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Conn. Problem Gambling Summit Held

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NORWICH, Conn. - Top executives from the leading gaming enterprises in Connecticut met March 11 to promote awareness of problem gambling and quickly concluded that the biggest addict was state government.

The evening panel highlighted a week of events sponsored by the Connecticut Council on Problem Gambling. It brought together a veritable summit conference of senior people from the two tribal casinos, off-track betting and the state lottery and the director of the state's Division of Special Revenue, which collects their money.

The senior status of the panelists signaled that the gaming industry in the state, and elsewhere, acknowledged that the small proportion of customers who become pathologically obsessed constituted a negative consequence that the industry should help to alleviate. According to the host Marvin Steinberg, executive director of the Connecticut Council on Problem Gambling, some 5 percent of adults showed "a propensity" to problem gambling and the rate of the actual compulsive behavior doubled within 50 miles of a casino. But the industry speakers emphasized that the benefit they provided to their largest client, the state tax collector, far outweighed the social costs.

Sounding the common theme, James Vance, president of the Connecticut Lottery Corporation, said the state-run array of bi-weekly drawings and scratch-off tickets had generated sales of $865 million in fiscal year 2003, contributing $270 million to the state's General Fund. (The instant game scratch-off sales accounted for by far the largest amount, more than $530 million.)

John Ponzio, president of Autotote Enterprises in New Haven, Conn., represented the new technology for long-distance betting on thoroughbred, harness and greyhound racing and jai alai, the growth center in a field of gaming that likes to portray itself as in decline. (Autotote is a division of Scientific Games.) In Connecticut, it serves eight simulcast centers and a network of off-track betting parlors that grossed nearly $280 million in 2003 and contributed $5.8 million to the state.

The two tribal facilities, the Mashantucket Pequot's Foxwoods Casino Resort and the Mohegan Sun, have a separate arrangement that pays 25 percent of the net slot machine take into the Pequot Fund, distributed by the General Assembly to the state budget and to the state's cities and towns. (States are forbidden to tax tribal casinos by the federal Indian Gaming Regulatory Act, and these payments are technically payments for the casinos' exclusive right to offer slot machines.) With roughly equal total handles, the two casinos contributed more than $387 million in fiscal year 2003.

Ponzio observed that this half-billion dollars in revenue otherwise "would have to come from the sales tax or the income tax."

Connecticut, moreover, is just part of a growing national dependency on gaming revenues. According to the American Gaming Association, which represents the non-Indian gaming industry, commercial casinos paid $4 billion in taxes in 2002. Lotteries, all state-run, generated $18.638 billion. Only two states allowed no gaming whatsoever - Utah and Hawaii.

With this revenue in the balance, it seemed unlikely that the social costs of problem gambling would provoke any serious movement to outlaw the gaming industry, regardless of the rhetoric of the state's anti-casino politicians. The panelists let it be known they were a more reliable source of funding than the state government. Several speakers alluded to Gov. John Rowland's successful attempt to overturn a law requiring state-funded studies of problem gambling every five years.

Vance, of the state lottery, said that his corporation had contributed $1.2 million to the state Department of Mental Health Addictive Services program for gambling. It also invested heavily, he said, in "signage" advertising a help line and the state treatment programs. The law, he said, required these notices by each of the state's 2,800 retail lottery stations.

One issue did emerge. Steinberg differed politely but clearly with the casino executives on a question from the audience about banning ATM terminals from the gaming floor. Ponzio said gaming was a "customer service" business; "Customers need access to their money. ATMs are a very accepted way of getting cash."

Steinberg replied that players at slot machines often report they are in a "dissociative state." He said, "In my field we feel it's good for a person to take a little walk to decide if they want to spend more, 50 feet anyway."

Panelists equivocated a bit when asked if the state could "sustain another casino." William Velardo, president and general manager of the Mohegan Sun casino, called it "too normative a question." He said the answer would depend on the location, the type of product and the "interpretation of the market situation." He did allow, however, "you could argue there was probably still potential for expansion."

Speaking as a person who grew up in Las Vegas, Velardo warned, however, against relying exclusively on a casino to revitalize a stagnant city. "It should be part of a master plan," he said. Several speakers invoked the early experience of Atlantic City, where the advent of casinos failed to improve blight just blocks from the boardwalk. They said the industry had learned not to repeat that situation.

The session gave mainly an anecdotal and survey-based portrait of the problem gambler, touching very lightly on the hard scientific research on brain structures and chemistry now under way at places like Yale University. Steinberg did say that compulsive betting did overlap other types of addictions. "Twenty-five percent of compulsive gamblers also had a drinking problem," he said.

But one insight into the largest addict came from Daniel Marchitello, deputy executive director of Connecticut's Division of Special Revenue. When asked if the lottery supported a specific scholarship program, he replied that all of the gaming tax revenue went into the state's General Fund. "In politics we refer to it as the Black Hole," he said.