern. . . .

“California,” she added, “already has compulsive gambling. With the lottery, they’re going to create more compulsive gambling. They’re going to have more crime, they’re going to have more sick people, more broken homes, certainly more mental health costs, certainly more bankruptcies, more welfare costs.”

There are stories of lottery-related problem gambling all across the continent:

- Glenwood Herbert Stout, 55, was recently released from federal prison after serving three years of a five-year sentence for embezzling $500,000 from a New Jersey credit union that he managed.

Stout said he spent most of the funds, which he stole over a 10-year period, to buy tickets in the Pennsylvania and New Jersey lotteries.

“You can get addicted to it,” he told The Times in a telephone interview. “And you just can’t stop.”

Stout’s wife of 31 years and the couple’s youngest son lived on welfare while the accountant was in prison.

- Patricia Yvonne Smith, 35, a reclusive bank teller in Toronto, was sentenced to 18 months in prison in October, 1983, after embezzling $183,000 from her employer and spending it on the Ontario lottery.

5,000 Tickets a Week

“She was buying about 5,000 tickets a week,” said Donald Angevine, who prosecuted the case. “We had it figured that she had to spend every waking hour either making up numbers, stealing the money or checking her numbers.”

Smith lived a lonely life in a sparsely furnished apartment. Apparently the only thing she bought with the stolen money besides lottery tickets was a second-hand piano.

“When the police came to her door,” Angevine said, “they found . . . big green garbage bags filled with receipts (lottery tickets) that lost.”

Smith’s compulsive lottery playing began after the breakup of a marriage that left her with financial problems, according to her attorney, Richard Stern.

“She got the idea,” Stern said, “that if she could just ‘borrow,’ so to speak, some of this money that she had her hands on every day and buy a whole lot of lottery tickets, that she would win and she could put the money back and that would solve all her financial problems.

“She was a gullible person who was very much affected by the hype (of lottery promotions),” Stern continued. “One of the points I made at the trial was when you have the government involved in the lottery, who is going to regulate the advertising so that the more gullible members of society are not going to be bamboozled into buying lottery tickets when they should be buying the necessities of life?”

- Carol de Gulis, 46, a mother of four, was put on three years’ federal probation in May, 1984, after pleading guilty to embezzling $38,600 from the New Jersey bank where she worked as an assistant manager. She spent the money on state lottery tickets.

Called an Illness

Defense attorney Kevin Callahan told U.S. District Judge Herbert J. Stern in federal court in Newark that DeGulis “had this gambling habit . . . simply a woman with an illness.”

“She finally got to the point,” Callahan said, “where she was out of her mind and didn’t know what she was doing. And she finally realized what she was doing. She went to the bank’s branch manager . . . and told him what had happened.”

DeGulis who was making restitution to the bank and was attending therapy sessions as well as Gamblers Anonymous meetings, told the judge:

“I ruined my marriage. I ruined my family. I’m sorry.”

“Where was she gambling?” Judge Stern asked.

“If your honor would believe this,” Callahan answered, “the lottery. . . . Not Atlantic City, not with a bookie or any illegal activity.”

“It also makes you wonder about these advertisements funded by the state,” Stern said. “ ‘Play, play, win. Get rich quick. Be an instant millionaire.’ This is the way we raise revenue today. Fifteen years ago, we used to prosecute people for that.”

Many pathological gamblers play the lotteries as well as some other form of betting, said Arnie Wexler, president of the Council on Compulsive Gambling of New Jersey.

Wexler said betting almost wrecked his own life before he quit in 1968 and became what is called a “recovering” compulsive gambler. He played the horses and cards and bet on sporting events, illegal numbers and the New York State lottery when it began in 1967.

“You can get hooked on anything,” Wexler said. “I was making $175 a week and I was buying $300 and $400 a week in lottery tickets. When the compulsive gambler needs to get his drug, which is money, he’ll do anything. If they have to beg, borrow or steal, they do it.

Broken Resolutions

“I remember I said I’d never borrow money from my family. I borrowed it. I’d never borrow money from friends. I borrowed it. I’d never take anything from the company I worked for. I did it.

“In the last stages of my gambling,” he recalled, “I would drive around in my car and say to myself, ‘Boy, this looks like an easy gas station to knock off.’ I was very close to that.”

Many habitual lottery players say they occasionally hit a moderately big win for several hundred or even several thousand dollars. But not all of them:

Jerry G. is a Gamblers Anonymous trustee in the Midwest and is not allowed under the organization’s rules to give his full name.

Now a bookkeeper for a large Chicago-area firm, Jerry G. joined the Alcoholics Anonymous-like group seven years ago when his wife threatened to leave him over his race track and lottery gambling.

“I’ve lost my paycheck . . . on the lottery,” he recalled. “I would stop at a gas station and if I didn’t have the money, the guy would put it on the credit card. He would put down ‘carburetor repair’ and I’d get $2 worth of gas and $20 worth of lottery tickets. . . .

“So my wife is in tears because the bills are coming in and we don’t have too much money for food. And I’m sitting in the washroom trying to scrape . . . the lottery tickets. . . . I felt like all I needed was one more scrape and there would be the numbers. . . .

‘I Could Cry’

“And I never won anything. I won 5 bucks, 2 dollars, that type of thing. . . . I knew people that won. Why couldn’t it be me? It just gets to you. It’s a fever that rages in you. . . . You’d pick up the paper and here’s somebody in the lottery winning millions. And why couldn’t it be me? I could cry right now because of it. It was never me.”

Jerry G. is 42 and says he and his wife regret that his gambling prevented them from having children when they were younger.

“Kids need money,” he explained. “I didn’t want to give my action money to some kid. . . . That was my money to gamble.”

For some compulsive gamblers, betting on the lottery comes in the last stages of desperation.

“The lottery is one step below the slot machine,” sneered a resident of the Baltimore treatment center run by the National Foundation for Study and Treatment of Pathological Gambling.

The resident, who asked to be identified only as Bob, is a New Jersey attorney facing criminal charges of fraud, diversion of trust funds, embezzlement, grand theft and passing bad checks--activity that occurred as he was losing $1 million gambling.

To Bob, gambling was the race track and casinos, not the lottery--not until he became desperate.

“Suddenly something that was a pure sucker’s bet was a way out,” Bob recalled. “I now could possibly hit the lottery, pay off all these debts and satisfy all these problems that were keeping me from sleeping and making me hate myself all the time. . . .

Wants to Break Even

“I practiced a speech,” he continued. “If I ever won the lottery and they asked me what I was going to do with the money, I’d say, ‘Break even.’ ”

Bob bet about $1,500 a week trying to win the state lotto game between March and July of 1985.

“I turned to desperation. . . . ‘Hey, here’s my way out.’ I was saying the same thing the poor person is saying. . . . The lottery is geared to the little guy on the street. It’s saying, ‘Here’s your way out.’ That’s why it’s wrong when a government takes it up.”

Most professionals in the field of compulsive gambling are not seeking the abolition of state lotteries. They are, however, seeking state funds for research and treatment of problem gambling.

A handful of lottery states, as well as Minnesota, which has no lottery, have funded such research or treatment.

The legislature in Iowa, where a state lottery began in August, mandated that 0.5% of the lottery gross go to a “gamblers assistance fund” to be administered by the state Department of Human Services. It is estimated that about $500,000 a year will go into the fund for treatment of problem gambling.

“Some people referred to it as ‘conscience money,’ ” said John Fairweather, legislative liaison officer with the Iowa Department of Human Services.

In California, attempts to provide such “conscience money” have failed.

Bill Dies

Sen. Robert Presley (D-Riverside) authored legislation to use lottery funds for a modest $125,000 to $150,000 gambling research project at the University of California, Riverside, but his measure died in the Senate Governmental Organization Committee.

After the failure of Presley’s measure, two UC Riverside professors, Durand F. Jacobs and Robert F. Singer, took the case for financing a research project directly to the California Lottery Commission on Sept. 12, but the commissioners took no action.

“The issue,” said Jacobs, a psychologist and an expert on pathological gambling, “is that by actively promoting the lottery, the state makes gambling legitimate. It makes gambling OK. . . . Therefore my position is that the state bears a direct responsibility to identify and reduce the casualties.”

The lottery is not the only form of legalized gambling in California, counters William J. Johnston, vice chairman of the state Lottery Commission.

Ubiquitous Problem

“We just didn’t respond (to the research financing request),” he said, “because the issue of gambling permeates not just the lottery world. It’s in the race tracks, it’s in the card clubs that are legally approved. We just didn’t feel that we had an immediate obligation.”

Maybe problem gambling will be studied by the Lottery Commission in the future, Johnston said, but getting the lottery started is the top priority.

“I think we have an obligation to do some research and some studies on our own,” he added. “I think that ultimately we will want to do something. . . . To date the commission hasn’t deemed that one of its priorities. . . . “We’ve really got to do our start-up operations,” he said, “and maybe at some future date downstream we might take a look at it.”