Tuesday, December 13, 2022

A Profit Deal

Gambling is a "Profit Deal"
Nicholas Johnson
The Gazette, December 13, 2022, p. A6

Steve Martin plays the intellectually challenged character Navin Johnson in the 1979 movie, “The Jerk.” Navin’s lack of weight-guessing ability at the fair is losing money for the owner. Informed of this, Navin responds, “I get it, this is a profit deal!”

The same insight came to me 32 years earlier. Dad had been invited to teach a University of Southern California summer session. After exams, we travelled up California’s scenic Highway 1 to San Francisco. Dad wanted to visit the parents of one of his graduate students. They lived in what then seemed to me a huge, multi-storied house.

The owner, not wishing to include me in grown-ups’ talk, handed me a straw hat filled with slugs the size of five-cent nickels and showed me a staircase to the attic. That’s where I was to play with slot machines until called.

Since I was carrying a small spiral notepad and pencil, I saw this as an opportunity for research. I made a mark for each slug inserted in the machine and for each one it coughed up that clanked in the tray.

Always careful with my newspaper delivery money, that was the day I decided to opt for saving, rather than gambling. It’s not that I never go into casinos. I do. I once interviewed a fellow in Vegas who seemed to know the payout percentages of every slot machine in town. Casinos are a significant sub-set of America. I just don’t leave any money there.

Gambling has a long history among Homo Sapiens. The first “dice,” made of animals’ teeth, date from 3000 B.C. But they were primarily used for divining the future rather than betting on it. Venice had the first casino in 1638. And though church basement bingo has lost popularity, friends’ weekly poker games and other betting continues.

Today’s increases in problem gambling and addiction are consequences of its commercialization. Gambling’s become a super-profitable industry. From 2021 to 2022 global gambling went from $287 to $456 billion, with projections of $840 billion by 2026.

Meanwhile, risks of gambling addiction grew 30 percent from 2018 to 2021. Five percent of those from 11 to 17 are showing signs of problem gambling. Gambling addiction is increasingly recognized as a brain disease, like addictions to alcohol, nicotine or other drugs.

Addicts are money makers. Drug dealers give free first doses. Sports gambling gives free first bets. Gambling soon becomes for many like a pandemic with no vaccine – impacting others like the second-hand smoke from cigarettes.

The industry uses technology, marketing and advertising manipulation to spread its tentacles throughout our society and grow its customer base. [Photo credit: Nicholas Johnson. "[T]he last time I checked (so it may have changed), the Kinnick scoreboard was still running an advertisement for the Riverside gambling casino, and the casino still had a Kinnick skybox for its high rollers." "Does Herky Have a Gambling Problem?" FromDC2Iowa.blogspot.com, January 25, 2012, https://tinyurl.com/44fxhmvp. NOTE DATE.]

States like Iowa, once criminalizing gambling, now profit from lotteries and their take of casinos’ profits. Anyone with a smartphone is a potential customer for the gambling industry – from anywhere and at any time.

Want to know more? Take the advice of Woodward and Bernstein’s source, “Deep Throat”: “follow the money.” In the long game the house always wins. Commercialized gambling is, indeed, “A profit deal.”

Nicholas Johnson is waiting for sports next gambling-related scandal. Contact mailbox@nicholasjohnson.org

“The Jerk.”

“The Jerk,” 1979, https://www.imdb.com/title/tt0079367

Brain disease.

Ferris Jabr, “How the Brain Gets Addicted to Gambling; Addictive drugs and gambling rewire neural circuits in similar ways,” Scientific American, Nov. 1, 2013, https://www.scientificamerican.com/article/how-the-brain-gets-addicted-to-gambling/ (“In the 1980s, while updating the Diagnostic and Statistical Manual of Mental Disorders (DSM), the American Psychiatric Association (APA) officially classified pathological gambling as an impulse-control disorder …. In what has come to be regarded as a landmark decision, the association moved pathological gambling to the addictions chapter [May 2013]. The decision, which followed 15 years of deliberation, reflects a new understanding of the biology underlying addiction and has already changed the way psychiatrists help people who cannot stop gambling.”)

“Is Addiction Really a Disease?”, Indiana University Health, Nov. 14, 2022, https://iuhealth.org/thrive/is-addiction-really-a-disease

“Gambling Addiction and the Brain,” Brain Facts.org, Sept. 3, 2015, https://www.brainfacts.org/diseases-and-disorders/addiction/2015/gambling-addiction-and-the-brain

Gambling history.

“Gambling, Wikipedia, https://en.wikipedia.org/wiki/Gambling (“In Mesopotamia the earliest six-sided dice date to about 3000 BCE. However, they were based on astragali dating back thousands of years earlier. In China, gambling houses were widespread in the first millennium BCE, and betting on fighting animals was common. Lotto games and dominoes (precursors of Pai Gow) appeared in China as early as the 10th century.[7] Playing cards appeared in the 9th century CE in China. Records trace gambling in Japan back at least as far as the 14th century.[8] Poker, the most popular U.S. card game associated with gambling, derives from the Persian game As-Nas, dating back to the 17th century.[9] The first known casino, the Ridotto, started operating in 1638 in Venice, Italy.[10]” …”)

The Gambler’s Lament, Wikipedia.org, https://en.wikipedia.org/wiki/Gambler%27s_Lament (“The Gambler's lament” or "Gamester's lament") is one of the hymns of the Rigveda … in the late Tenth Book (RV 10.34), . . . the early Indian Iron Age.” “The poem consists of a monologue of a repentant gambler who laments the ruin brought on him because of addiction to dice.[4]”

Rigveda, Wikipedia.org/wiki/Rigveda, “The Rigveda is the oldest known Vedic Sanskrit text.[7] Its early layers are among the oldest extant texts in any Indo-European language.[8][note 2] . . . Philological and linguistic evidence indicates that the bulk of the Rigveda Samhita was composed in . . . the Indian subcontinent . . . between c. 1500 and 1000 BCE,[13][14][15] . . . c. 1900–1200 BCE has also been given.[16][17][note 1]”

Kathryn Selig Brown, “Life of the Buddha,” The Met, https://www.metmuseum.org/toah/hd/buda/hd_buda.htm (“ According to tradition, the historical Buddha lived from 563 to 483 B.C., although scholars postulate that he may have lived as much as a century later.”)

Sigālovāda Sutta, https://en.wikipedia.org/wiki/Sig%C4%81lov%C4%81da_Sutta (“Sigalovada Sutta is the 31st Sutta described in the Digha Nikaya ("Long Discourses of Buddha").[1]” “The Buddha first describes fourteen evil ways that should be avoided by a householder. The Buddha enumerates these evil ways to be avoided as: . . . the six ways of squandering wealth: 1. indulging in intoxicants 2. wandering the streets at inappropriate times 3. frequenting public spectacle 4. compulsive gambling 5. malevolent companionship 6. habitual idleness
Private gambling.

Hamil R. Harris, “Church Bingo's Number Is Up,” Washington Post, January 24, 2004, https://www.washingtonpost.com/archive/local/2004/01/24/church-bingos-number-is-up/70658937-d980-4b3d-9a74-22b6aa759607/

Gambling in Iowa.

“The State of Gambling in Iowa and How It Is Influencing the Economy,” The Daily Iowan, June 14, 2021, Dailyiowan.com/2021/06/14/the-state-of-gambling-in-iowa-and-how-it-is-influencing-the-economy/

“Gambling Legislation in Iowa,” The Daily Iowan, Aug. 28, 2020, https://dailyiowan.com/2020/08/28/gambling-legislation-in-iowa/ (“[Iowa] has a grand total of 19 different casinos, second only to Nevada in the number of casinos per capita.” “The most recent change . . . has been the arrival of sports betting [following the] May 2018 [decision] … by the US Supreme Court that all states who wanted to make the activity legal should be permitted.” “[It] is only legal to play [poker] for money within licensed casinos. This means that games played anywhere from bars to people’s homes which involve gambling could make the organisers liable to prosecution.”)

Todd Dorman, “Iowa’s gambling flood gates opened 50 years ago,” The Gazette, Sep. 24, 2021, https://www.thegazette.com/opinion/iowas-gambling-flood-gates-opened-50-years-ago/

Increase gambling addiction.

Stephen Marche, “America’s Gambling Addiction is Metastasizing,” The Atlantic, Nov. 26, 2021, https://www.theatlantic.com/ideas/archive/2021/11/world-our-casino/620791/ (“Gambling also leads, indirectly, to increases in violent crime, suicide, divorce, and bankruptcy.”)

Rob Davies, “Problem gamblers at 15 times higher risk of suicide, study finds,” The Guardian, March 12, 2019, https://www.theguardian.com/society/2019/mar/13/problem-gamblers-at-15-times-higher-risk-of-suicide-study-finds (“The study found that suicide rates increased 19-fold among men between the ages of 20 and 49 if they had a gambling problem and by 15 times among men and women of all ages.”)

Martha C. Shaw, et al., “The Effect of Pathological Gambling on Families, Marriages, and Children,” Research Gate, Sept. 2007, https://www.researchgate.net/publication/6171219_The_Effect_of_Pathological_Gambling_on_Families_Marriages_and_Children (“Pathological gambling (PG) is widely reported to have negative consequences on marriages, families, and children. Empirical evidence is only now accumulating but when put together with anecdotal information, the extent of these problems is clear. PG contributes to chaos and dysfunction within the family unit, disrupts marriages, leading to high rates of separation and divorce, and is associated with child abuse and neglect.”)

Chelsea Connor, “Do Casinos Increase Crime?” Story Maps, Dec. 13, 2020, https://storymaps.arcgis.com/stories/6ee1a03d004445ca97377b1f59e14554 (“Approximately one half of compulsive gamblers commit crime. Typically, their motivation is financial and non-violent to either collect more money to gamble or repay debts.” “[T]he Horseshow Casino in Baltimore … was constructed August 26, 2014. I will use crime data in 2014 showing pre-conditions and 5 years after construction, 2019, to show post conditions. … Total crime count for 2014 was 42,620. Total crime count for 2019 was 1,638,600.”)

“Problem gambling,” Wikipedia.org, https://en.wikipedia.org/wiki/Problem_gambling (“Impact (Australia) According to the Productivity Commission’s 2010 final report into gambling, the social cost of problem gambling is close to 4.7 billion dollars a year. Some of the harms resulting from problem gambling include depression, suicide, lower work productivity, job loss, relationship breakdown, crime and bankruptcy.[55] A survey conducted in 2008 found that the most common motivation for fraud was problem gambling, with each incident averaging a loss of $1.1 million.[55]” . . . “Nevada has the highest percentage of pathological gambling; a 2002 report estimated 2.2 to 3.6 percent of Nevada residents over the age of 18 could be called problem gamblers.” . . . “According to a 1997 meta-analysis by Harvard Medical School’s division on addictions, 1.1 percent of the adult population of the United States and Canada could be called pathological gamblers.[63] A 1996 study estimated 1.2 to 1.9 percent of adults in Canada were pathological.[64]” . . . “approximately 6 million American adults are addicted to gambling.[67]” Signs of a gambling problem include:[67][medical citation needed] • Using income or savings to gamble while letting bills go unpaid • Repeated unsuccessful attempts to stop gambling • Chasing losses • Losing sleep over thoughts of gambling • Arguing with friends or family about gambling behavior • Feeling depressed or suicidal because of gambling losses”)

Gambling a profitable industry.

“Gambling Global Market Report 2022,” The Business Research Company, thebusinessresearchcompany.com/report/gambling-global-market-report (“The global gambling market grew from $287.43 billion in 2021 to $456.61 billion in 2022 at a compound annual growth rate (CAGR) of 58.9%. . . . The gambling market is expected to grow to $840.29 billion in 2026 at a CAGR of 16.5%.”)

Adam Scovette, “Casinos and Regional Economies: Has the Game Changed?” Economic Brief, Federal Reserve Bank of Richmond, July 2022, No. 22-28, Casinos and Regional Economies: Has the Game Changed?

Increased number of gamblers.

Nicholas Johnson, “Move to online gambling a bad deal for Iowans,” Letter to the Editor, Iowa City Press Citizen, April 7, 2021, https://www.press-citizen.com/story/opinion/letters-to-the-editor/2021/04/07/press-citizen-letters-miller-meeks-online-gambling-good-samaritan/7103553002/ (“Gambling, once illegal in Iowa, is now online. TV commercials encourage record-breaking sports betting. As a former sports law professor, gambling’s impact on the integrity of collegiate and professional sports concerns me. More concerning, Tom Coates (Des Moines Consumer Credit) believes the odds are good that Iowa will see more bankruptcies, suicides, divorces and other fallout due to the spike in sports wagering.”)

“Statistics,” Lake-Geauga Recovery Centers, https://www.lgrc.us/problem-gambling-prevention-2/statistics/ (“Approximately 2 million Americans are addicted to gambling with another 6-8 million Americans experiencing life problems directly related to their gambling.”)

Marsha Mercer, “As Sports Betting Grows, States Tackle Teenage Problem Gambling,” PEW, July 12, 2022, https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/07/12/as-sports-betting-grows-states-tackle-teenage-problem-gambling (“We believe that the risks for gambling addiction overall have grown 30% from 2018 to 2021, with the risk concentrated among young males 18 to 24 who are sports bettors,’ said Keith Whyte, the council’s executive director, in an interview. … The percentage of high school students with a gambling problem is double that of adults, research has found. About 5% of all young people between 11 and 17 meet at least one of the criteria for a gambling problem….”)

Gambling and college athletics.

Tom Witosky, “U of I to review sports-gambling links; Car-giveaway ad spotlights whether schools should promote state lottery, take casino sponsorship dollars,” Des Moines Register, Feb. 8, 2007, https://www.nicholasjohnson.org/BlogStuf/regents/twdr0208.html

Deep Throat.

“All the President’s Men,” 1976, https://www.imdb.com/title/tt0074119/

# # #


Unknown said...

Iowa never should have gone down the road to legalizing gambling. Now, we are all addicted, whether we gamble or not. Our government depends on the revenue.

prophet of doom said...

Its one of the tricky parts of being in a society. Allowing freedom, while not allowing things which are truly damaging. As for gambling, I am of two minds. On one hand, I have been known to play poker (taught by my father, a WWII battleship Sailor/Iowa Engineer) and play it very well. And I have been known to go to horse racing tracks (using a system from my father, and knowledge from my wife with a degree in horse). But I would argue that both of those are much more of a "skill" based activity. On the other hand, living in Illinois, I am bombarded with Casino after Casino ad, all of which suggest that "everyone wins" and a lottery which gets lead coverage on what passes for the national news. And those are almost nothing by pure luck. And I guess I would differentiate the two....

As for legalization, its the prohibition problem. People were still gambling, but the funding was going to the bad guys. Prohibition created organized crime.

As for the revenue, in Illinois they put in the lottery to "fund the schools", and then they proceeded to cut other funding for the schools. So it wasn't actually funding the schools...

Yeah.. confused.... but way too much gambling in our society.

Nick said...

Thanks, Prophet. Good comment. Agree about 95%. I do think there's a distinction between a gambling activity involving skills and those involving little more than dumb luck. But the question is really more about the casino-encouraged addictions.

Playing a slot machine is not my idea of a good time. There are other things I find more interesting.

But if someone earning $75,000 a year enjoys playing the slots, doesn't do it more than once or twice a month if that, and holds themselves to losing on the activity no more than they'd spend taking someone to the movies, I don't see that as a serious societal problem.

(Back in the day when folks put actual money in them, I described the process -- though I wasn't playing them myself -- as one of starting out with the coins you're going to play in your left pocket. Everything you win goes in your right pocket. When the left pocket is empty you go home. That way you can start with $100 and go home with $80 or more -- a $20 evening.)

-- Nick