PARASITE INVADES NEW MEXICO
OP ED PIECE
BY DR. GUY C. CLARK IN JUNE, 1999 ALBUQUERQUE TRIBUNE
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.
Gamblingís 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 nationís
economy, but rather drained vitality from it.
I was attracted by Professor Samuelsonís "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
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 Mexicoís
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 didnít 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 Mexicoís
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. Itís 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 Chinoís, 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