Neighborhood gambling targeted by fed panel

John Wilen

Wednesday, Nov. 11, 1998 | 11:39 a.m.

The National Gambling Impact Study Commission appears ready to blast neighborhood gambling in its report to Congress next summer.

Judging by the comments of commissioners from a wide variety of political leanings, the commission's report will be harshly critical of the practice of placing gaming machines in convenience and grocery stores.

In a rare moment of agreement, two commissioners from opposite sides of the debate over legalized gambling agreed during a Tuesday commission hearing that gaming machines located in neighborhoods have few of the positive economic effects associated with resort casinos.

"The economic impact of destination resorts ... is considerably more positive than the other end of the spectrum," neighborhood-based gaming machines, said Commissioner John Wilhelm, international president of the Culinary Union, an ardent supporter of legalized gambling.

"I have drawn the conclusion ... that there are some forms of gambling that appear to be more dangerous than others," said Commissioner James Dobson, a conservative radio broadcaster and frequent critic of legalized gambling.

Neighborhood gambling will likely be at the top of the commission's list of undesirable types of gambling, Dobson said.

During its hearings Tuesday, the Commission heard testimony from Las Vegas Mayor Jan Jones, a frequent critic of neighborhood gambling; Dr. Frank Quinn, a South Carolina researcher studying the effects of video poker; Sean Higgins, president of the Nevada Retail Gaming Association, a trade association representing slot route operator; and Richard Wilson, a self-proclaimed compulsive gambler from Las Vegas.

While three of the four -- Jones, Quinn and Wilson -- were predictably critical of neighborhood gambling, even Higgins was unwilling to argue that neighborhood gambling should be allowed outside of Nevada.

"I don't pretend to know whether it is the right form of gaming for other states," said Higgins.

Though Higgins testified neighborhood gambling has had "no negative social impact on Las Vegas," he also told commissioners his testimony applied only to Nevada, not to other jurisdictions that may have or be considering legalized neighborhood gambling.

Both Quinn and Wilson testified the easy access to gambling provided by convenience stores throughout Nevada and South Carolina has increased the incidence of problem gambling, while having little positive economic impact on surrounding areas.

Wilson, who moved here from Missouri 18 years ago, said easy access to gambling made him a compulsive gambler.

"Availability ... is what made me cross over the line," Wilson said. "A pack of cigarettes back in Missouri never cost me $300 to $400."

Quinn said that of 500 South Carolinian video poker players he has interviewed, 20 percent exhibit some characteristics of problem gambling. Other than bingo, Video poker is the only form of legal gambling in South Carolina. But while state law allows only five gaming machines per establishment, and does not allow alcohol to be served in gambling establishments, those laws are routinely ignored, said Quinn.

In his survey, 46 percent of players said they were induced to play longer and more often by alcohol, and 61.9 percent said they played primarily because machines were located close to their homes.

As a result, South Carolina's four-year-old legalized gambling industry is spawning an alarming level of compulsive gambling, said Quinn.

"What we have is a situation that's out of control," said Quinn.

Jones agreed convenience is perhaps the most important factor in turning neighborhood gamblers into compulsive gamblers.

"People need to buy food and gasoline," said Jones. "Problem gambling may be enhanced if a community offers gaming in those environments."

Jones emphasized she is not against regulated casino gambling, and said it's too late for Nevada to go back on its long-established practice of allowing gaming machines in convenience and grocery stores.

"We are what we are," said Jones. "Convenience gaming has been a function of Nevada life for the last 40 years."

But neighborhood gambling -- what Jones terms convenience gambling -- should not be allowed in new jurisdictions because it has no positive economic impact, she said.

"It generates revenues that would otherwise go to goods and services," said Jones.

Higgins defended neighborhood gambling in Nevada, pointing to the state's strong regulatory regime and to recently-enacted policies and regulations requiring neighborhood gambling establishments to post instructions on seeking help for problem gambling.

"While locals casinos, due to their proximity to residential areas, may make it more convenient to gamble, in my opinion, their presence does not increase the compulsive urges of a pathological gambler," said Higgins.

Banning locals casinos and neighborhood gambling establishments will not solve the problem, Higgins said.

"Eliminating 'locals' casinos would not have a long-term effect on (a problem gambler's) behavior," said Higgins. "That individual will simply seek out other venues, such as 'destination' casinos, where they can satisfy their need to gamble. In my opinion, making someone drive an extra 10 to 15 minutes will not have a deterrent effect on their behavior."

Dobson wasn't buying Higgins' arguments.

"That may or may not be true," said Dobson. "But the larger question is how (compulsive gamblers) get that way."