Friday, Feb. 14, 2003 | 10:53 a.m.
Results of a new survey on Las Vegas-area gambling addicts revealed Thursday could be used to develop treatment programs and policies to address the social costs of gambling, authors say.
The study may also have political implications for the casino industry, which is preparing to endorse a tax hike of a quarter percentage point on gambling winnings and is fending off criticism that it should pay more to help plug the state's growing budget deficit. The industry also will face another battle with fiscal conservatives this year as it promotes an initiative to set up government funding for problem gambling treatment.
The study was co-authored outside the confines of academic or industry sponsorship by two University of Nevada, Las Vegas professors -- public administration professor Bill Thompson and Keith Schwer, the director of the university's Center for Business and Economic Research. It claims to be the first of its kind to quantify the social costs of gambling.
The study estimated the social costs per gambler at about $19,000 and the annual social cost in Southern Nevada of problem gamblers at $300 million to $470 million.
Social costs include bankruptcies, thefts, lost productivity at work, unemployment benefits and welfare support that occur as a result of gambling addictions.
Researchers cut their initial high estimate of around $900 million to a range of $300 million to $470 million because other studies have found that per-person social costs of problem gambling among people who aren't in treatment programs are only about 43 percent as high as the cost from people receiving treatment, Thompson said.
The findings are based on surveys filled out last year by about 100 participants in Gamblers Anonymous treatment programs. Those results were extrapolated to the broader population of Southern Nevada by using the results of state-funded research last year that revealed the percentage of problem and pathological gamblers in Nevada.
The March study, which marked the first widespread research identifying addicted gamblers in Nevada, found that 2.7 percent to 4.3 percent of the state's population were pathological gamblers. Another 2.2 percent to 3.6 percent were identified as problem gamblers, a less severe form of gambling addiction. The median estimate for both problem and pathological gamblers was 6.4 percent -- a figure that has been criticized as too high by casino interests as well as some researchers and a member of the Nevada Gaming Control Board.
Critics of the new survey said it will do little to aid the problem gamblers it is intended to help and could instead become a political football.
MGM MIRAGE spokesman Alan Feldman, who has criticized Thompson in the past for some of his positions against the casino industry, called the study a "superficial" analysis that isn't worthy of academic peer review.
"How much it is costing is a far more abstract and in some respects meaningless discussion" compared to research on "what problem gambling is all about and how to properly treat it," Feldman said.
"The industry has funded a lot of serious, probing scientific research. He doesn't have access to any of that money because we have serious standards. He couldn't possibly meet those standards."
Christine Reilly, executive director of the Institute for Research on Pathological Gambling and Related Disorders at Harvard Medical School, said the study is fraught with metholodogical problems.
It culls data from a relatively small sample and extrapolates that to the general population by using earlier research on problem gamblers that is already subject to debate, she said. Nevada's state-funded study on problem gambling last year used a survey screen that is considered out of date, she said.
When the same state survey was conducted using the newer screen, the extent of problem and pathological gambling in Nevada was 2.1 percent and not 6.4 percent -- a rate that is still higher than the national average of around 1 percent of pathological gamblers widely quoted by the casino industry.
Thompson's research also doesn't present a balanced approach for public policy makers by presenting both the benefits and costs of gambling, she said.
Little research has been done on the social costs of gambling because the disorder itself still isn't well understood, she said.
"It's more important to figure out how this disorder works. We still haven't figured out a standard treatment for this."
Problem gambling is tricky to define because it often involves people who have other addictions such as alcohol or tobacco, she said.
Reilly said she also questions why the study was released to the press before being subjected to a peer review -- a months'-long process that can be slow yet ensures usable results.
Grants from casino companies in 2000 created the Institute for Research on Pathological Gambling and Related Disorders, an arm of Harvard Medical School's Division on Addictions. The institute is responsible for dispersing grants to a variety of academic institutions and other research organizations. The resulting problem gambling research is subject to an academic peer review process that was modeled after established programs in the field of medicine.
The cost figures vary widely from the results of the National Gambling Impact Study Commission, a nine-member panel commissioned by Congress to explore the social and economic effects of gambling on communities nationwide.
The results of that commission's work have also been subject to heated debate because of the recognition that gambling problems may be the result of many factors that are difficult to single out, said Bill Bible, president of the Nevada Resort Association.
The panel found that gambling's social costs amounted to about $5 to $6 billion per year but only accounted for about $1,200 per pathological gambler per year and about $715 per problem gambler per year.
"The commission came to the conclusion that it was extraordinarily difficult to measure the costs to society," Bible said. "This study is an example of that difficulty."
Thompson defended the study, saying that it is based on methods used in other studies that states and the federal government have used.
Thompson said he aims to subject the study to a review of other academic researchers, which would pave the way for the study to be released in academic journals. Still, the results are primarily intended for public consumption rather than for an academic readership, he said.
Neither he nor Schwer based the study on a political agenda, he added.
"This is not an excuse for taxing gaming more. The tax debate was totally out of our minds when we did this study."
Thompson said he and Schwer support the casino industry's position that government should help fund problem gambling treatment. But the more important issue is that enough money will be available, not where the funding originates.
"The programs are necessary. But we're not addressing who should pay for the programs," he said.
State Sen. Joe Neal, who for years has advocated that casinos pay higher taxes on revenue closer to rates in other states, has estimated that casinos create a social cost of about $700 million to $800 million per year for the state.
The study proves that casinos should pay more than the governor's proposed casino revenue tax hike to 6.5 percent, he said.
"There is a social cost to the public, to the state," Neal said. "That position has been soundly ferreted out with this study."
"It is a political issue but it is also a factual issue. That means the Legislature will have to deal with it."
Problem gambling advocates said they still fear that the study will be used to point blame rather than help addicts.
"The danger is that if we allow this to become fuel for political debate, in the long run we do more damage to problem gamblers than they can do to themselves," said Carol O'Hare, executive director of the Nevada Council on Problem Gambling.
"There's got to be some rational discussion of the issue that focuses on the people in question."
Beyond the controversial dollar figures presented, the study points to various areas where problem gambling information is needed, such as in the judicial system, at medical providers and in financial institutions, she said.
"These are the speedbumps in the road and are opportunities for education -- they're opportunities to get information out that can help people make a difficult decision."
Dr. Robert Hunter, executive director of the Problem Gambling Center treatment program in Las Vegas, said the study will likely create controversy and become fodder for various political agendas.
"Our primary concern is meeting the needs of people who are suffering. While the debate does on and on, we're running a nonprofit charity program that offers treatment free of charge."
Both the Nevada Council on Problem Gambling and the Problem Gambling Center are funded by donations from casino companies.