Coming soon: online gambling

February 18, 2013 9:21 am

The current spread of casinos across many states is bad enough. Just wait until states start pushing online gambling. This is the next big wave in gambling expansion, as The New York Times details here. (Sadly, the Times story fails to point out the downsides of online gambling and only makes a glancing reference to opposition.)

Just consider that many gamblers already visit local casinos an average of three to five times a week, or more than 250 times a year. Many spend hours at the casinos. So just wait until folks can gamble whenever and wherever they want, via their iPads, laptops and mobile phones. That’s when gambling addiction will explode into the mainstream, especially among younger people and even teens.

It will aslo push gambling problems into the middle and upper classes. Those two groups largely eschew casinos, which are populated mostly by poor, elderly, working class and minority residents. But online gambling will likely attract college students and other younger gamblers who already spend hours online.

Facebook, MySpace and other online operators are already laying the foundation for online gambling. Other tech operators are also poised to jump in, backed by hedge funds and Wall Street.

Years from now when reporters and historians go back to examine what went wrong, they will find the federal government is to blame. Just before Christmas 2011, the Justice Department quietly reversed itself and released a legal opinion lifting its longstanding ban in Internet gambling. The opinion was written in September but the Justice Department waited until Christmas to release it. The move opened the door for the virtual casinos coming soon to every house and mobile phone.

A former mayor’s $1 billion gambling problem

February 15, 2013 9:52 am

The former mayor of San Diego wagered more than $1 billion at casinos over the last decade, forcing her to liquidate her savings, sell off real estate, auction belongings, borrow from friends and take more than $2 million from a charity set up by her late husband, according to The New York Times.

Maureen O’Connor, 66, made repeated visits to casinos in Las Vegas, Atlantic City and San Diego. Her wagers totaled more than $1 billion but her actual losses were $13 million. Even still, her gambling addiction amounted to wagering an average of $300,000 a day, every day, for nine years. O’Connor’s game of choice was video poker, a highly addictive gambling game and one of the more lucrative games. 

Friends were shocked by O’Connor’s gambling addiction. She didn’t drink and as mayor was described by a reporter as a “goodie two shoes.” O’Connor blamed her addiction on depression from the loss of her husband and later a brain tumor. Her addiction fits a pattern known as “grief gambling.” Indeed, many slots addicts tend to be widows.

O’Connor’s story underscores the addictive hold gambling can have on individuals. It also underscores how little casinos do to try to stop addicts. It is virtually impossible to imagine the casinos were not aware O’Connor was spending an average of $300,000 a day for nine years. In fact, casinos target problem gamblers. The casinos likely teated O’Connor like a VIP, offering her a variety of incentives, including free rooms and meals, to keep coming back and to stay for hours on end.

Indeed, casinos make a large percentage of their profits from repeat and problem gamblers. One study found as much as 62 percent of a casino’s slot machine revenue comes from problem gamblers. Studies also show that the closer a casino is to someone’s home the more at risk they are of developing a gambling problem. That’s what makes the spread of convenience casinos in many states and small towns all the more troubling.

Most elected officials and casino supporters ignore or deny the fact that a casino’s business model is essentially built on problem gamblers. Then again most elected officials and casino operators don’t gamble. They know it is a sucker’s game. But now the former mayor of San Diego has been ensnared in the predatory gambling venture that is being enabled and pushed by many other mayors and governors.