Gambling parasite invades New Mexico

A city employee in Espanola with a gambling problem is dismissed after a $40,000 budget shortage is discovered. A Roman Catholic Priest in Las Cruces is removed from his parish after it is uncovered that he embezzled thousands from church coffers to feed a gambling addiction. A grandmother who had previously had no criminal record robs the Camel Rock Casino at gunpoint because of gambling problems. These people and thousands of similar situations are part of the cost of gambling in New Mexico.

Casinos have been running with or without legal compacts in New Mexico for over four years. Slot machines have proliferated off-reservation at two racetracks, and are getting ready to appear at local fraternal and veterans establishments and at least a couple more racetracks. This has had an enormous detrimental impact on the economy and social structure in New Mexico, and the continued expansion will increase the cost.

Gambling’s cost to society has been described with various apt metaphors. Professor Robert Goodman, in his work, "Legalized Gambling as a Strategy for Economic Development," describes the economic impact of gambling as economic "cannibalism." Professor William Thompson, Chairman of the Department of Management & Public Administration at UNLV, in a study of riverboat gambling in the state of Illinois, described the local impact of the casinos as "economic strip-mining." Professor I. Nelson Rose of the Whittier Law School in Los Angeles, describes gambling as an "economic black hole," inexorably sucking the revenue out of the local communities. One of the earliest gambling metaphors was introduced by Professor Paul Samuelson, Nobel Peace Prize winner in economics, who called gambling "parasitic," saying that gambling added nothing to a nation’s economy, but rather drained vitality from it.

I was attracted by Professor Samuelson’s "parasite" metaphor because of my biological science background, and I would like to expand on that metaphor. I will also refer to various local and national studies that show specific evidence of the "parasitic" cost of commercial gambling on New Mexico.

Many species of animals are frequently afflicted by parasites of one sort or another. Where the animal host resistance is great and the demands of the parasite are small, the host often survives and frequently prospers, although at a reduced performance level. Where the host resistance is diminished and/or the demands of the parasite are large, the animal host often becomes clinically sick, and some animals are depleted to such a degree that they die from the parasitic infestation.

The most recent state-wide study of which I am aware is one published on May 18, 1999, by William N. Thompson, Ph.D., Chairman, Department of Public Administration, UNLV, and Frank L. Quinn, Ph.D., Carolina Psychiatric Services. It is titled, "An Economic Analysis of Machine Gambling in South Carolina." The study included some pretty disturbing interviews with local Gambling Anonymous members, and studied data showing significant increases among these people of suicide attempts, bankruptcies, criminal activities, incarceration, drug and alcohol abuse, and divorces. One of the most significant economic insights was reported toward the end of the study, which stated, "The bottom line is that machine gambling is a major cost for the state of South Carolina. The society and economy of South Carolina looses over $424 million each year because of the machines. And this assessment downplays about all of the costs identified."

The U.S. Congress created the National Gambling Impact Study Commission in 1997, and commissioned it to study the economic and social impacts of gambling in America. The Commission hired NORC, a research firm, to look at the impact of compulsive gambling, and they came up with some important results. The study concluded, "based on criteria developed by the American Psychiatric Association, we estimate that about 2.5 million adults are pathological gamblers, and another 3 million adults should be considered problem gamblers." They also concluded, "15 million adults are at risk for problem gambling." There have been several major studies in recent years that find higher numbers of compulsive gamblers than this study does, but they all reinforce the notion that a substantial portion of our population, numbering in the millions, is caught in the thrall of compulsive gambling, ruining their lives and the lives of their families.

The NORC study also determined that, "people are about twice as likely to be problem or pathological gamblers if a casino is within 50 miles of their home." Since this applies to almost 2/3 of New Mexico’s population, it is a serious finding, combined with the fact "that pathological gamblers are far more likely to commit crimes, run up debts, damage relationships and kill themselves."

The New Mexico Department of Health, along with CASAA from the University of New Mexico, released a report in early 1997 titled "New Mexico Survey of Gambling Behavior 1996." The report stated that "based on 1995 population estimates, approximately 40,000 adults experienced serious problems and 137,000 adults experienced low to moderate problems due to gambling in the past year." The heaviest impact reported on any category was on female Hispanics, who had a 44% rate of serious problem gambling. If any other health problem, such as pneumonia, hanta virus or lime disease, afflicted 40,000 of our citizens, the state would mobilize as never before to combat the problem. But, since these diseases have no lobbyists and make no political campaign contributions, they are vigorously attacked.

The New Mexico report goes on to relate that "of the population estimated to have experienced serious problems, 71% are estimated to be Hispanic, 23% non-Hispanic White, 3% Indian (all males) and 4% Other (all males.)" The report related that 12.7% of the population aged 18 to 20 years old had serious problem gambling problems, as well as 8.3% of the population earning less than $10,000 per year, and 11.0% of the population with less than a high school diploma.

It is very clear from the State Health Department report that the most serious problems were being experienced by those in our state least capable of handling those problems---the young, the poor, and the uneducated. The study didn’t even LOOK at the problem of adolescent gambling, where most authorities in this country determine that the compulsive gambling rate is higher than in the adult population.

A report was done by the New Mexico Taxation and Revenue Department detailing the economic costs of tribal gambling to the state. The study was released in November 23, 1998, and was titled "New Mexico’s Indian Casino Gambling Economic and Revenue Effects." This study reports on the cost of casino gambling to the New Mexico economy, state and local tax revenues, and looks at the cost to specific industries.

The report discloses on page 2 that about $1.0 to $1.2 billion per year may have been diverted from taxable gross receipts, and that, "associated with this change in tax base, gross receipts tax revenues might have been greater by $40 to $50 million per year for state general fund and $20 to $25 million a year for local governments." A billion dollars a year diverted from the pre-existing New Mexico economy is a huge blow to the financial well being of the state.

Various "experts" have puzzled over the strange phenomenon of our flat economy the last four years, while most of the rest of the U.S. has been in a financial boom. They have also been alarmed at over 35 months of record setting bankruptcies in the state. It’s true that bankruptcy rates have been rising nationally, and according to recent studies, casinos have had a significant effect on that national trend. A consortium of national banks and lending institutions hired SMR Research of New Jersey to do a study of the influence of casinos on bankruptcy rates. They concluded that bankruptcies were significantly higher in counties close to casinos, and much higher if there were five or more casinos close to a county.

The New Mexico Taxation and Revenue report has revealing graphs that show a dramatic drop in taxable gross receipts for the state, as well as a substantial drop in taxable receipts for a category called "Total Retail." The graphs get very specific and show the significant economic cost to the following categories: "Eating and Drinking Establishments," "Bars, Liquor by the Drink," "Apparel and Accessory Stores," "Furniture Stores," "Hardware Stores (Retail)," "Building Materials," and "Hotels, Motels, Etc." All these industries had significant reversals dramatically consistent to the rise of casino fortunes.

The benefits to the state are few. Many public officials have benefited from campaign contributions from the gambling industry. Their contributions have skyrocketed in the last four years and have exceeded every other industry. People who enjoy gambling have an increased entertainment venue. A few thousand people have been employed by the gambling industry, but business declines because of the economic impact previously cited has resulted in many thousands of lost jobs in the pre-existing economy. Some public works and infrastructure has been built on the reservations, but would account for a few percent of the hundreds of millions that the casinos have accrued.

A handful of people in New Mexico has become very, very wealthy because of the gambling. The gambling "industry" has reaped millions from the New Mexico casinos. One example, Raymond Gallegos, a close friend of Weldell Chino’s, is reported to have made $30 million in the last couple of years from leasing slot machines to at least two casinos. While most patrons of the Mescalero Apache Casino consistently lost money at the slots, President and Mrs. Chino reportedly won hundreds of thousands of dollars playing the slots. They must be very lucky people.

The cost of expanded gambling in New Mexico, both in terms of economic loss and social devastation, has been significant, but not generally disastrous because of a national nine to ten year period of prosperity. The national and state economy is almost certain to cool down over the next year or two. When it does, the parasitic influence of expanded gambling will become much more apparent and destructive. Many people will understand that gambling is not harmless "entertainment," but a huge threat to our economic well being, and a destroyer of families and businesses. Unless our political leaders defend the gambling "industry" at any cost, a political backlash at that time among out citizens will probably generate legislation that will greatly restrict or plainly outlaw gambling in the future.

Dr. Guy C. Clark, executive director

New Mexico Coalition Against Gambling