Odds Are, They Have the Bottom Line on Gambling

I could hardly wait to share with our contacts at University of Nevada news of my windfall: A $2 payoff on a quarter slipped into a slot machine as I’d dashed from plane to rental car booth at Reno-Tahoe International Airport.

My news elicited indulgent smiles and a collective lifting of eyebrows. These people had heard it all before: They’re the staff of the university’s Institute for the Study of Gambling and Commercial Gaming.

Louis Phillips, a former president of Harrah’s-Nevada and now professor of gaming management at the university, suggested that I not tempt fate leaving town. Airport slots offer poor odds, he explained--”They figure you’re not coming back.”

At the institute, gambling in all its guises is the game. Strictly academically, mind you. Here on the campus, institute staff research and analyze issues surrounding legalized gaming--from parents who leave their kids unattended at casinos to gambling’s rise to respectability to the currently hot topic of gambling on the Internet.

The institute is a source of information for legislators, political and social scientists and others assessing the broad social impact of gambling.

Ask institute director William R. Eadington what he and his staff of four bet on and he’ll tell you, “Virtually nothing.”

They know that gamblers rarely prosper. They can cite the odds. But the focus of their research is on the regulation, legalization and social impact of gambling.

Issues such as:

* The link between gambling and crimes such as embezzlement and fraud.

* The economic and political spinoffs from gambling.

* Destructive behaviors of the pathological gambler.

* How changing mores and ethics have opened the door to widespread legalization.

Mention gambling, Eadington says, and there are two equally vocal camps: “One side says nothing bad happens when casinos come to town. The other side says nothing good happens.” The institute, founded in 1989 and unique among the nation’s universities, sides with neither. Its role is that of interested observer.

Every three years, scholars, regulators and entrepreneurs gather in a major international city under institute auspices to discuss gambling’s worldwide impact. These conferences have spawned four books that provide fascinating glimpses into the history of legal gambling in modern America--how it came out of the “sin cities” of 1930s Nevada to evolve into glitzy Las Vegas casinos and then spread to cities large and small nationwide.

Gambling--or gaming, a term connoting greater respectability--is, Eadington says, “an industry in tremendous transition” from its pariah status of the ‘60s, when the mob element prevailed in Las Vegas. It has become an industry embraced by Wall Street and by millions of Americans to whom it is just adult play. “We’re about halfway along the path from illegitimacy to legitimacy,” Eadington says.

Neon-bedecked casinos have sprung up from Atlantic City to Reno, replacing seedy roadhouses where an earlier generation gamed. But one thing hasn’t changed: “In most American casinos,” Eadington says, “the players gamble, but the casinos do not.”

All forms of commercial gaming combined in the United States took in $44.9 billion in gross revenues, half of it from casinos, in 1995. In California, gross revenues from gambling were $3.2 billion, including $1.1 billion from the state lottery. It’s estimated that Native American gaming, much of it from 14,000 electronic games now in legal limbo, brought in another half billion dollars.

“California has a major industry that needs to be regulated in a modern context,” from card rooms to racetracks, Eadington says. In May, the watchdog Little Hoover Commission’s study of California gambling was put on hold in the wake of a lawsuit charging a conflict of interest in the panel’s hiring of consultant I. Nelson Rose, a Whittier Law School professor who has represented gambling interests.

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At the Institute for the Study of Gambling and Commercial Gaming--an umbrella organization under University of Nevada, Reno’s School of Business--economics professor Eadington and his staff of four also teach courses ranging from diversity in the casino workplace to the psychology of gambling to 15 undergraduates majoring in casino management.

Gaming presents “a legitimate career opportunity for a whole bunch of young men and women,” says the university’s Phillips, despite a flattening of casino revenues in Las Vegas as other jurisdictions legalize casinos and riverboat gambling.

In the newest area for the group’s research, gambling has come to cyberspace, available on the Internet 24 hours a day to millions of onliners worldwide. A host of entrepreneurs--most based offshore in the Caribbean--lure them with virtual slot machines complete with bells, bars and sound, and invite anyone 18 or older to click in a credit card number and play blackjack or baccarat.

“With Internet gambling,” Eadington says, “you fulfill people’s worst fears”--gambling gone amok, without constraints. It remains to be seen how willing governments will be to ban or bless it.

The potential exists for online operators to stack the deck, but, he says, if it’s widely legitimized, “You might see big accounting firms verifying the integrity of the games and the integrity of the paybacks.”

If you’re wagering by laptop, are you breaking the law? “You might be,” Eadington says. The jury is still out, though two states--Minnesota and Oklahoma--have brought suit against operators and suggested they may go after consumers.

The nine-member National Gambling Impact Study Commission, appointed by President Clinton and Congress, has just begun a two-year study of how gambling, and the wagering of $400 billion a year, affect Americans’ lives.

No one has ever promoted gambling for its goodness. Says Eadington: “Historically, gambling is one of the vices, together with tobacco, drugs, sex, rock ‘n’ roll.” But because so many Americans do it, there is little heart for enforcing anti-gambling laws.

Remember when Florida police raided a poker game in a senior citizen trailer park, arresting eight players and confiscating $22? Soon afterward, the sinners, wearing “Largo Eight” T-shirts, were Johnny Carson’s TV guests.

Pro-gambling factions have been so successful in promoting gambling as a bailout for ailing local economies and a way of creating tax bases that, Eadington says, it has become sort of “the late 20th century transformation of Disneyland.” With lotteries in 37 states and casinos in 27, he estimates that 75% of adult Americans gamble. Only Utah and Hawaii bar gambling.

“The morality argument is dead,” Rose, the controversial figure in the Little Hoover Commission flap, has stated. “Once churches started running bingo games, they lost the right to say that betting on a horse race is a sin.” Others tie the rapid rise of gambling to a general decline in morality.

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The University of Nevada, Reno’s Phillips cautions, though, that the industry “has to police itself more effectively [or] find itself in exactly the same position the tobacco industry does now. Problem gambling is consistent and persistent, and it’s not going to go away.”

Although the National Coalition Against Legalized Gambling links 40% of all white-collar crime to gambling, and others cite statistics tying it to divorce, bankruptcy and suicide, the institute finds most data too intangible to be verifiable.

For example, says the institute’s Mark Nichols, one Tennessee county has the nation’s highest bankruptcy rate--but is that because of casino gambling in nearby Mississippi or because Tennessee doesn’t require car insurance?

Without better regulation, Eadington sees the potential for widespread industry scandals. The issue of lax parenting around gambling made headlines in May when a 7-year-old girl was slain in a Nevada casino as her father gambled. But Judy Cornelius, associate director of the institute and a former Nevada parole officer, asks, “When you see baby strollers between the slot machines at 2 in the morning, is that the casino’s fault?”

Can we expect a gambling backlash? Possibly, says Eadington--if in the long run communities and states that have legalized gambling “as a means to an end” discover that the pot of gold at the end of their rainbow has turned to dust.

“We’ve decided we don’t like prohibition, but we haven’t really decided how much gambling we want. We’ve sort of blindly allowed political and economic forces to decide how we should be protected from its excesses.”

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A Brief History of Gambling

17th century: In Venice, the doge decrees establishment of a casino to give employment to ne’er-do-well aristocrats and get them off the public dole.

1791: Post-revolutionary France is gripped by a mania for gambling, formerly a favored pastime among the royals. The Duke of Orleans opens his Paris home, the Palais Royal, to commercial dice and card games. (Alas, the duke has little time to enjoy his windfall; in 1793, he is beheaded.)

1931: Nevada is the first state to legalize casino gambling.

1946: The Fabulous Flamingo opens in Las Vegas, putting the Strip on the map.

1957: Gamblers Anonymous, a 12-step program, is born in Los Angeles.

1964: New Hampshire is the first state to rediscover the once-banned state lottery.

1966: Howard Hughes arrives in Las Vegas with $500 million from sale of his TWA holdings and starts snapping up casino-hotels.

1978: Casinos open in Atlantic City.

1988: Indian Gaming Act spawns lucrative reservation industries and ongoing battles over what’s legal and what’s not.