Predatory Gambling, Democracy and the American Dream

How the government program of state-sponsored gambling is predatory, deceptive, addictive

and undermines the purpose and promise of America

An Overview
No government program exists in America that is more talked about yet less understood than state-sponsored
predatory gambling. While there are many well-intentioned public officials, reporters, editorial writers and bloggers
who discuss the program in terms of state revenues and potential jobs, most know virtually nothing about the
product design, the technology, the marketing and the business model used by casinos and lotteries. Most don't
even use the product frequently, if at all. They possess little understanding about the pathologies of gambling in
large part because gambling operators fund most of the public health research and counseling services. And most
don't have personal relationships with the out-of-control gamblers who make up nearly all of the profits.

The very important policy question before the American people is not a debate about social forms of gambling like
the kitchen table poker game with the guys from the neighborhood. It’s about predatory gambling - using gambling
as a government program to prey on human weakness for profit – and a business model that relies on 90% of its
gambling profits coming from 10% of the people who use the product, making nine out of every ten patrons
virtually irrelevant to their revenues.1

The era of phony prosperity, casino capitalism and Bernie Madoff-style "something for nothing schemes" is over.

Seven Short Questions & Answers About Predatory Gambling

1) “How is predatory gambling different than social forms of gambling?”

There are at least four major differences between social forms of gambling like the kitchen table poker game versus
predatory gambling products like slot machines and lottery scratch tickets: the speed of the games; the kind of
“buzz” or high people get when they play; the amount of money people lose; and the predatory marketing used to
promote it.

2) “What makes the purest form of predatory gambling, electronic gambling

machines, so predatory and deceptive?”
1
Winner Takes All By Christina Binkley, 2008. Pg. 184
1
There’s little understanding of the machines and marketing that drive the predatory gambling trade. According to
MIT Professor Natasha Schull, the goal of the technology is no secret: how to get people to play longer, faster and
more intensively. Every feature of the machine- the mathematical structure, visual graphics, sound dynamics,
seating and screen ergonomics- is geared, in the actual language of the predatory gambling trade, to get gamblers to
“play to extinction” – which means until their money is gone. A slot machine doesn’t have a handle to pull or use
reels – they use buttons and video screens. Dozens of games can be played per minute. Instead of actual reels, they
have virtual reels that rely on complicated algorithms and virtual reel mapping, concepts that few people in the
predatory gambling trade itself understand – much less policy makers and citizens considering these machines in
their own communities.

According to Dr. Schull, when you look at what these algorithms are doing, it’s a high tech version of “weighting
the deck” or “loading the dice.” (For you non-gamblers out there, that means the machines are cheating.). She
concludes by saying that a slot machine is designed to be so effective at extracting money from people that it is “a
product that, for all intents and purposes, approaches every player as a potential addict -- in other words, someone
who won't stop playing until his or her means are depleted.”2

3) “How addictive are slot machines?”

Predatory gambling supporters nearly always refer to gambling addiction rates in general population numbers but
most people don’t gamble regularly. A truer representation of the addictiveness of the product is to look at the
people who use electronic gambling machines once a month or more. After all, isn’t that really the key public
health question? Is there a difference between traveling to a casino a handful of times a year versus putting these
machines near your community where people can play them every day or weekly?

The answer is yes, there is a major difference. A prominent government study spotlighted that nearly 1 out of 2
people who use electronic gambling machines once or more per month show problem gambling behavior.3 And it’s
these out-of-control gamblers who are the primary source of the predatory gambling trade’s profits.4

Why are the machines so addictive when people are provided frequent access to them? Because they cause changes
in brain chemistry that are as addictive as drugs, according to National Council on Problem Gambling Executive
Director Keith Whyte.5 Neurological studies show that gambling rewards the body with the release of dopamine, a
brain chemical that causes a sensation similar to taking cocaine. 6

Using a slot machine or taking a hit of cocaine only one time won’t necessarily turn every person into an addict. But
a government program making such products easily accessible to the general public so they can get that buzz or
intense escape anytime they want is nothing short of an addiction delivery system…all in the name of funding
public services we all use.

4) “What role does state-sponsored predatory gambling play in America’s debt

culture?”
2
Ibid.
3
Nova Scotia Gambling Prevalence Study, Office of Health Promotion, June 2004. Page XI
4
Winner Takes All By Christina Binkley, 2008. Pg. 184
5
“When Gambling Gets Out of Control” Kalamazoo Gazette by Linda Mah September 9, 2008
http://www.mlive.com/features/kzgazette/index.ssf?/base/features-0/1220971845287050.xml&coll=7
6
Dr. Hans Breiter, Massachusetts General Hospital. Director, Motivational and Emotional Neuroscience Center. Video interview
http://www.youtube.com/watch?v=jNL3FzU_glU
2
Nearly every state Attorney General in America has been suing subprime lenders for their predatory lending
practices. Congress recently acted to roll back the predatory practices of credit card companies. Yet across the
country, there is a massive effort to expand the most predatory institution still standing in America – the
government program of state-sponsored predatory gambling.

What this is doing in America is creating two classes of people: the Investor Class and the Lottery Class. While
most of us are part of the Investor Class, putting money away in retirement accounts and 529 college funds for our
kids, the state is turning tens of thousands of people who are small earners with the potential to be small savers into
a new class of habitual bettors - the Lottery Class. They represent the 1 out of 5 Americans who, according to the
Consumer Federation of America, think the best way to achieve long-term financial security is to use state-
sponsored gambling products.7

In these difficult economic times, why would public officials promote a government program consisting of virtually
worthless gambling products that prevents millions of low and moderate-income of American from joining the
class of savers and investors? Why not help people accumulate the capital they need to live the real American
Dream?

Imagine if our nation’s leaders during the Great Depression had said they were going to implement a government
program legalizing slot machines and $20 lottery scratch tickets to make up for "lost revenue" and pay for the war
effort. How easy it would have been. Instead, they challenged the country to act together and buy savings bonds,
leading America to achieve the highest savings rate of the 20th century. It helped spur a massive economic boom in
which everyone prospered. The gap between rich and poor was the smallest it has been in the last 80 years.

Leaders then led America through turbulent times by inspiring us to hope for the best and then challenging us to go
work for it. They called on us to invest in a common purpose. It’s the same kind of spirit we need today.

5) “How does predatory gambling violate America’s core democratic principles?”

Taylor Branch is the Pulitzer Prize-winning historian of the Civil Rights Movement and biographer of Martin
Luther King. He also has been one of America’s most outspoken voices about the government program of state-
sponsored predatory gambling. According to Branch: “State-sponsored predatory gambling is essentially a
corruption of democracy because it violates the most basic premises that make democracy unique: that you can be
self-governing, you can be honest and open about your disagreements as well as your agreements, and that you trust
other people that you are in this together. That’s what a compact of citizens is. And the first-step away from it is to
play each other for suckers. We’re going to trick them into thinking they are going to get rich but they are really
going to be paying my taxes.”8

The government program of state-sponsored predatory gambling is dependent on addicted or heavily-indebted

citizens. Predatory gambling operators attempt to elude charges of exploitation by pleading it is a “voluntary” act,
hiding under the cloak of “freedom.” But by definition, someone who is an addict or someone who is in deep
financial debt is not free. In a country where everyone is considered equal, where all blood is royal, how can the
state actively promote a government program that renders some of our fellow citizens as expendable?

One of America’s most sacred founding principles was “no taxation without representation” and it’s time the
principle of “no taxation by exploitation” was added right beneath it. Because the way we raise money to pay for
government says as much about our democratic principles and values as the way we spend it.

7
“Lottery Taxes Divert Income from Retirement Savings” The Tax Foundation, Alicia Hansen and Gerald Prante January 19, 2006
http://www.taxfoundation.org/news/show/1302.html
8
Taylor Branch, StopPredatoryGambling.org National Conference, Sept. 28, 2008. http://www.youtube.com/watch?v=jNL3FzU_glU

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6) “Why isn’t predatory gambling a form of entertainment?”

Advocates of the predatory gambling trade say it’s no different than other forms of entertainment. They describe it
the same as “drinking wine, going out to a restaurant or going to the movies.” Yet the owner of the vineyard drinks
the wine he makes. The owner of the restaurant eats the food he serves. The movie actress watches the movies she
makes. This is the only product or service where most of the people who own it and promote it, including public
officials, don’t use it and don’t want to live near it.9

7) “Why won’t predatory gambling create jobs and help our economy prosper?”
The crisis on Wall Street- AIG, Lehman Brothers, Bernie Madoff and so on - are all part of what’s been called
“casino capitalism.” They didn’t call it “health care capitalism.” They didn’t call it “biotech capitalism.” They
called it “casino capitalism” - using predatory practices, financial gimmicks and something for nothing schemes to
promote an illusion of free money, all at the expense of unsuspecting Americans.

Predatory gambling operators push the “jobs” story line but no one defends these jobs as jobs with justice. That’s
because they can’t. These are jobs with injustice.

Predatory gambling is another kind of something for nothing scheme, which is why it will not rescue us or
America’s economy. We’re going to have to get out of this economic crisis the old-fashioned way--by digging
inside ourselves and getting back to basics: improving U.S. productivity, saving more, reducing our debt,
strengthening our families, studying harder and inventing more products and services to export. The days of phony
prosperity are over.10

For more information or to support our efforts,

please visit StopPredatoryGambling.org

9
Winner Takes All By Christina Binkley, 2008. Pg. 177
10
“China to the Rescue? Not!” The New York Times. Thomas Friedman, Dec. 20, 2008