Casinos: an unethical, but just way of benefiting the society

Gambling has become a hot topic in the United States as government intervention has led to the expulsion of online gambling websites over the use of illegal transactions. Casino gambling first appeared on Native American territories in 1988 when the Indian Gaming Regulatory Act was passed as a means of providing economic benefits for the governing tribes (Native American Gaming, 1999). Lately states have taken it upon themselves to implement commercial casinos that would generate taxes and provide monetary relief for state governments who are faced with budget deficits. As the gaming industry is beginning to sweep across the nation, a flood of ethical issues has followed suit. Gambling addictions have been linked on the severity level to those of the tobacco and alcohol industry, leading many individuals to sacrifice their jobs and homes over the need to pay off their gambling debts. Gambling addiction is only one of the few ethical issues that plagues this industry as the growth of casinos in the area tends to increase crime. These negative consequences are the byproduct of people’s desire to gamble with the consequences directly correlated with losing, but from an economic standpoint gambling facilities help generate taxes for state governments, provide jobs, and much more. While casinos present some ethical issues, the justified economic benefits generated by gambling outweigh the responsibility placed on casinos to act as ethical agents in the country.

BACKGROUND

Casinos began to emerge in 1988 with the passing of Indian Gaming Regulatory Act in 1988. Since many of the Indian territories were not financial well off, the money generated from these gambling facilities were distributed back to the local tribes. Casinos were classified as a Class III type of gambling by the National Gaming Commission which enabled state governments to have a say in the operations and the implementation of casinos on Indian preservations. Originally state governments had little input over the proceedings that occurred in these territories, but in fear of losing control over the rise of gambling facilities within their state jurisdictions “tribes wishing to conduct Class III gaming had to sign a “compact” with the respective state which includes measures for state regulation and for sharing of revenue”( Native American Gaming, 1999). This made it difficult for Native Americans to go forth with building casinos in their given areas. As of lately there has been an emergence of commercial casinos throughout the United States which are built on non-Indian reservations. According to Steve Cadue, a Kickapoo Tribal Chairman, “we are now faced with stiff competition from the state-owned casinos. We are located in a rural location far from large population centers and will see a revenue decline in our casinos” (CADUE, p.1, 2012). Currently there are 22 states that contain 566 commercial casinos that rival the Indian regulated casinos (American Gaming Association). This industry has seen a lot of growth over the years, and with the push from Governor Cuomo, New York will soon be added to the list of states that will offer commercial casinos (Robinson, 2012).

Gambling Addiction is like Crack

A gambling addiction is a very serious illness which has caused many individuals to lose their jobs, homes, and even loved ones over their inability to cope with this disease. According to the National Problem Gambling Awareness Week nearly 6 million adults (2% of the American population) and 500,000 teens meet the criteria for a gambling addiction (National Problem Gambling Awareness Week, 2012).  Even though gambling addictions have not received as much attention from the media as the tobacco and the alcohol industries, gambling addictions may instigate the abuse of these two substances.  It has been demonstrated that “children of problem gamblers have been shown to have higher levels of use for tobacco, alcohol, drug use, and overeating than do their classroom peer” (National Problem Gambling Awareness Week, 2012). There have been many instances where a child has been left behind in a vehicle unattended over the parents’ desire to gamble at the casino. This gambling epidemic further seems to be encouraged by the casinos themselves, as “a significant portion of gambling revenues – one-third to one-half – is derived from problem gamblers” (Denvir, 2012). This was the same scenario that Arelia Margarita Taveras found herself in.

In 2008, Taveras sued six of the New Jersey casinos for 20 million dollar racketeering charges (Msnbc.com, 2010). In a short span which resulted in sleep and food deprivation, she managed to lose nearly 1 million dollars of money that she did not have. Her gambling addiction forced her to dip into her personal business accounts which her illegal actions forced her to face jail time. She claimed “it’s like crack, only gambling is worse than crack because it’s mental. It creeps up on you, the impulse. It’s a sickness” (Msnbc.com, 2010). This type of behavior is found in many casinos across the nation leaving individuals scarred with insurmountable debts and leaving the casinos to cash in on public’s losses.

Gambling and Crime, a perfect duo

Even though there is no concrete evidence that pinpoints gambling as the predominant reason behind the increased crime rate in newly developed casino locations, many studies that have examined casino locations conclude that there is a direct correlation between these two types of behaviors. The reason why many people have a hard time associating gambling with an increase in crime is that there is lag period as to when this spike in crime tends to occur, allowing people to speculate that there must a be another factor causing this rise in crime. As seen in Exhibit 1, crime tends to decrease in number after a casino has been opened, but once several lag periods have followed, the crime rate skyrockets to numbers higher than pre-casino opening. Part of the reason why this lag exists is that once the casino has been opened “the fraction of adults who are poor, who are more likely to commit crime, declines by 14% and that employment increases significantly” (Grinols, 2005). Many casinos are constructed in cities with an already high poverty rate to begin with, and since the casinos can only employee a small amount of the population living in poverty the rest averts to crime like behavior to provide for one’s basic needs.  Of the top ten cities with the highest poverty rates, six of the cities have access to a nearby casino in the area (Exhibits 2 and 3). According to New York’s Governor Cuomo, who has worked earnestly for the implementation of gambling in the state, “casino will ultimately put thousands of New Yorkers to work, drive our economy, and help keep billions of dollars spent by New Yorkers on gaming here in the New York State” (Robinson, 2012). Casinos often times are viewed as a short term fix to the economic problems of a city by offering quick and direct benefits much like stated by governor Cuomo, while the disadvantages tend to present themselves later on. It’s these hidden disadvantages such as crime and the prosperity of the casinos at the expense of the gambler that harm the economy more than benefits it in the long run.

Capitalism at its best

Amid all the ethical dilemmas that haunt this industry casinos offer benefits that are very hard to resist, which range from increased employment opportunities to additional tax revenues for state use. Casinos present clear economic benefits, but the opposition is still fierce, arguing that the wrong people are reeling in the profits attained from the casinos. There is no doubt that casino management is highly overpaid as Steve Wynn, owner of Wynn Resorts, earned $8.39 million dollars in salary and other benefits (Finnegan, 2011). This issue boggles the minds of the general public, but in essence it is a byproduct of the capitalistic system that is in place in United States much like the destruction of local business by casinos. Big changes to the American business system would need to occur to help solve these two problems as it would fall on the shoulders of the federal government to establish new regulations. The gambling industry is simply one of the many on the long list of participants in this capitalistic approach. Even though many view casinos as destroying local businesses in a sense the casinos are destroying each other. Casinos face fierce competition amongst each other, as the construction of more state-owned casinos put a heavy financial dent on the Native American owned casinos. As the war to reel in gamblers continues on, the benefits remain clear as nearly one million people are directly and indirectly influenced by the gaming industry (Exhibit 4).

A steady wage with a shifty occupation

According to the American Gaming Association casino employees earned an hourly wage salary of $13.3 which was higher than some of the major industry employees such as: healthcare support occupations, building and grounds cleaning and maintenance occupations, farming, fishing, and forestry occupations (Exhibit 5 and Exhibit 6). Even though the hourly wage is still considered very small in comparison to the salaries earned by casino CEOs, the jobs offered in casinos require very little experience or skill thus offering such high salaries to untrained individuals provides opportunity for many non-college graudates. It is not the salary that has many current casino employees worried, but the fact that in the next four to six years they might have to reapply for their jobs all over again according to Revel Casino (Jacobs, 2012). This is intended to eliminate some of the current older personnel who are not capable of performing as some of their counterparts and to encourage casino employees to move up the ranks as management staff is exempt from this shifty strategy. This idea might sound radical, but a similar principle exists across all occupations, where one’s work performance is always being evaluated and if not meeting the standards, then that person faces the possibility of getting fired. There seems to be a simple solution, continue doing a good job and you are safe.

Every time you lose, everybody wins

The biggest appeal of casinos is the revenue attained by the local government in the form of taxes. “Nationwide, commercial casinos contributed $7.59 billion in direct gaming taxes during 2010, a 3.0 percent increase compared to 2009” (Hart). The tax revenue attained from these casinos helps to fund some of the local initiatives such as: community colleges, historic preservation, statewide education, the environment, infrastructure and many more (American Gaming Association). While certain schools are skeptical of ever receiving casino tax benefits in the long run, other schools view the funds received from casinos as their primarily lifeline.  A few schools in St. Louis might be forced to cut jobs or resort to other means of saving on money if this tax lifeline was ever cut off as casinos constantly try to reduce their tax charges (Piper, 2011). There is no doubt that many organizations benefit economically from the revenue allocated from taxing casinos, but an increase in casino taxes would help to highlight the importance of casinos to the American public from all their benefits to local communities.

Is their justice behind Gambling?

The ethical issues that have hindered the gambling industry propose the question if the world would be better off without it? When gambling is implemented in an areas, it increases the number of individuals who attend gambling anonymous clubs, which further supports that casinos help to create and further propagate gambling addictions. According to Rawls, “inequalities of wealth and authority are just only if they result in compensating benefits for everyone, and in particular for the least advantaged members of society” (Rawls, p.206). The least advantaged members of society constitute the population of individuals who live below the poverty line, and as mentioned earlier casinos are built in cities that use them to address their financial problems. If the losses that occur in casinos come at the expense of a few individuals, and the poor benefit by attaining jobs and financial relief then Rawls would not have a problem with the institution of gambling. Even the issue of increased crime in casinos areas can be viewed as a way of distributing money to the least advantaged members of the society.

Many opponents of gambling argue that it takes advantage of those individuals with a gambling problem, as a sizeable portion of revenue comes from the losses of the addicts. But what Robert Nozick would be interested is in how the casinos come about attaining their revenue and could their actions be viewed as justifiable? When people gamble, they understand that there is a risk associated with such actions, i.e. every hand in Texas Hold’em can be calculated to an exact percentage of your chances of winning the hand. Other games, such as craps or roulette, are considered purely gambling because the ability to calculate your odds are small, and the game is based on pure luck. Thus since there are no deceitful ways behind gambling, it can be argued that whenever the casino wins it can be regarded as a just act due to the principle of justice in acquisition. Where Nozick might get upset is “if past injustices have shaped present holdings in various ways” (Nozick, p.205, 1974). Nozick would deem it upon the casino to verify that the money being gambled with was not stolen, cheated, etc.

Even though gambling is viewed as ethical wrong in many situations, the act of gambling is not regarded as unjust. Individuals who gamble are well aware that the odds are against them, and that maybe, just maybe lady luck will smile upon them. As long as financial benefits are being reeled in the form of taxes and jobs, and the money distribution is going from those who can afford to gamble to those in need of this aid let the American population gamble.

 

 

 

Work Cited

“Addicted Gambler Files $20 Million Casino Suit.” Msnbc.com. Msnbc, 3 Oct. 2010. Web. 15 Apr. 2012. <http://www.msnbc.msn.com/id/23538746/ns/us_news-crime_and_courts/t/addicted-gambler-files-million-casino-suit/#.T4I0XrJQBPk&gt;.

CADUE, STEVE. “Letter: State Casinos Hurt Tribal Interests.” CJOnline.com. The Topeka-Capital Journal, 19 Jan. 2012. Web. 16 Apr. 2012. <http://cjonline.com/opinion/2012-01-19/letter-state-casinos-hurt-tribal-interests&gt;.

Denvir, Daniel. “Casino Capitalism: As Gambling Spreads, Metaphor Becomes Reality.” U.S. Economy. Salon, 9 Mar. 2012. Web. 16 Apr. 2012. <http://www.salon.com/2012/03/09/casino_capitalism_as_gambling_spreads_metaphor_becomes_reality/&gt;.

“The Economic Impact of the Commercial Casino Industry.” Americangamingassociation.org. American Gaming Association. Web. 16 Apr. 2012. <http://www.americangaming.org/industry-resources/beyond-the-casino-floor/the-economic-impact-of-the-commercial-casino-industry&gt;.

Finnegan, Amanda. “Steve Wynn Gets Annual Salary Boost of $1 million.” LasVegasSun.com. Las Vegas Sun, 28 Feb. 2011. Web. 16 Apr. 2012. <http://www.lasvegassun.com/news/2011/feb/28/steve-wynn-gets-annual-salary-boost-1-million/&gt;.

Grinols, Earl L., and David B. Mustard. CASINOS, CRIME, AND COMMUNITY COSTS. Tech. 1st ed. Vol. 1. 2005. Print.

Hart, Peter D. “State of the States: AGA Survey of the Casino Entertainment.” American Gaming Association. American Gaming Association, 2011. Web. 14 Apr. 2012. <http://www.americangaming.org/files/aga/uploads/docs/sos/aga-sos-2011.pdf&gt;.

Jacobs, Emma. “Revel Casino in A.C. Says New Hires Shouldn’t Get Too Comfortable.” NewsWorks.org. 30 Jan. 2012. Web. 16 Apr. 2012. <http://www.newsworks.org/index.php/nwtonight/item/33295-revel-casino-in-ac-says-new-hires-shouldnt-get-too-comfortable&gt;.

“May 2011 National Occupational Employment and Wage Estimates.” Bureau of Labor Statistics. United States Department of Labor, 29 Mar. 2012. Web. 15 Apr. 2012. <http://www.bls.gov/oes/current/oes_nat.htm#00-0000&gt;.

“National Problem Gambling Awareness Week – Problem Gambling Information – Facts and Figures.” National Problem Gambling Awareness Week. Ational Problem Gambling Awareness Week, 2012. Web. 16 Apr. 2012. <http://www.npgaw.org/problemgamblinginformation/factsfigures.asp&gt;.

“Native American Gaming.” National Gambling Impact Study Commission. National Gambling Impact Study Commission, 3 Aug. 1999. Web. 16 Apr. 2012. <http://govinfo.library.unt.edu/ngisc/research/nagaming.html&gt;.

Nozick, Robert. The Entitlement Thoery. Anarchy, State and Utopia. Basic, 1974. 203-09. Print.

Piper, Brandie. “Casino Tax Breaks Could Hurt St. Louis County Schools.” Ksdk.com. Ksdk.com, 21 Sept. 2011. Web. 16 Apr. 2012. <http://www.ksdk.com/news/article/277547/3/St-Louis-County-casinos-assessed-values-cut&gt;.

Rawls, John. “Rawls: Justice as Fairness.” Justice a Reader. 1st ed. Oxford UP, 2007. 203-22. Print.

Robinson, Michael. “New York to Legalise Commercial Casinos in 2013.” Innovategaming.com. Innovategaming, 15 Mar. 2012. Web. 16 Apr. 2012. <http://www.innovategaming.com/ny-to-legalise-commercial-casinos-2013&gt;.

Roy, Seth. “Schools Stand to Receive Some Casino Taxes.” The Newark Advocate. 12 Apr. 2012. Web. 16 Apr. 2012. <http://www.newarkadvocate.com/article/20120411/COMMUNITIES02/204120314/Schools-stand-receive-some-casino-taxes&gt;.

Weintraub, Jason. “Top 10 Poorest Cities In The USA (Is Your City On The List?).” Hiphopwired.com. Hip-Hop Wired, 5 Oct. 2010. Web. 16 Apr. 2012. <http://hiphopwired.com/2010/10/05/top-10-poorest-cities-in-the-usa-30097/2/&gt;.