Study Debunks Legalized Gambling `Black Hole of Economics,' U. of I. Business Professor Concludes

By Terri Likens Of The | St Louis Post-Dispatch (MO), November 21, 1994 | Go to article overview

Study Debunks Legalized Gambling `Black Hole of Economics,' U. of I. Business Professor Concludes


Terri Likens Of The, St Louis Post-Dispatch (MO)


After three years of study, University of Illinois business professor John Kindt has one thing to say to communities considering legalized gambling: Don't.

Kindt's conclusions, published in the latest edition of the Drake Law Review, are based on a three-year examination of legalized gambling in several states, including Illinois.

While Kindt agrees with advocates that legalized gambling creates a surge in jobs and tax revenues in a community early on, he said problems soon develop that outweigh the benefits. The report describes legalized gambling as a losing proposition that can cost taxpayers $3 to $6 for every dollar in tax revenue it brings in.

"The costs are so overwhelming, it's not even a close call," he said.

Kindt focused heavily on South Dakota, where gambling was legalized in 1987.

"Illinois is a little tougher to study because we have a much larger economy and these things don't show up as quickly," he said.

Gambling costs taxpayers in three ways, he said: Tax dollars for infrastructure such as road improvements, law enforcement costs and social costs.

Kindt said in communities where gambling is legalized and becomes socially acceptable, the number of compulsive gamblers more than doubles. Those people are likely to fall into financial trouble, get behind on their bills and even declare bankruptcy. The people they owe lose directly and taxpayers also bear bankruptcy court costs.

Kindt said compulsive gamblers cost society between $13,000 and $52,000 each in lost work time and through the commission of crimes such as check forgery, embezzlement, tax evasion and insurance fraud.

Their families suffer when money for housing, food and clothes is lost. Often, the public pays through social programs that bail them out.

Kindt said government officials and communities have had to make decisions on legalizing gambling based on incomplete information.

Kindt, who has taught at the University of Illinois since 1978, calls gambling "the black hole of economics."

"I tend to agree with what they say but their formulas need to be refined," said William Thompson, a professor of public administration at the University of Nevada at Las Vegas and the author of four books on the gambling industry. …

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