A national commission that spent the last two years studying the explosive growth of legalized gambling in the country issued its final report yesterday, delivering the mixed message that gambling has provided economic benefits to some but may also have produced economic and social problems of unknown dimensions.
The report by the National Gambling Impact Study Commission, which pleased both casino executives and gambling critics, called for a "pause" in the spread of legalized gambling while more is learned about its consequences and was particularly critical of the growth of so-called "convenience gambling" in neighborhood locations, which it said should be halted and rolled back.
The nine-member commission that was appointed by President Clinton and the bipartisan congressional leadership also called for a nationwide minimum age of 21 for legal gambling, a ban on campaign contributions from gambling interests to state and local candidates, and curtailed lottery advertising by state governments, especially ads targeting low-income citizens.
The panel, whose recommendations are not binding, also proposed that states and tribal governments enact a "gambling privilege tax" to fund programs dealing with problem gambling, and that Congress enact a ban on Internet gambling.
The report said that Americans lost $50 billion in gambling last year and that "there is no end in sight" to the growth of gambling.
Contending that this growth has been driven by "reactive" decisions by government officials who are hungry for revenue but reluctant to raise taxes, the commission said a pause in gambling expansion would allow officials "to survey the results of their decisions and to determine if they have chosen wisely."
"Without a pause and reflection, the future does indeed look worrisome," the commission said. "Were one to use the experience of the last quarter century to predict the evolution of gambling over the next, a likely scenario would be for gambling to continue to become more and more common, ultimately omnipresent in our lives and those of our children, with consequences no one can profess to know."
The casino gambling industry, which once feared that the commission would recommend federal regulation and taxation of its business, emerged virtually unscathed from the $5 million study. The industry's chief Washington lobbyist, Frank J. Fahrenkopf Jr., president of the American Gaming Association, said: "I don't like some of the rhetoric, but I think the commission did a good job and that the casino industry came out of this report looking very good."
Fahrenkopf said his organization objected to only two of the commission's 76 proposals: a ban on contributions to state and local politicians, which he said would unfairly exclude the industry from the political process, and a call for an end to legal betting on collegiate and amateur sports. Only Nevada and Oregon allow sports betting, including on college events.
In two recommendations certain to cheer casino executives, the commission said that state and local officials should recognize that casino gambling "has demonstrated the ability to generate economic development through the creation of quality jobs," but that the same was not true of state lotteries, Internet gambling and video gambling devices in gas stations, convenience stores and other neighborhood locations.
Gambling critics said they, too, were pleased with the commission's report. The commission's findings "will act like the surgeon general's 1964 report on smoking and health--a wake-up call for America on the dangers of gambling," said Tom Grey, executive director of the National Coalition Against Legalized Gambling.
He said that in 2000 his organization will focus on the passage of state ballot measures to curtail convenience gambling. "Are we in a better attack position today? I say, yes," Grey said.
In the report, commission members expressed a certain ambivalence toward the subject of their study. They said gambling's positive economic impact was easy to identify, including the transformation of "sleepy backwaters" into thriving communities, the end of chronic poverty on Indian reservations where casinos have been established and the phenomenal growth of Las Vegas, still the nation's preeminent gambling mecca.
But they said there was also "a different tale of lives and families devastated by problem gambling, of walled-off oases of prosperity surrounded by blighted communities, of a massive transfer of money from the poor to the well-off, of a Puritan work ethic giving way to a pursuit of easy money."
In its makeup, the commission was divided between gambling's supporters and critics, virtually ensuring it would reach no sweeping conclusions. At a news conference yesterday, members said they agreed on the final report but continued to voice differences.
"I am even more convinced now that gambling is a destroyer," said James C. Dobson, president of the conservative Christian organization Focus on the Family.
But John W. Wilhelm, general president of the Hotel Employees and Restaurant Employees International Union, said critics have "a moral obligation" to propose alternatives that would produce as many jobs as gambling has created.
Richard C. Leone, president of the Century Foundation, took aim at government officials who profess disapproval of gambling but use it to generate revenue rather than raise taxes. "The hypocrites on gambling are the governors, the state legislators, the members of Congress who say 'personally I'm against gambling but we need Powerball,' " he said.
Reflecting the commission's overall ambivalence, Leo T. McCarthy, a former Democratic lieutenant governor of California, said there was a clear "upside" to the spread of gambling, including the benefits reaped by some Indian tribes and the growth in well-paying, mostly union jobs. But noting that a survey commissioned by the panel had identified more than 15 million pathological or problem gamblers in the country, McCarthy said, "That 15.4 million number sticks in my mind. That's a fairly heavy price to pay."
CAPTION: National Gambling Impact Study Commission members Richard C. Leone, left, and Paul Moore confer with Kay Cole James, chairwoman of the panel.