The National Gambling Impact Study Commission met from June 1997 through June 1999. It produced a report recommending seventy-six changes in public policy toward gambling activity. The commission was the creation of a new set of political forces in U.S. politics.
As casino-style gambling rapidly spread across the United States in the early 1990s, forces in the debate on gambling turned their attention to the national policymaking arena. Under the leadership of Tom Grey, a United Methodist minister and Vietnam War veteran from Galena, Illinois, the National Coalition against Legalized Gambling emerged to fight gambling wherever the issue arose as an issue of public policy. The coalition also urged politicians in Washington, D.C., to examine gambling and to consider regulation and taxation of gambling activity. In 1994, President Clinton sought to increase the federal budget by $1 billion dollars after Congress had established spending caps for the year. To do this, he would have had to either reduce other spending by a billion dollars or find a new source for the money. He suggested a new source: a 4 percent tax on all gambling profits in the United States. As his real target was the commercial casino industry, casinos reacted. Major Las Vegas and Atlantic City properties quickly came together and formed the American Gaming Association (AGA). The association selected Frank Fahrenkopf, formerly the chairman of the Republican National Committee, to be its spokesman and executive director. The tax measure was silently killed, but national politics were changed forever, as the gaming industry moved onto the stage as a major political campaign contributor for both parties.
The forces were joined in battle in 1995 when Congressman Frank Wolf (R-Virginia) introduced H.R. 497, a bipartisan bill to create a national study commission to examine gambling in the United States. Senators Paul Simon (D-Illinois) and Richard Lugar (R-Indiana) cosponsored companion legislation in the Senate. The AGA immediately feared that Grey and Wolf had their sights set on destroying big casino gaming with a “witch hunt” that would lead to recommendations for national taxation and regulation of gambling, as well as restrictions on the spread of legalized gambling. The AGA was outmaneuvered in committee hearings on the bill, as Grey and others emphasized the many negative consequences of gambling and the fact that political leaders did not have a full knowledge of the impacts of gambling. The AGA had to back off of its effort to simply kill the bill. Instead it used its power base – its campaign funding potential as well as congressional voices from gaming states – to make the bill less offensive to its interests. The bill to create the commission was substantially changed from the bill Wolf wanted. The commission was charged with investigating impacts of all gaming, whereas Wolf had wished to target casino gaming only. The AGA knew it could deflect much of the criticism of casino gaming by having investigators look at lotteries, charities, and Indian gaming. The commission was denied wide-ranging subpoena powers, whereas Wolf had desired that the commission be able to subpoena casino files and data on players.
The casino interests also negotiated a selection process that allowed them to have a strong voice on the panel. It appeared that Congress wished to satisfy conservatives by establishing the commission, but members of Congress were also quite aware that casinos were a major source of campaign funds. Unfortunately for the state lotteries, they were not able to make campaign contributions. They were not given an “inside voice” in the membership on the commission. The amended bill was quickly passed by each house, and on 3 August 1996 it became Public Law 104–169 as it was signed by President Clinton.
Three of the nine members of the National Gambling Impact Study Commission were appointed by the president, three by the Speaker of the House, and three by the majority leader of the Senate. The two congressional leaders each allowed minority party leaders in their chambers to select one of the three respective appointments. The commission ended up as a bipartisan group with both vocal antigambling advocates and commissioners who were close to the casino industry.
Two strong voices against gambling won appointment. James Dobson serves as the president of a religious-right organization, and Kay James has been a dean at religious-based Regent University in Virginia. On the other side, one major casino executive – Terrence Lanni of the MGM Grand – was selected, as was the head of the largest labor union in Nevada’s casino industry, John Wilhelm, and the head of the Nevada Gaming Control Board, Bill Bible. A Native American from a nongaming Alaska tribe was selected – Robert Loescher. He turned out to be very much an advocate not only for Native American gaming but also for the industry as a whole.
Three “neutrals” seemed to hold the balance of power. One was radiologist Paul Moore, a close friend of Senate majority leader Trent Lott. (Lott became the target of a public interest group as it was revealed in the commission’s last days that he had received an exorbitant amount of campaign funding through the casino interests.) Also considered in the center were Leo McCarthy, former lieutenant governor of California, and Richard Leone, a former New Jersey state official.
The commission selected Kay James to be its chair. She set an antigambling tone to the proceedings from the very start, and it appeared that it would be very difficult for the commission ever to come together for a final report. Nonetheless, many hearings were held across the country, and although there was much verbal acrimony, the commission did unite to make a final report. The commission operated on a budget of $5 million. It engaged in a wide variety of activities. Public hearings were held in Washington, D.C.; Atlantic City; Boston; Chicago; San Diego; Tempe, Arizona; Biloxi, Mississippi; New Orleans; and Las Vegas. Several hundred citizens, public officials, industry officials, and academic experts offered testimony. Information was also gathered from over a thousand documents examined by the commission staff. The National Opinion Research Center of the University of Chicago was contracted to conduct a survey of compulsive gambling. It surveyed 2,417 adults and 534 adolescents by telephone and 530 other adults in gambling facilities. The center’s study also involved making case studies of 100 communities that were located near gambling facilities. As a result of the work, the center concluded that approximately 1.8 million adults were currently “pathological gamblers” and another 4 million were currently “problem gamblers”. Thirteen percent of patrons at the gambling facilities indicated attributes of either pathological or problem gambling at some time in their lives. All the information resources were utilized in making recommendations, which appeared in the final report.
The report had many antigambling messages in it, but on most substantive matters, the casino industry of Nevada came out on the winning side. The gaming industry was bothered by an initial recommendation that states and tribal governments accept a moratorium on new legalizations of gambling activities. That recommendation was passed over in the final report that was issued on 18 June 1999. Instead, the commission urged that the jurisdictions make comprehensive socioeconomic impact statements before they endorsed new legalizations. Other recommendations gave great comfort to the casino industry. Their fears were completely defused with the initial recommendation of the panel. The initial findings of the National Gambling Impact Study Commission included a definitive statement that gambling policy should remain a matter for state governments to control. With two exceptions – Native American gaming and Internet gaming – the commission felt that the federal government should stay out of gaming. There should be no special federal taxes on gaming, and there should be no direct regulation of the gaming industry by the federal government. The policy arena for making laws and rules about the casinos and the other gaming venues of Nevada should be in the hands of state leaders and in the counties and cities of the states.
The commission followed its first recommendation with a full set of suggestions for changes to be made at state and local levels. Many of these were quite critical of current gaming operations around the country. Nevada casino operators had been criticized before – this was not new. But the criticisms were much easier to take from sources that recognized that they should have no power over the choices that the state makes regarding gaming.
The commission recommended that the minimum age for gambling be twenty-one in all jurisdictions. They also recommended that children not be permitted to linger or loiter in gambling facilities. Gambling “cruises to nowhere” – that is, ships that dock in a nongaming state then go beyond the international waters boundary, allow gambling, and then return to docks – should not be allowed unless the nongaming state specifically approved of their activity. The commission also suggested that gaming interests not be allowed to make campaign contributions. Convenience gambling, such as slot machines or other gaming machines in grocery stores, was condemned.
The national commission opposed money machines in gaming areas. They claimed that “the easy availability of ATMs and credit machines encourages some gamblers to wager more than they intended”. Therefore, they recommend that “states, Tribal governments, and pari-mutuel facilities ban credit card cash advance machines and other devices activated by debit or credit cards from the immediate area where gambling takes place”.
The commission took a slap at sports betting by recommending that no betting be allowed on college or amateur contests. There was also a recommendation against the sale of instant tickets by lotteries and the use of machine gaming by lotteries. Lotteries were also chastised for excessive and false advertising. Pari-mutuel racing facilities were urged not to have slot machine–type gambling.
All gambling arenas were requested to have warning signs telling players about the dangers of compulsive gambling. States were encouraged to devote funds from gaming taxes to programs for research, prevention, education, and treatment programs for problem gamblers.
The commission urged that Congress pass legislation making all Internet gambling illegal. Moreover, it indicated a desire for legislation to make credit card debts incurred for Internet gambling unrecoverable in courts. The commission also recommended that Indian gaming be subjected to more stringent reporting requirements and that the federal government fully enforce the provisions of the Indian Gaming Regulatory Act.
The commission lamented that even with its extensive study, too many gaps remained in our knowledge of gambling. They recommended an extensive program of continued research.
Generally, the gambling industry was happy with the Final Report. It had feared a more severe condemnation of casino gambling. Nonetheless the opponents of gambling received encouragement from the Final Report as well. They used the study effectively in a campaign in the fall of 1999 to defeat a proposed lottery in Alabama and to win a court decision ending machine gambling in South Carolina.
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