| Scripps-Howard News Service August 21, 1997
WASHINGTON - Gambling could be the fastest-growing cause of the
record rates of bankruptcy in America this year, a consulting group says. The finding
comes as a new federal commission began hearings yesterday on the gambling industry.
SMR Research Corp. of Hackettstown, N.J., finds a clear connection
between the spread of legalized gambling in 298 counties across the United States, and the
rise of bankruptcy filings in those areas. ``It now appears that gambling may be the
single fastest-growing driver of bankruptcy,'' said George Yacik, the SMR researcher who
wrote the gambling portion of the report for the credit card industry. The study found
rates are 18 percent higher in counties with one gambling facility, and 23 percent higher
in counties with five or more gambling facilities.
The Administrative Office of the U.S. Courts reported this view that
consumer bankruptcies are at record levels this year, in spite of a booming economy.
Between April and June, for example, bankruptcy filings hit a record 367,000, up 24
percent from 297,000 in the same period of 1996. Some 1.3 million bankruptcy cases were
filed in the last year, also a record level.
James Patrick Shea, a Las Vegas bankruptcy attorney who serves the
gaming sub- committee of the American Bankruptcy Institute, said he would be cautious
drawing conclusions from the SMR study, saying other causes - including an influx of new
employees to the regions where new gambling enterprises have started - could also be a
factor. ``You can't discount any studies, but the data are easy to manipulate,'' Shea
said. He people filing for bankruptcy don't have to disclose how they got into debt, and
so there's no scientific way of connecting bankruptcy and gambling.
But witnesses urged the National Gambling Impact Commission
yesterday to examine bankruptcies and other social effects of gambling when the
nine-member commission conducts field hearings this fall. Commission Chairwoman Kay James,
said the panel plans to study
all of the areas of the United States where casinos and other
gambling halls have opened in recent years. She said the commission hopes to complete a
comprehensive examination of both the social and economic impacts of gambling across the