The billions of new dollars spent at casinos represent a net transfer of wealth to big business and to pay workers whose labor is not as productive as, say, repairing the nation’s crumbling infrastructure. Casino capitalism is an apt metaphor exactly because — whatever one might think about legalized gambling — it is not generally perceived as a sound operating principle for the entire economy. Yet the steady march of casino gambling now sketches an eerie facsimile of our political economy writ large. In fact, casinos thrive amid economic misery.

Industry leaders tout casinos as a tool for creating jobs and increasing revenue, and recession-weary politicians are listening.

“When you’re in recession, what that normally means is that state government suffers with regard to the revenue they have available to fund public services,” says Frank Fahrenkopf,  CEO of the American Gaming Association, the industry trade group. “When the state legislature needs revenue, this has proven over the years to be a very successful way to bring in capital investment, economic development, jobs, and tax revenue.”

The United States has since the early 1990s undergone a piecemeal but profound social and economic transformation: casinos, nearly prohibited nationwide in 1910, are now legal in some form in 40 states, including 24 with legalized commercial operations. The companies involved make a tidy profit: Of the $34.6 billion in revenue (and again, this figure is in addition to the $26.7 billion generated at the nation’s 448 tribal casinos), casinos paid just $7.59 billion in taxes and $13.3 billion in wages and benefits.

With budgets tight, “the governor will get the bright idea that he can open casinos and then not have to raise taxes,” says Earl Grinols, a Baylor University economics professor and gambling critic. “We have a new round of expansion in New York, in Pennsylvania, in Massachusetts. The industry uses every recession as an opportunity for expansion.”

In Illinois, Chicago Mayor Rahm Emanuel is pressing for a casino to make up for a budget shortfall. In Detroit, which continues its slide into oblivion, casinos grossed $1.378 billion in revenue. In Pennsylvania’s Lehigh Valley, a new Sands casino opened in 2009 at the site of the shuttered Bethlehem Steel mill. Though the casino won’t come close to replacing Bethlehem’s 31,523 unionized steel jobs, residents of the depressed city packed the casino on opening day to revel in the possibility of revival.

“Even in this economy, people still want to challenge luck,” a pleased Las Vegas Sands CEO Sheldon Adelson told the New York Times.

Many gamblers end up unlucky, and much of the casino debate has hinged on the question of social costs: whether casinos cause more crime and create more gambling addicts.

“The social costs clearly outweigh the social benefits,” says professor Grinols. “The only people who benefit from casinos are the owners.”

Pennsylvania’s I-95 corridor is now crowded with gambling houses: Parx casino in Bensalem, SugarHouse on Philadelphia’s Delaware River waterfront, and Harrah’s in Chester, where the school district is virtually bankrupt. Harrah’s general manager said the customers in its database visit the casino an average of 4.5 times a week, while the state’s news media have fixated on the troubling trend of parents  leaving their children locked in parked cars when gambling in Bensalem.

A significant portion of gambling revenues — one-third to one-half — is derived from problem gamblers, says Grinols, who, in a 2006 Review of Economics and Statistics article concluded that 8 percent of crime in casino counties can be attributed to the presence of legal gambling.

But Fahrenkopf, a lawyer and former chairman of the Republican National Committee, says that Grinols and allied academics rely on flawed data. “They no longer argue the morality of gaming, because the American people are way past that. So they argue about social costs,” says Fahrenkopf. “As my old boss Ronald Reagan used to say with regard to the Russians: trust but verify.”

Indeed, the literature is conflicted. Some academics, like Harvard Medical School’s Howard Schaffer, say that the number of gambling addicts has not increased alongside casino expansion. Douglas Walker, a professor of economics at the College of Charleston, has criticized Grinol’s methodology in studying casino-related crime.

But the larger problem is indisputable: The growth of the gambling industry feeds on America’s job insecurity; people, whether gambling or seeking employment, have fewer viable ways to make good money. As the country has deindustrialized since the 1980s, and unions have been marginalized, real wages stagnated and then declined. At the same time, a deregulated and ascendent financial sector offered easier-than-ever credit cards and home mortgages, leading Americans desperate to maintain their lifestyle deep into debt.

Sociologists Kevin Leicht and Scott Fitzgerald have dubbed these people “postindustrial peasants,” tied to debt — from subprime mortgages to the high-on-student debt but low-on- job-prospects for-profit colleges — in the manner their agrarian forebears were tied to land. Meanwhile, the poor depend on an array of “alternative” and usurious financial services like pawn shops, payday lenders and check-cashing stores to stay afloat.

“At the same time that work has become less secure, there has also been this massive move to privatize the financing system for the two traditional mechanisms of economic mobility: homeownership and education. All these industries have grown by trading on people’s efforts — sometimes concerted, sometimes desperate — to get ahead in a world where opportunities in the labor market are hard to come by,” says Adam Goldstein, a doctoral student at the University of California, Berkeley, who studies the financialization of the American economy (and a friend).

Bad bet

When it comes to the real economy, legal gambling has the same limitation as Wall Street speculation: It doesn’t make tangible things that we need or foster broad-based prosperity.

In fact, the gaming economy may be reaching its outer limits, as new casinos cannibalize revenue from preexisting operations. In Atlantic City, casinos have experienced a $1.6 billion decline in revenue and hemorrhaged more than 96,000 jobs since Pennsylvania opened its first casino in 2006. The depressed business reduces the tax revenue generated for desperate state coffers and prompt government to take ever more desperate measures. The $2.4 billion Revel, Atlantic City’s newest resort and casino slated to open in May, was only completed after Gov. Chris Christie delivered a $261 million tax credit to the project.

The American Gaming Association, says Fahrenkopf, does not get involved in statehouse debates because they so often pit his members against one another.

In states that legalize gambling, casinos no doubt create jobs but they don’t necessarily stimulate the larger economy. A 1999 report by the National Gambling Impact Study Commission found that “few businesses can be found more than a few blocks from the Atlantic City boardwalk. Many of the ‘local’ businesses remaining are pawnshops, cash-for-gold stores and discount outlets. One witness noted that, ‘in 1978 [the year the first casino opened], there were 311 taverns and restaurants in Atlantic City. Nineteen years later, only 66 remained, despite the promise that gaming would be good for the city’s own.’”

The destruction of Main Street America in the age of Wal-Mart cannot, of course, be blamed entirely on casinos.

“You always get that sort of thing, and it’s not only in this industry,” says Fahrenkopf. “When a new mall is coming into a community, it’s going to have chain shoe stores, chain restaurants. The small town businesses are going to face the same — I don’t know if you want to call it capitalism — the same free market challenge.”

Casino jobs are comparable to those created throughout the American service economy: They are no replacement for vanished manufacturing employment, and wages can be quite low if unions don’t fight their way into the picture. In Las Vegas, Culinary Workers Local 226 (part of UNITE HERE) has organized 60,000 casino and hospitality workers, boosting wages and benefits far above those that prevail in non-union Reno. But Atlantic City’s downward spiral shows the fragility of labor success in the service economy. Most of the 5,500 permanent employees at the Revel will, in a first for the heavily unionized boardwalk, have to reapply for their jobs every four to six years.

Likewise, the prospect of casinos driving net job growth nationwide seems unlikely. While commercial casino revenues nationwide have increased by 73 percent since 1998, employment grew by just 5 percent, or 15,132 jobs, to 340,564. In New England, Massachusetts, Connecticut, Maine and Rhode Island are rushing to expand casino gambling and outcompete their neighbors. But as casinos expand, new profits are by-and-large net transfers to casino magnates who, flush with cash, leverage political muscle at the statehouse. In New York, Malaysian billionaire KT Lim, chairman of gambling empire Genting Berhad, has poured a large but undisclosed sum into a high-end lobbying operation to expand gambling in New York with the goal of remaking the “racino” at the Aqueduct Racetrack in Queens into a multibillion-dollar casino resort and conference center.

In Florida, legislation to legalize casinos was last month defeated in large part because of Disney World’s behemoth opposition: Their lucrative version of tourism is based on a “family friendly” brand. The political viability of casino gambling may be determined less by popular will and more by the balance of power between moneyed interests in any given state. In New York, major business groups like the Partnership for New York City, the Committee to Save New York, the Business Council of New York State — and, now, decisively and after long-running opposition, magnate Mayor Michael Bloomberg — support the legislation. Meanwhile, racetrack owners in New York and other states are scrambling to obtain a monopoly on expanded gambling.

The expansion of casino gambling can engender fierce opposition. And it can make for strange political bedfellows too, as progressive social justice advocates and Christian anti-gambling moralists join forces. In Philadelphia, activists organized a diverse, if ultimately unsuccessful, citywide movement against SugarHouse. But other neighbors welcome the casino and the largess they deliver via “community benefit agreements” through which casinos pay for school books, libraries and programs for senior citizens and veterans. Functions that in the past were expected from government are now delivered by corporations under a halo of philanthropic beneficence.

The limits of casino capitalism are nowhere more evident than in the birthplace of legal gambling in America: Las Vegas. Wall Street investment fueled the rise of modern Las Vegas casinos. In the 1980s, Steve Wynn was the first casino magnate to fund the construction of a new casino through Wall Street-issued junk bonds, displacing the mafia as legalized gambling’s patron of first resort.  Wall Street also funded Las Vegas’ meteoric housing boom, which has ended in one of the country’s largest busts: housing prices in the city more than doubled between 2000 and 2006. When the bubble burst, Las Vegas spent 22 months as the nation’s foreclosure capital.

And so casino capitalism spreads relentlessly even after Las Vegas, the brightly lit neon dream of a post-industrial America, has come crashing down.

First, some context. The news broke last March that Adelson’s Las Vegas Sands Corp. is under federal investigation into whether it has complied with the Foreign Corrupt Practices Act. The act makes it illegal to bribe foreign officials to obtain business deals.

The investigation reportedly came about after a breach-of-contract lawsuit was filed by former Sands executive Steven Jacobs that floated the possibility of an FCPA violation by Sands:

Jacobs alleges, among other things, that Adelson wanted him to conduct secret investigations of the dealings of the Macau government officials to dig up dirt so they could be intimidated, and that Adelson wanted the corporation to continue using the services of a Macau attorney with a bad reputation “despite concerns that [the individual's] retention posed serious risk under the criminal provisions of the United States code commonly known as the Foreign Corrupt Practices Act.”

A confidential September 2009 cable sent from the U.S. consulate in Hong Kong back to Washington describes Adelson’s business practices in Macau. Unlike its competitor Wynn, Adelson’s Sands was lobbying Chinese government officials in Beijing rather than focusing exclusively on local officials in Macau, according to the cable. The issues of concern to Sands included “foreign labor visas, gaming oversight and regulation, infrastructure development, and perceived interference in personnel management decisions affecting Macau resident workers.”

The cable goes on to describe Adelson’s personal interest in direct engagement with Beijing and the intriguing matter of the “Adelson Center for U.S.-China Enterprise” in Beijing, a nonprofit that was to be financed with a whopping $100 million. A former Sands executive told an unnamed American official that the Chinese government forced Sands to close the center following government inquiries about “funds transfer mechanisms used by [Sands] to establish the now-closed USD 100 million Adelson Center.” The nature of those mechanisms is not specified.

The cable continues that Sands’ “current efforts in Beijing are designed in part to offset these early ‘missteps’” — but there is no elaboration on what the “missteps” were. Sands did not immediately respond to a request for comment.

As for what the Adelson Center was supposed to do, the New Yorker reported in June 2008 that it was to act as a kind of facilitator for U.S. businesses looking to operate in China:

In early August [2008], during the Olympic Games, Las Vegas Sands will launch the Adelson Center for U.S.-China Enterprise, in Beijing, which seems positioned to wield substantial influence. If you were an American businessman coming to China, the Sands’s Bill Weidner testified at the Suen trial, “you might need a logistics partner to deliver your goods. You might need a manufacturer to manufacture your goods. You might need a law firm. You might need an accounting firm. Whatever it would take to get you involved in business in China, we would-the center would help arrange for you.”

Here is the logo for the center from a filing with the U.S. Patent and Trademark Office; it’s not clear that it was ever used:

Below is the relevant section of the cable. Another interesting moment comes further down in the cable when Sands executive Jacobs (who later sued the company) is quoted as saying that a new regulation about how much Macau casino junket operators could be paid “will be routinely violated.”

LVS [Las Vegas Sands] Macau President and CEO Steve Jacobs told EP Chief  on September 17 that LVS restarted its government outreach  efforts in Beijing over the past several months, and achieved  “great success” in building direct relationships with senior  officials.  Jacobs said LVS’s direct engagement in Beijing is  designed to build goodwill, explain the company’s current and  planned contributions to Macau’s economy and society, and encourage freer movement of PRC residents into Macau.  LVS CEO and majority shareholder Sheldon Adelson highly values  direct engagement in Beijing, according to Jacobs, especially  given the impact of Beijing’s visa policies on the company’s  growing mass market operations in Macau.

LVS’s pre-Olympic outreach efforts were suspended in early 2009, after the PRC forced the company to close its  newly established non-profit Adelson Center for U.S.-China Enterprise in Beijing.  The PRC’s State Administration of Foreign Exchange in China, according to LVS’s latest quarterly report published in August 2009, “made inquiries and requested and obtained documents relating to certain payments made by the company’s wholly foreign-owned enterprises to counterparties and other vendors in China.” A  former LVS senior executive told Econoff that the PRC inquiries relate primarily to funds transfer mechanisms used by LVS to establish the now-closed USD 100 million Adelson Center.  LVS’s current efforts in Beijing are designed in part to offset these early “missteps.”

I believe in Las Vegas. I think its best days are ahead of it. But I’m afraid to do anything in the current political environment in the United States. You watch television and see what’s going on, on this debt ceiling issue. And what I consider to be a total lack of leadership from the President and nothing’s going to get fixed until the President himself steps up and wrangles both parties in Congress….

…And I’m saying it bluntly, that this administration is the greatest wet blanket to business, and progress and job creation in my lifetime. And I can prove it and I could spend the next 3 hours giving you examples of all of us in this market place that are frightened to death about all the new regulations, our healthcare costs escalate, regulations coming from left and right. A President that seems — that keeps using that word redistribution. Well, my customers and the companies that provide the vitality for the hospitality and restaurant industry, in the United States of America, they are frightened of this administration. And it makes you slow down and not invest your money. Everybody complains about how much money is on the side in America. You bet. And until we change the tempo and the conversation from Washington, it’s not going to change. And those of us who have business opportunities and the capital to do it are going to sit in fear of the President.

And a lot of people don’t want to say that. They’ll say, “Oh God, don’t be attacking Obama.” Well, this is Obama’s deal, and it’s Obama that’s responsible for this fear in America. The guy keeps making speeches about redistribution, and maybe we ought to do something to businesses that don’t invest or holding too much money. We haven’t heard that kind of talk except from pure socialists. Everybody’s afraid of the government, and there’s no need to soft peddling it, it’s the truth. It is the truth. And that’s true of Democratic businessman and Republican businessman, and I am a Democratic businessman and I support Harry Reid. I support Democrats and Republicans. And I’m telling you that the business community in this company is frightened to death of the weird political philosophy of the President of the United States. And until he’s gone, everybody’s going to be sitting on their thumbs.

Redistribution? What Obama has proposed is a return to Clinton-era levels of taxation on the wealthiest Americans. That would presumably cost Wynn some money — according to Forbes.com, Wynn is the 512th richest American, with a net worth of $2.3 billion. If we want to talk redistribution, what we’ve seen over the last three decades has been a remarkable redistribution of wealth from the lower and middle class to people like Wynn. With federal taxes, measured as a percentage of GDP, at 60-year lows, is it really all that “socialist” to recommend a return to the tax rates of the go-go ’90s? A period, incidentally, in which Wynn made an awful lot of money.

As for the debt ceiling — if Wynn has any suggestions for how Obama might be able to “wrangle” House Republicans, I’m sure he’d be all ears. But since it’s pretty clear that House Republican leaders can’t even control their own caucus, it is rather difficult to see how Obama can bend them to his will.

It must be frustrating to be a casino and resort operator in Nevada. The state has suffered terribly from the double whammy of the housing meltdown and the collapse in leisure spending that accompanied the worst recession in 70 years. When you’ve lost your house and your job, a weekend of gambling and high living in Las Vegas isn’t quite as attractive anymore. My guess is that Wynn’s unwillingness to plow cash into new resort developments has much more to do with a lack of consumer demand than with ObamaCare or Dodd-Frank, or anything else that the president has even tangentially been involved with.

Luckily for Wynn, he doesn’t have to depend on Nevada to make a buck. Wynn Resorts is a major player in Macau, where profits are generated by sucking in cash from Chinese gamblers. And just listen to what Wynn has to say about China!

September will be our fifth anniversary in the People’s Republic of China in Macau, and we love it there. We are so grateful to be part of that market and to be allowed to participate in that community. We find the political environment, the regulatory environment, the human resource environment that we’re in to be absolutely delicious. Life is quite straightforward in China. The government is predictable. Our employees are eminently trainable. They’re anxious to please. They have a fabulous attitude, whether they’re local Macau people, mainland Chinese people, folks from the Philippines, they’re just wonderful and all of that’s come together to help us deliver the kind of product that we’ve always been delivering.

Anxious-to-please workers! Is there a little resentment to be sensed here at the power of unions in Nevada — one of the few remaining regions in the United States where organized labor still has some clout? And how about that “absolutely delicious” political environment! I wonder how many of the right-wing blogs that are passing around Wynn’s “epic Obama rant” would even be allowed to operate in China? It’s just so easy, after all, to be straightforward when you have totalitarian political control — no annoying independent unions or opposition parties that need to be “wrangled.” The Chinese Communist Party would know exactly what to do with the Tea Party.

Steve, chill out. Remember what you told Charlie Rose when you acknowledged that you had a problem with your “explosive temper”?

 He got to this state of self awareness with the help of a friend, the Dalai Lama. “He says to me, ‘I’ll do an imitation, When you get angry, when you lose your temper, when you think that you shout and react in a poor way to other people, it is a result of a false sense of yourself, an inflated sense of yourself that is worthless,’” Wynn said.

Exactly. 

But there are lots of ways in which my gambling affected me for the worse during my six years in Seattle and more recently in Las Vegas: I’ve left bills unpaid, sometimes for weeks, months, or years. I’ve borrowed incessantly, both to raise poker funds and to pay bills.

Several times when the losses mounted and funds were especially tight, I’ve survived for days on end on boxes of store-brand mac and cheese, ramen noodles, saltines, and seltzer water.

Perhaps worst of all, I’ve been missing out on some basic human connections. Because of the thousands of hours I’ve spent playing poker, I’ve let some friendships and family relationships wither. And I’ve dated and pursued serious girlfriends less energetically than I used to. Some of that might be a function of middle age. But much of it, without doubt, has been due to poker.

I don’t know what my gambling future holds. It’s my hope that I’ll be able to find a way to reinvigorate my life through reduced time at the poker tables. (This might be easier now, given that I recently moved from Las Vegas to Washington, DC.) Quitting for good is one option and is something I recognize may ultimately be the answer. Another option is to do nothing, to continue to play regularly, no matter where I live. After all, it’s becoming more and more difficult to find a region of the country not within easy driving distance from a legal poker room.

I’m currently leaning toward a third option, one espoused by two writers who each released gambling memoirs in the last few years, Martha Frankel and Burt Dragin. Both had developed serious gambling problems — Frankel through Internet poker and Dragin through regular trips to casinos. Neither ended up permanently in recovery. Instead, both say their answer has been to limit their gambling to a weekly poker game with friends and reasonable stakes.

“(T)his game is social and relaxing, not compulsive and fearful,” wrote Frankel, a celebrity profiler for magazines, in her 2008 book “Hats & Eyeglasses: A Family Love Affair with Gambling.” “It reminds me of the fun that I had when I first started playing, and how much I love poker. And it shows me that I’m no longer out of control, fighting a dragon I could never slay.”

Maybe this kind of solution could work for me, with a trip or two to Vegas every year tacked on for good measure. Maybe it’s pie-in-the-sky thinking. I don’t yet know.

It’s not easy to write these things. There’s a certain shame attached to confessing a gambling addiction in our culture, even more so than copping to being an alcoholic or a cocaine addict. Many still believe that people gamble excessively because of a lack of willpower or because they’re simply immoral. These antiquated beliefs are beginning to fade, as doctors, scientists, and researchers are increasingly concluding that pathological gambling is a behavioral addiction that affects the brain in much the same way as substance dependencies. I share this notion.

Since the 1970s, legalized gambling has grabbed hold of the country’s consciousness. It’s rooted itself in scores of cities and small towns in every region, including many that never before have had to deal directly with the fallout.

Indian tribes have renegotiated compacts in more than two dozen states to allow for new casinos. State governments have joined in, bringing private casinos, card rooms, and video poker and slot machines by the tens of thousands into their jurisdictions.

The national poker craze has proved amazingly durable. Forty-three states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands each sponsor heavily promoted lotteries.

In 2007, Americans lost more than $92 billion gambling — about nine times what they lost in 1982. To put that amount into perspective, it’s almost ten times what moviegoers in the United States spent on tickets during the same year.

In 2005, 73 million Americans were estimated to have patronized one of the country’s twelve hundred casinos, card rooms, or bingo parlors — twenty million more than just five years earlier.

Thirty-five years ago, casinos were legal in one state, Nevada. As of 2010, various forms of gambling have been legalized everywhere in the United States except Utah and Hawaii.

The total amount wagered legally in the United States is “undoubtedly” well over a trillion dollars per year, one of the nation’s leading gambling experts, I. Nelson Rose, concluded in 2010.

Because of this growth, millions of Americans have for the first time been directly exposed to gambling. As a result, there’s been a significant increase in the number of addicted gamblers around the country. There is a fairly obvious proposition at work here: in communities where legalized gambling has been introduced, new problem and pathological gamblers have been forged.

According to experts, gambling becomes a problem when it disrupts or damages personal lives or careers. Problem gamblers often devolve into pathological gamblers when the gambler loses control over her betting; when she gambles more often or for larger amounts; and perhaps most importantly, when she continues to gamble despite adverse consequences.

Those consequences are felt not just by the gamblers. They ripple outward to family and friends, employers and whole communities. They run the gamut from decreased work productivity and increased physical and mental health problems to rises in divorces and various types of crimes, from theft and embezzlement to domestic violence and child abuse. Studies have also shown that pathological gambling has caused an increase in bankruptcy filings and claims for unemployment and welfare benefits, and in the worst cases, suicides.

The gambling industry argues that in the long run, problem gambling rates in some communities where gambling has been introduced have stayed about the same or have even decreased slightly. In certain cases this may be true, as some who initially develop problems because of the new availability of gambling subsequently undergo what researchers call an “adaptation” effect. Though problem gambling rates almost always spike immediately after the introduction of legalized gambling, sometimes they slowly drop back to where they were. But this misses several important points. In the worst cases, many gamblers “adapt” by going to jail or committing suicide. Regardless, even in communities where adaptation may have occurred, it’s always the case that an initial spike in problem gambling rates means a greater number of injured lives, temporary or not. Finally, many researchers discount the adaptation thesis, concluding that legalizing gambling, especially slot machines, results in problem gambling rates that, over time, in fact remain higher than they were.

The most noteworthy research conducted over the last couple of decades concludes that the unremitting expansion of legalized gambling has helped turn great numbers of Americans into problem and pathological gamblers.

To wit:

A comprehensive “meta-analysis” of one hundred and twenty gambling prevalence research studies, which looked at gambling behavior in the United States and Canada between 1974 and 1997, concluded that there had been a dramatic rise in the adult problem and pathological gambling rates over that time. While the studies conducted from 1977 to 1993 determined that at some point over their lifetimes, 4.38 percent of the two countries’ general populations had become problem or pathological gamblers, the 1994 to 1997 studies showed a sharp hike in the percentage of “lifetime” problem or pathological gamblers — more than 2 percent, to nearly 7 percent. That’s a jump of more than 4.3 million people — roughly equivalent to the entire populations of states such as Kentucky or Louisiana.

“As gambling has become more socially accepted and accessible during the past two decades,” adults in the general population have “started to gamble in increasing numbers,” the study concluded. It was led by Howard Shaffer, the gambling industry-funded researcher who later helped develop the adaptation theory. “Newly exposed to the gambling experience, adults in the general population are having difficulty adjusting and, unlike the other population segments who already evidence gambling problems, are beginning to report increasingly higher rates of gambling disorder.”

Other prominent studies back up this notion. The gambling behavior survey carried out for the National Gambling Impact Study Commission, for example, determined that those who lived within fifty miles of a casino were more than twice as likely to develop significant problems as those who lived between fifty and two hundred and fifty miles from the establishment.

And look at the rates of both problem and pathological gambling in Nevada — by far the most extensive legalized gambling market in the United States. The most complete prevalence survey ever taken in Nevada, published in 2002, showed that the incidence of problem and pathological gambling in Nevada was exponentially higher than in the United States as a whole.

The study concluded that 2.9 percent of the state’s adult population were problem gamblers, and that another 3.5 percent were “probable” pathological gamblers — for a whopping total of 6.4 percent of the population. Assuming that those rates have remained the same, given Nevada’s 2010 population, that amounts to more than one hundred and fifteen thousand adults.

Spend any time in Las Vegas and it’s easy to conclude that those numbers, if anything, are an understatement. The number of pawn shops and payday loan stores that mark virtually every neighborhood — places for often-desperate problem gamblers to replenish their gambling bankrolls — is astonishing. As a resident, you can’t escape gambling. Not only have “locals casinos” sprouted up in every corner of the Las Vegas Valley, not only are casino promotions plastered on countless billboards throughout the region and on TV and radio advertisements, it’s nearly impossible to grab a drink at a neighborhood bar or even shop for groceries or buy gasoline without passing by banks of slots and video poker machines.

What’s more, it’s clear that as the number and range of legalized gambling opportunities have grown throughout Las Vegas — and the country — and as a rising number of gamblers have suffered serious consequences, more and more have turned to Gamblers Anonymous, or GA, for help. In the Las Vegas metro area, about 100 GA chapters meet weekly, a higher number than anywhere else in the country.

Over a recent ten-year period, GA — a twelve-step support program modeled after Alcoholics Anonymous — grew dramatically nationally, too. From 1996 to 2005, the number of weekly GA meetings nationwide rose by almost 50 percent, from 1,073 to 1,584.

Yet the newly addicted gamblers and all those they impact aren’t the only victims. States and other municipalities have also increasingly been suffering some pretty severe gambling hangovers. Governors, state legislators, and mayors all around the country have become hooked on gambling revenue, coveting the easy ways the steady stream of government gambling winnings have shored up budget deficits, paid for education programs, and reduced property and income taxes.

Gambling revenues have become critical income streams for more than a few state governments. According to a 2005 report released by researchers at the University of Nevada, Las Vegas, in four states — Louisiana, Nevada, Oregon, and South Dakota — taxes from casinos, slot machines, video poker terminals, racetracks, and states lotteries made up more than 10 percent of overall revenues. In six other states, gambling brought in more than 6 percent of overall revenues. And those numbers were rising.

State leaders don’t relinquish these income streams easily. And in many recession-wracked states currently burdened with unprecedented budget gaps, officials are clamoring for more gambling. In 2009 and 2010, officials in at least thirty-seven states — three out of four — pushed for new or expanded gambling. The evidence is clear that the gambling industry and their politician partners are gearing up for more battles than ever.

As these debates are being hashed out all over the country, a variety of other important gambling trends in the United States also have manifested themselves.

The poker explosion, assumed by many to be little more than a pop-culture fad when in first took root in 2003, has maintained its hold on the American public.

Internet gambling drew millions of Americans to their computer screens in the years before the federal government in 2011 effectively shut down the top sites — a setback the gambling sites and their political allies are working hard to overturn.

Asian-Americans, often lured to casinos by persistent industry marketing, are both gambling and becoming addicted at rates sufficiently high that researchers are devoting more effort than ever into studying the phenomenon. Asian community activists are also now taking more serious note. “This marketing goes beyond targeting and into predatory practices,” Helen Gym, a Philadelphia-based activist, told me last year. “We consider it to be a devastating thing.”

Gambling addiction science is in the midst of a revolution. Scientists are concluding in greater numbers that pathological gambling is a true addiction. Long classified as an “impulse control disorder” — closer to kleptomania or pyromania than to alcoholism — leading psychiatrists and addiction researchers are set soon to change their definition. In its 2013 Diagnostic and Statistical Manual of Mental Disorders, called the DSM-V, the American Psychiatric Association is preparing to reclassify pathological gambling as a “behavioral addiction” more akin neurologically to alcohol and drug addictions than, say, to compulsive shoplifting. No other behavior has ever been classified as an addiction by the psychiatric group.

Finally, as these changes are in the works, more attention is being paid to industry influence in gambling addiction research.

A charity affiliated with the powerful American Gaming Association, the commercial casino industry’s Washington, DC-based trade group, funds the majority of the problem gambling research conducted in the United States, many gambling researchers contend. This is prompting growing concerns among critics, who assert that the industry is attempting to buy research legitimacy and conclusions that suit its purposes — that gambling is less addictive than many believe; that problem gamblers don’t provide the industry with the high percentage of revenues that numerous independent studies have suggested; that pathological gamblers frequently have addictive “personalities,” implying that the industry should in no way be held to blame for their gambling addiction.

I don’t mean to propose that legalized gambling is responsible for every social ill befalling America. Far from it. And gambling businesses do provide jobs — something that can’t be scoffed at, especially in our bottomed-out economy.

Not to mention, a significant majority of those who visit their nearby racino or card room or video poker bar with friends once or twice a month, or who buy the occasional lottery ticket with dreams of striking it rich, do so without developing negative side effects. They don’t gamble because they’re addicted. They simply get a kick out of it, and they’re glad the state has provided them with the entertainment option.

Yet the gambling boom has had myriad consequences — costs that have grown right alongside the industry’s growth.

In the end, voters in more and more states are being asked to weigh whether to grant gambling a place in their communities and possibly their lives.

Increases in state-sanctioned gambling aren’t just drawing folks who have been gambling illegally, concludes Robert Ward, deputy director of the Nelson A. Rockefeller Institute of Government.

“In other words,” said Ward, “the states almost certainly are creating new gamblers—and a certain number of those folks are finding out first-hand what addiction is all about.”

Sam Skolnik has been in the journalism business for more than 20 years, including reporting stints with the Seattle Post-Intelligencer and the Las Vegas Sun. He’s currently based in Washington, D.C., as deputy editor of the National Law Journal. 

Adapted from “High Stakes: The Rising Cost of America’s Gambling Addiction” (Beacon Press, 2011). Reprinted with permission from Beacon Press.

I noticed a curious thing about gamblers from an early age: Daddy didn’t get excited when he won at the track. No, the adrenaline would be flowing, the monologue would be deafening and he’d come roaring into the house, pacing up and down and yelling — when he’d almost won. And he’d be cursing when he lost.

So when he was quiet, I figured he’d won some money. He wasn’t often quiet.

The closest conversations I can remember with Daddy were at dinnertime, when he’d offer a nickel to my sister, my brother or me — whichever of us gave the best report of our school day. We competed for the 5 cents until we realized it wasn’t worth it unless he upped the payoff to a dime.

We lived in rented apartments and bungalows until one year when Daddy must have bet big on long shots in the daily double and we moved to a half-block-long, marble-floored art moderne mansion with a buzzer in the floor of the dining room to call “the Help.” The following year we were poor again, and Daddy would go into my wallet to borrow my allowance. He always said he’d pay me back, but he never did.

Our parents weren’t officially separated — almost no couples were in those days — and yet half the year they lived apart. From April to September, he holed up in a seedy Boston hotel called the Touraine where the elevator was manned by a one-legged operator. It was near the dog track at Revere.

But we didn’t see all that much of Daddy even while he was home in Miami Beach, and my brother and sister and I thought his leaving was as natural as the hurricanes that arrived in his absence.

Mom seemed happier when he left, which confused the hell out of my childhood self, who believed in sitcom family units where daddies wore suits to dinner and moms served apple pie in gingham aprons, not families where Daddy went off to work at the race track and stayed away for six months, and called to wish his daughter a happy birthday, on the wrong day, and asked, “How old are you now, Lea?” At least he got my name straight.

It did come in handy on occasion, though. After my grandfather taught me to read at 2 years old, my dad was not only proud, he figured out a way to capitalize on his “smartypants daughter.” He would use me as a shill.

So we would walk around where the tourists would hang out in South Beach. If he found someone reading the Racing Form, Daddy would say, “I’ll take out my Racing Form and you can point to something and my baby daughter will read it.”

Then the gamblers would figure he had prepped me to learn from the paper he held. They must have thought that I could memorize, but I was too young to read, and they were on to something and could make some money.

“OK,” some would say, “I’ll bet you she won’t read — and I get to choose from my form.” But I usually could read whatever they put in front of me. Often it was the name of horses, and Daddy would prep me as a game: “Murray’s Desire.” “Long Boat Key.” “Blue Dame.”

“She’s a midget,” they’d grumble, forking over a Benjamin.

Mom divorced Daddy when I was in my 20s, and for a while he lived in a small apartment by the dog track. She remarried him a year later.

Not long before his death at the age of 83, we were watching a “60 Minutes” segment together about gambling addiction. Daddy was long “retired,” but still visited the track during the day, and often gambled away his Social Security check.

After the TV segment, my dad turned to me. This was his chance to show me, finally, that he had learned something about his lifetime of ruined potential and broken relationships. A chance to say he was sorry to the daughter whom he had involved in his gambling since she was a toddler, the neglected daughter whose age he still did not know, and who very well could have been named for Hialeah Race Track.

Daddy looked at me with resignation and shame. It took him a long time to get the words out.

“That wasn’t easy to watch,” he said.

I was ready for his late epiphany, and a chance for some closure for both of us.

“It’s really too bad,” he said, staring at me with the sad look of an old man. “I mean, I know addicted gamblers like that.”

How could I possibly have understood my father when he never could understand himself?