Gambling Industry Wins Big

By Price, Joyce Howard | Insight on the News, March 15, 1999 | Go to article overview

Gambling Industry Wins Big


Price, Joyce Howard, Insight on the News


The nation's booming gambling industry has emerged as an influential and divisive force in American politics, even as the debate sharpens about how legalized gambling affects culture and society.

Just a decade ago, only two states allowed some form of legalized gambling. Today, only three states prohibit it. Two GOP governors -- David Beasley in South Carolina and Fob James Jr. in Alabama -- lost their jobs last November in part because of their perceived opposition to lotteries and other forms of wagering.

Whether gambling is a legitimate business that should be encouraged, or an insidious cancer that must be controlled, is a question that has provoked internal splits among Republicans and Democrats. Americans wager more than $600 billion annually in legal gambling operations -- at least $100 billion more than they spend for food, according to industry figures and data from the Department of Commerce. In 1997, the gambling industry's gross revenues totaled nearly $51 billion, up from $10.4 billion only 15 years before. The Council on Compulsive Gambling of New Jersey estimates the betting on Super Bowl XXXIII last month may have reached $4 billion, not counting side bets and office pools.

"The epidemic that is sweeping the nation reflects the enormous power and influence that is held by the gambling kingpins" argues social conservative James Dobson, head of Colorado Springs-based Focus on the Family ministry. "Because of their unlimited financial resources ... they can influence elections dramatically and entice political leaders to do their bidding."

Dobson, who has called the gambling lobby "the most powerful force in government today," sits on the National Gambling Impact Study Commission, the panel appointed by President Clinton and GOP congressional leaders to investigate the impact of legalized gambling on the economy, on families and on compulsive gamblers. Created in 1996 to investigate everything from casino video poker to Internet gambling, the commission is scheduled to release its findings June 18.

The impending release date has intensified the political jockeying about gambling's impact. Frank J. Fahrenkopf Jr., the former Republican Party chairman who now is president and chief executive officer of the American Gaming Association, figures to be at the center of the debate. Gambling is not a partisan issue, says Fahrenkopf. "It's not Republican or Democrat, not even liberal or conservative" -- and certainly not immoral. "I'm a Knight of Malta in the Catholic Church, and I don't need Jim Dobson to tell me what's moral," says Fahrenkopf, decked out in his trademark red tie and red suspenders. "And we're not going to apologize for trying to influence political elections."

The industry's pitch: Legalized gambling today is a clean, closely regulated industry that has created more than 1 million jobs, bringing new vitality to rundown rural areas, Indian reservations and depressed Midwestern towns. And the nearly $3 billion the industry pays each year in federal, state and local taxes translates directly into better social services and better schools across the country.

Steve Heneghan, spokesman for the New Jersey Casino Control Commission, cites Atlantic City as an example. "The casinos now employ just under 50,000 people, and there aren't 50,000 residents in Atlantic City," says Heneghan. "Casinos make up 80 percent of Atlantic City's tax base." When casino gambling was introduced in New Jersey in 1976, the assessable value of all the land in Atlantic City was $320 million; today, says Heneghan, it is more than $6 billion.

But critics hope the commission report will spur Congress to impose new curbs on gambling, such as legislation that would end a federal policy that lets gamblers offset any winnings with losses for tax purposes. And opponents already are warning they intend to make gambling a key issue in the 2000 elections.The stakes are high, given the huge contributions that members of both parties -- including those in leadership posts -- receive from gambling-industry leaders and political-action committees, or PACs. …

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