Overview of Public Policy and Commercial Gambling Martin C. McGurrin, Ph.D.
University of Pennsylvania Vicki Abt, Ph.D.
Pennsylvania State University
Public policy functions as an administrative pillar in supporting culture and social order. Policy refers to a set of relatively general statements which guide government officials in taking action which presumably protects and promotes the public's welfare. The public's welfare is, however, seldom a simple, homogenous phenomenon. The public consists of many different interest groups whose views on issues of public welfare differ considerably and often conflict. The solution to one interest group's problems may be the actual cause of problems for other interests groups. Ideally, public policy functions impartially within this field of conflicting interest without advancing or obstructing one group's legitimate interests more so than another's. This impartial stance, however, is often not achieved for several reasons. First, not every interest group succeeds equally in competing with other interest groups in making its position known to legislators. Second, some interest groups have more financial and political influence than others. The bottom line for most
Address correspondence and reprint requests to Martin C. McGurrin, Ph.D., section on Public Psychiatry, Department of Psychiatry, University of Pennsylvania, 3600 Market Street (Tth Floor), Philadelphia, PA 19104-2648.
,Journal of Gambling Studies Vol. 8(4), Winter 1992 9 1992 Human Sciences Press, Inc.
325
326
JOURNAL OF GAMBLING STUDIES
legislators is re-election, so they are most influenced by those groups that can demonstrate their influence over re-election. For example, the American gun industry has been experiencing declin.ing sales since 1975. In an effort to elevate sales and profits within their American market, they have mounted sales campaigns to encourage persons who don't yet own a firearm to buy one and those who already own firearms to buy more. Together with the National Rifle Association, the gun industry has been extremely successful in obstructing gun control legislation through lobbying and focused power politics. They have succeeded even though there are already 200 million guns owned in America; the United States has the highest rate of homicide and civilian deaths due to firearm accidents among all industrialized nations; and the National Association of Police Officer's and other citizen groups have repeatedly appealed for more effective gun control legislation at every level of government (Eckholm, 1992). A third reason that public policy may not be formulated and implemented in an impartial manner is that government itself may become one of the interest groups attempting to influence policy rather than serving as the general public's ombudsman. This condition is especially characteristic of public policy regarding commercial gambling. The involvement of government as a special interest group which attempts to influence public policy is not unique to the United States, but during the past thirty years, government's involvement has been more accelerated and extensive in the United States than elsewhere in the world. In any case, government's discovery of commercial gambling as a source of revenue, which is used as a substitute for new taxes, has disqualified government as an impartial referee among conflicting interest groups dealing with gambling. Instead, government has clear vested interests in influencing public policy on gambling. First, government has an interest in proliferating commercial gambling as a potential source of new revenues; and secondly, it has an interest in promoting the argument that the basic reversal of its earlier legal and moral opposition to gambling is a reflection of the public's will in promoting the public good. This argument circumvents the thorny debate over gambling revenue, new taxes or reduced services. Although none of the three strategies may give legislators the moral high ground, most legislators recognize pragmatically which strategy is least threatening to re-election.
MARTIN C. MCGURRIN AND VICKI ABT
327
This special issue of the Journal of Gambling Studies has the central theme of public policy and gambling. Each of the articles examines aspects of commercial gambling and public policy. Although the specific issues examined may differ, all of the articles discuss the conflicts among different interest groups and the inherent internal inconsistencies in existing and proposed public policy on commercial gambling, not the least of which results from government's own vested interests. Garry J. Smith and James H. Frey each examine the legalization of sports gambling. Both Smith and Frey begin their analyses by discussing economic aspects of sports gambling and the related conflicting vested interests of government, organized crime, professional players associations, and team owners. Only secondarily do they consider the impact of legalized sports gambling on cultural values, the ideological image of sports in Canada and the United States, and other fundamental and long range moral consequences of legalization. In doing so, they are being neither cynical nor irresponsible in their analyses; they are essentially realistic. If moral considerations were ever paramount in determining decisions on whether or not to legalize gambling, they are not so currently. Economic, political, and related materialistic forces drive the decision making mechanism regarding legalized gambling, even though the political structure of the mechanism is different in Canada from that in the United States. As of this writing (March 9, 1992), President George Bush of the United States signed federal legislation which extends the opportunity for legalized gambling on United States cruise ships in order to make them economically more competitive with other nation's cruise ships. Both Smith and Frey do an excellent job of demonstrating the complexity of forces that underlie the debate to legalize sports gambling, including cultural values and moral factors. Smith's more international perspective assists the reader in recognizing that there is already considerable precedent for experience with legal sports pools or lotteries in other countries even though it is still a rather recent issue in North America. The regressive taxation inherent in state lotteries in the United States and in pari-mutuel systems of calculating gambling odds internationally is confronted head on in terms of moral and ethical criticism by Pamela Mobilia and Jack Dowie in their articles on this issue.Using basic statistical techniques, Mobilia argues that the Kansas State Lottery is essentially a regressive tax because there is no difference in the
328
JOURNAL OF GAMBLING STUDIES
amount bet in counties with lower average per capita income than those with higher income and the bet as a percentage of income is higher in counties with lower incomes than in counties with higher incomes. Mobilia's argument may be somewhat weakened by an ecological fallacy in using county averages to analyze individual actions (Robinson, 1950), but her thesis is clear and credible. Dowie examines the methods of setting odds and payoff in parimutuel systems. In practice, these methods often deviate from a pure impartial pari-mutuel principle. He argues that because there is an inverse relationship between the income/wealth of gamblers and the average odds of bets they place, the methods of calculating the amount government deducts from total dollars won moves pari-mutuel systems in the unethical direction of becoming regressive taxation. Both Mobilia and Dowie's arguments raise three unresolved, but pivotal issues in formulating public policy on commercial gambling. First, in reality, where is the line between involuntary taxation and voluntary taxation (e.g., state lotteries)? Second, where do voluntary and involuntary human behaviors intersect, if they even do so; what is the role of choice in human behavior? Third, what are the ethical and moral responsibilities of public policy regarding commercial gambling and whose interests must be protected? The formal legal dimension of public policy is analyzed and extremely well documented in I. Nelson Rose's article on "The Future of Indian Gaming". The conflict of interests is further illustrated by discussion of recent litigation involving Native Americans bringing suit against State governments and utilizing Federal law (Indian Gaming Regulatory Act) as a basis for protecting their interests when challenged by State governments. From a public policy perspective the unfolding drama is both intriguing and somewhat burlesque. Since Native Americans can legally run any game allowed by the State, it seems that the only legal means a State government has to prohibit Native American competition is to eliminate gambling for all other groups also--including the State itself. Volberg and Steadman report results from a three year study of characteristics of pathological gamblers in the general population. Their findings disclose several inaccuracies in earlier profiles of pathological gamblers which were based on limited data sets and biased anecdotes. These findings are essential to sound public policy on gambling and the treatment of pathological gamblers. Sound epidem-
M A R T I N C. M C G U R R I N A N D V I C K I ABT
329
iological data can be acquired if government and private commercial gambling enterprises will pay for the cost of research. Finally, Abt and McGurrin discuss the complex interrelationships between commercial gambling and fundamental American values. While they do not deny the economic forces which drive the policy mechanisms for legalizing gambling, they argue that the profound appeal of gambling, whether legal or illegal, resides in a universal h u m a n psychological need to feel some sense of control in the face of relentless and dangerous chance events which are a part of h u m a n existence. Public policy should reflect an awareness of the social construction of gambling and the ritual function of games of chance which affirm m a n y basic cultural values while simultaneously conflicting with others. Societies are evolving entities and public policy should be sensitive to the dynamic forces that affect the public's welfare. This special issue of the Journal is intended to underscore the assertion that, as we move through the decade of the 1990's, there is no impartial representative of the public's welfare among the various groups that influence the formulation of public policy on commercial gamb l i n g - n o t even government. Whenever government's interests cannot be equated to the public's interest, the democratic process is weakened. It is naive to think, however, that the public's interest is an obvious issue which can be stated simply and represented without conflict, or that public policy always reflects full democratic process, even in democracies. Gambling is an excellent example of the complexity of human behavior, political process and social organization. Gambling cannot be properly understood or managed in terms of simplistic dichotomies like good and evil or they and we. Whenever groups promote their interests in such morally or emotionally charged terms, one can be certain that interests groups' public positions are masks to acceptably disguise more complex private agenda. The practice of disguise cannot be prevented, but it can be recognized and revealed by the mature citizen.
REFERENCES Eckholm, E. (1992). Ailing gun industry confronts outrage over glut of violence. The New York Times. CXLI, March 8, page 2. Robinson, W.S. (1950). Ecological correlation and the behavior of individuals. American Sociologi~ cal Review, 15, 351-357.
University of Pennsylvania Vicki Abt, Ph.D.
Pennsylvania State University
Public policy functions as an administrative pillar in supporting culture and social order. Policy refers to a set of relatively general statements which guide government officials in taking action which presumably protects and promotes the public's welfare. The public's welfare is, however, seldom a simple, homogenous phenomenon. The public consists of many different interest groups whose views on issues of public welfare differ considerably and often conflict. The solution to one interest group's problems may be the actual cause of problems for other interests groups. Ideally, public policy functions impartially within this field of conflicting interest without advancing or obstructing one group's legitimate interests more so than another's. This impartial stance, however, is often not achieved for several reasons. First, not every interest group succeeds equally in competing with other interest groups in making its position known to legislators. Second, some interest groups have more financial and political influence than others. The bottom line for most
Address correspondence and reprint requests to Martin C. McGurrin, Ph.D., section on Public Psychiatry, Department of Psychiatry, University of Pennsylvania, 3600 Market Street (Tth Floor), Philadelphia, PA 19104-2648.
,Journal of Gambling Studies Vol. 8(4), Winter 1992 9 1992 Human Sciences Press, Inc.
325
326
JOURNAL OF GAMBLING STUDIES
legislators is re-election, so they are most influenced by those groups that can demonstrate their influence over re-election. For example, the American gun industry has been experiencing declin.ing sales since 1975. In an effort to elevate sales and profits within their American market, they have mounted sales campaigns to encourage persons who don't yet own a firearm to buy one and those who already own firearms to buy more. Together with the National Rifle Association, the gun industry has been extremely successful in obstructing gun control legislation through lobbying and focused power politics. They have succeeded even though there are already 200 million guns owned in America; the United States has the highest rate of homicide and civilian deaths due to firearm accidents among all industrialized nations; and the National Association of Police Officer's and other citizen groups have repeatedly appealed for more effective gun control legislation at every level of government (Eckholm, 1992). A third reason that public policy may not be formulated and implemented in an impartial manner is that government itself may become one of the interest groups attempting to influence policy rather than serving as the general public's ombudsman. This condition is especially characteristic of public policy regarding commercial gambling. The involvement of government as a special interest group which attempts to influence public policy is not unique to the United States, but during the past thirty years, government's involvement has been more accelerated and extensive in the United States than elsewhere in the world. In any case, government's discovery of commercial gambling as a source of revenue, which is used as a substitute for new taxes, has disqualified government as an impartial referee among conflicting interest groups dealing with gambling. Instead, government has clear vested interests in influencing public policy on gambling. First, government has an interest in proliferating commercial gambling as a potential source of new revenues; and secondly, it has an interest in promoting the argument that the basic reversal of its earlier legal and moral opposition to gambling is a reflection of the public's will in promoting the public good. This argument circumvents the thorny debate over gambling revenue, new taxes or reduced services. Although none of the three strategies may give legislators the moral high ground, most legislators recognize pragmatically which strategy is least threatening to re-election.
MARTIN C. MCGURRIN AND VICKI ABT
327
This special issue of the Journal of Gambling Studies has the central theme of public policy and gambling. Each of the articles examines aspects of commercial gambling and public policy. Although the specific issues examined may differ, all of the articles discuss the conflicts among different interest groups and the inherent internal inconsistencies in existing and proposed public policy on commercial gambling, not the least of which results from government's own vested interests. Garry J. Smith and James H. Frey each examine the legalization of sports gambling. Both Smith and Frey begin their analyses by discussing economic aspects of sports gambling and the related conflicting vested interests of government, organized crime, professional players associations, and team owners. Only secondarily do they consider the impact of legalized sports gambling on cultural values, the ideological image of sports in Canada and the United States, and other fundamental and long range moral consequences of legalization. In doing so, they are being neither cynical nor irresponsible in their analyses; they are essentially realistic. If moral considerations were ever paramount in determining decisions on whether or not to legalize gambling, they are not so currently. Economic, political, and related materialistic forces drive the decision making mechanism regarding legalized gambling, even though the political structure of the mechanism is different in Canada from that in the United States. As of this writing (March 9, 1992), President George Bush of the United States signed federal legislation which extends the opportunity for legalized gambling on United States cruise ships in order to make them economically more competitive with other nation's cruise ships. Both Smith and Frey do an excellent job of demonstrating the complexity of forces that underlie the debate to legalize sports gambling, including cultural values and moral factors. Smith's more international perspective assists the reader in recognizing that there is already considerable precedent for experience with legal sports pools or lotteries in other countries even though it is still a rather recent issue in North America. The regressive taxation inherent in state lotteries in the United States and in pari-mutuel systems of calculating gambling odds internationally is confronted head on in terms of moral and ethical criticism by Pamela Mobilia and Jack Dowie in their articles on this issue.Using basic statistical techniques, Mobilia argues that the Kansas State Lottery is essentially a regressive tax because there is no difference in the
328
JOURNAL OF GAMBLING STUDIES
amount bet in counties with lower average per capita income than those with higher income and the bet as a percentage of income is higher in counties with lower incomes than in counties with higher incomes. Mobilia's argument may be somewhat weakened by an ecological fallacy in using county averages to analyze individual actions (Robinson, 1950), but her thesis is clear and credible. Dowie examines the methods of setting odds and payoff in parimutuel systems. In practice, these methods often deviate from a pure impartial pari-mutuel principle. He argues that because there is an inverse relationship between the income/wealth of gamblers and the average odds of bets they place, the methods of calculating the amount government deducts from total dollars won moves pari-mutuel systems in the unethical direction of becoming regressive taxation. Both Mobilia and Dowie's arguments raise three unresolved, but pivotal issues in formulating public policy on commercial gambling. First, in reality, where is the line between involuntary taxation and voluntary taxation (e.g., state lotteries)? Second, where do voluntary and involuntary human behaviors intersect, if they even do so; what is the role of choice in human behavior? Third, what are the ethical and moral responsibilities of public policy regarding commercial gambling and whose interests must be protected? The formal legal dimension of public policy is analyzed and extremely well documented in I. Nelson Rose's article on "The Future of Indian Gaming". The conflict of interests is further illustrated by discussion of recent litigation involving Native Americans bringing suit against State governments and utilizing Federal law (Indian Gaming Regulatory Act) as a basis for protecting their interests when challenged by State governments. From a public policy perspective the unfolding drama is both intriguing and somewhat burlesque. Since Native Americans can legally run any game allowed by the State, it seems that the only legal means a State government has to prohibit Native American competition is to eliminate gambling for all other groups also--including the State itself. Volberg and Steadman report results from a three year study of characteristics of pathological gamblers in the general population. Their findings disclose several inaccuracies in earlier profiles of pathological gamblers which were based on limited data sets and biased anecdotes. These findings are essential to sound public policy on gambling and the treatment of pathological gamblers. Sound epidem-
M A R T I N C. M C G U R R I N A N D V I C K I ABT
329
iological data can be acquired if government and private commercial gambling enterprises will pay for the cost of research. Finally, Abt and McGurrin discuss the complex interrelationships between commercial gambling and fundamental American values. While they do not deny the economic forces which drive the policy mechanisms for legalizing gambling, they argue that the profound appeal of gambling, whether legal or illegal, resides in a universal h u m a n psychological need to feel some sense of control in the face of relentless and dangerous chance events which are a part of h u m a n existence. Public policy should reflect an awareness of the social construction of gambling and the ritual function of games of chance which affirm m a n y basic cultural values while simultaneously conflicting with others. Societies are evolving entities and public policy should be sensitive to the dynamic forces that affect the public's welfare. This special issue of the Journal is intended to underscore the assertion that, as we move through the decade of the 1990's, there is no impartial representative of the public's welfare among the various groups that influence the formulation of public policy on commercial gamb l i n g - n o t even government. Whenever government's interests cannot be equated to the public's interest, the democratic process is weakened. It is naive to think, however, that the public's interest is an obvious issue which can be stated simply and represented without conflict, or that public policy always reflects full democratic process, even in democracies. Gambling is an excellent example of the complexity of human behavior, political process and social organization. Gambling cannot be properly understood or managed in terms of simplistic dichotomies like good and evil or they and we. Whenever groups promote their interests in such morally or emotionally charged terms, one can be certain that interests groups' public positions are masks to acceptably disguise more complex private agenda. The practice of disguise cannot be prevented, but it can be recognized and revealed by the mature citizen.
REFERENCES Eckholm, E. (1992). Ailing gun industry confronts outrage over glut of violence. The New York Times. CXLI, March 8, page 2. Robinson, W.S. (1950). Ecological correlation and the behavior of individuals. American Sociologi~ cal Review, 15, 351-357.
