By William Thompson, Ph.D., Ricardo Gazel, Dan Rickman
Gambling win or lose took my emotions. I don’t want to feel miserable anymore.
member of a Gamblers Anonymous group in Wisconsin
This is a study about social costs of gambling in Wisconsin. In April 1995, the Wisconsin Policy Research Institute released a report entitled The Economic Impact of Native American Gaming in Wisconsin (Thompson, Gazel, and Rickman, 1995). In that report, we analyzed data on flows of money into and out of the 17 casinos and assessed how those flows affected the economy of the state of Wisconsin as a whole and also how they affected the economies of the local areas surrounding the casino sites. We also estimated the social costs attached to the incidence of problem gambling that may have resulted because of the presence of casinos in the state.
We found that the state of Wisconsin experienced an annual economic gain of $326.72 million from gambling activities and related expenditures of gamblers at or near the 17 casino sites. However, a moderate estimated annual social cost of $13,000 per compulsive gambler, with a 0.7% gain in compulsive gamblers due to the presence of the casinos, reduced the state’s economic gain from casinos to $5.80 million. The local areas (within 30 miles) around the casinos experienced collective economic gains of $404.41 million, which were reduced to $272.84 million when medium social costs were calculated and subtracted.
The estimates of social costs utilized for the 1995 study were based upon the results of studies of gambling in other jurisdictions. In this report, we seek to refine those previous estimates by analyzing data on problem gambling in Wisconsin. We prepared questions utilized in a random survey of 1,000 Wisconsin residents in late 1995. We also prepared a survey that was administered to members of Gamblers Anonymous (GA) groups in the state. Ninety-eight responses were analyzed in order to estimate various societal costs of problem gambling. Additionally, we examined information given us by coordinators of the GA groups and by the Wisconsin Council on Problem Gambling (WCPG) regarding calls to an “800” help-line number.
In Section I, we consider the importance of the results we are seeking to find, while in Section II, we examine the nature of compulsive gambling and research directed at determining its cause. Section III looks at previous efforts to determine the extent of compulsive gambling in societies, while Section IV is devoted to determining how many compulsive gamblers there are in Wisconsin and how many of these problem cases may be due to the presence of casinos in the state. In Section V, we present our strategy for determining such costs for Wisconsin. The results are summarized in Section VI, and suggestions for state policies which might mitigate or even eliminate many of the social costs of gambling in Wisconsin are presented in the final section of the report.
