A strong economy is essential for U.S. national security. The economic downturn caused by the 2020 COVID-19 pandemic has again highlighted this basic economic principle.
In the context of legalized gambling, Nobel-Prize Laureate Paul Samuelson emphasized that gambling creates “no new money or goods”1 and “subtracts from the national income.”2 The economic multiplier effect of “consumer dollars” is negated or otherwise substantially diminished when consumer dollars are diverted into gambling dollars.3
Therefore, the $2.2 trillion economic stimulus of the 2020 Coronavirus Aid, Relief, and Economic Stimulus Act (CARES Act)4 wasted billions of dollars of the $260 billion allocated for unemployment benefits and the $300 billion allocated in payments to U.S. citizens.5 Intended to put food and other necessities of life in consumer pantries, billions of CARES Act dollars were instead misdirected into lotteries—creating record lottery sales, for example, in Georgia and Texas during the first 30 days of the CARES Act.6
While shutting down productive consumer businesses, governors declared lotteries to be “essential”7—although historically states were receiving only 27 cents per gambled dollar.8 More importantly, U.S. lotteries take $85 billion out of the U.S. consumer economy each year (with only $23 billion going to state budgets).9
Accordingly, the cheapest and most effective way to pump-prime the consumer economy would be to shut down the lotteries. This $85 billion would thereby morph into a consumer economic multiplier resulting in approximately $255 billion in new economic spending on consumer goods (or over $1 trillion in 4 years).10
In his 1999 Martin Luther King Day speech in Chicago, Jesse Jackson emphasized that “[t]he new chains of slavery happen to be . . . lottery tickets.”11 Later in 1999, the state lotteries were savaged by the congressional U.S. National Gambling Impact Study Commission, in its Final Report (“NGISC Final Report”).12Academically, it is well-established that lotteries make “poor people poorer”13 and target-market to minorities14 contributing to gambling addiction rates of: African Americans (2–4%); Native Americans (2–6%), Hispanics (2–3%), and Caucasians (1.2–2%).15
As reported in the Wall Street Journal, these social and economic concerns prompted Mr. Les Bernal, the national director of the charity Stop Predatory Gambling (“SPG”), to write to all U.S. governors and state attorneys general detailing the need to close the state lotteries.16
The 2020 movie Money Machine,17 however, documented the power of the gambling lobby in suppressing adverse facts. While Columbine and Sandy Hook remain in the psyche of the U.S. public, Money Machine details how the October 1, 2017 Las Vegas killings have been sanitized18 via “a web of corruption and cover-ups that make the Vegas of yesteryear, when it was still run by the mob, seem positively quaint.”19 The biggest mass murderer in U.S. history, Stephen Paddock, killed 59 people including himself and injured 413 by gunfire.20 It would be difficult to argue that Paddock did not satisfy the American Psychiatric Association’s criteria for being an addicted or problem gambler.21
All of these facts and trends are well-known to the gambling industry, whose business model has morphed toward abandoning brick and mortar gambling facilities in favor of widespread internet gambling—utilizing sports gambling to build pressure on government decision-makers. Gambling lobbyists are looking to leverage the COVID pandemic and the public’s natural affinity for sports into real-time 24/7 gambling on cell phones and throughout video games.22 In the age of COVID, bans on sports gambling and lotteries would inexpensively and effectively pump-prime the U.S. economic system with billions of dollars in consumer dollars—without CARES-type loans being incurred by the U.S. Treasury.
a. Prof. Em., Univ. Illinois; A.B. 1972, William & Mary; J.D. 1976, MBA 1977, Univ. Ga.; LL.M. 1978, SJD 1981, Univ. Va. Professor Kindt is still research active and teaching at the University of Illinois. Before the COVID pandemic caused cancelations, the papers in this symposium were scheduled to be presented by academic panelists at a conference co-sponsored by the University of Illinois Economics Department, the College of Law, and the Gies Business College.
1. See, e.g., Paul A. Samuelson, Economics 425 (10th ed. 1976, et seq.). For decades, the numerous editions of Economics by Paul Samuelson, the 1970 Nobel Laureate in Economics, were the most widely used U.S. economics textbooks.
3. See generally John Warren Kindt, Diminishing or Negating the Multiplier Effect: The Transfer of Consumer Dollars to Legalized Gambling: Should a Negative Socio-Economic “Crime Multiplier” Be Included in Gambling Cost/Benefit Analyses, 2003 Mich. St. DCL L. Rev. 281 (2003) (lead article).
4. H.R. 748, 116th Cong., 2d Sess. (signed into law Mar. 27, 2020).
5. Id.; Audrey Conklin, Labor Department Estimates $36B in Improper Unemployment Payments in CARES Act, Fox Bus. (Jan. 7, 2021), https://www.foxbusiness.com/politics/unemployment-fraud-labor-department [https://perma.cc/4EDK-5UA6].
6. See, e.g., Randy Travis, The GA Lottery Just Had Its Best April Sales Ever, the Same Month Stimulus Checks Arrived, Fox 5 Atlanta (June 11, 2020), https://www.fox5atlanta.com/news/the-ga-lottery-just-had-its-best-april-sales-ever-the-same-month-stimulus-checks-arrived [https://perma.cc/3FSV-SLDS]; Eric Dexheimer, Texas Lottery Sales Surge as COVID Stimulus Money Arrives, Hous. Chron. (Apr. 23, 2020, 5:05 PM), https://www.houstonchronicle.com/news/houston-texas/texas/article/Fulfilling-warnings-lottery-sales-surge-as-COVID-15219652.php [https://perma.cc/98UX-VPUZ].
7. See, e.g., Jon Allsop, Chasing Sales During Coronavirus Pandemic, States Declare Lotteries “Essential,” Intercept (Apr. 16, 2020, 7:00 AM), https://theintercept.com/2020/04/16/coronavirus-state-lotteries-gambling-essential/ [https://perma.cc/CB5Q-JHDC] (investigative report).
8. See Myths, FAQ & History, N. Am. Ass’n State & Provincial Lotteries, https://www.naspl.org/
mythsandfaq (last visited June 10, 2021) [https://perma.cc/D8RG-8G78].
9. North American Lotteries, N. Am. Ass’n State & Provincial Lotteries, https://www.naspl.org/
nasplmembers/ (last visited June 15, 2021) [https://perma.cc/6EXB-R5H5].
10. A conservative consumer economic multiplier of 3 x $85 billion = $255 billion. For detailed analyses, see generally Kindt, supra note 3.
11. John Warren Kindt, Would Re-Criminalizing U.S. Gambling Pump-Prime the Economy and Could U.S. Gambling Facilities Be Transformed into Educational and High-Tech Facilities, 8 Stan. J.L. Bus. & Fin. 169, 176 (2003) (lead article). Casinos began operating in Illinois in 1992, and by 1995 the 40 Illinois NAACP chapters had “voted unanimously . . . to oppose expanded gambling” because it targeted minorities. Id.
12. National Gambling Impact Study Commission Final Report, Nat’l Gambling Impact Study Comm’n 3–4 (June 1999), https://govinfo.library.unt.edu/ngisc/reports/2.pdf [https://perma.cc/RTR7-MGQN].
13. John Warren Kindt, U.S. National Security and the Strategic Economic Base: The Business/Economic Impacts of the Legalization of Gambling Activities, 39 St. Louis U. L.J. 567, 579 (1995) [hereinafter Strategic Economic Base]; see also William Randy Bobbitt, Lottery Wars: Case Studies in Bible Belt Politics, at 1986–2005 (2007); Reuven Brenner & Gabrielle A. Brenner, Gambling and Speculation: A Theory, a History, and a Future of Some Human Decisions (1990). See generally Jenna Ross, The Racial Wealth Gap in America: Asset Types Held by Race, Visual Capitalist (June 12, 2020), https://www.visualcapitalist.com/racial-wealth-gap/ [https://perma.cc/B4U6-AG3F] (reporting U.S. Federal Reserve statistics).
14. See, e.g., Lyna Wiggins, Lia Nower, Raymond Sanchez Mayers & N. Andrew Peterson, A Geospatial Statistical Analysis of the Density of Lottery Outlets Within Ethnically Concentrated Neighborhoods, 38 J. Cmty. Psych. 486, 486–87 (2010).
15. In one study, African American males were five times more likely than white males to become problem gamblers. See John W. Welte, William F. Wieczorek, Grace M. Barnes & Marie-Cecile O. Tidwell, Multiple Risk Factors for Frequent and Problem Gambling: Individual, Social, and Ecological, 26 J. Applied Soc. Psych. 1548, 1549 (2006); see also Grace M. Barnes, John W. Welte & Marie-Cecile O. Tidwell, Gambling Involvement Among Native Americans, Blacks and Whites in the United States, 26 Am. J. Addictions 713, 713 (2017). Much higher percentages in all demographic categories are reported in Rick Massatti, Sanford Starr, Stacey Frohnapfel-Hasson & Nick Martt, Ohio Mental Health & Addiction Servs., Problem Gambling Report: 2012 Survey of At-Risk and Problem Gambling Prevalence Among Ohioans 17 (Feb. 2015).
16. Katherine Sayre, Coronavirus Crisis Prompts Call to Suspend Lottery Gambling, Wall St. J., Apr. 20, 2020, 6:12 PM), https://www.wsj.com/articles/coronavirus-crisis-prompts-call-to-suspend-lottery-gambling-11587376800 [https://perma.cc/U7GQ-A3YL].
17. Directed by Ramsey Denison, Money Machine could not be theatrically released in 2020 due to the COVID pandemic. See New Documentary MONEY MACHINE Exposes Massive Police Corruption, Cover-Ups Surrounding Las Vegas Mass Shooting, Yes! Weekly (June 26, 2020), https://www.yesweekly.com/film/new-documentary-money-machine-exposes-massive-police-corruption-cover-ups-surrounding-las-vegas-mass-shooting/article_1dbd92d0-b7c3-11ea-99a4-871da936da06.html [https://perma.cc/46ZB-QDWU].
18. David Alm, What Happened in Vegas – ‘Money Machine’ Unpacks the Sordid Aftermath of the 2017 Mass Shooting, Forbes (Apr. 20, 2020, 12:58 PM), https://www.forbes.com/sites/davidalm/2020/04/20/what-happened-in-vegas—a-new-documentary-unpacks-the-sordid-aftermath-of-the-2017-mass-shooting/?sh=d0be8e97de7d [https://perma.cc/UN26-292B].
21. See Help with Gambling Disorder, Am. Psychiatric Ass’n, https://www.psychiatry.org/patients-families/gambling-disorder (last visited June 10, 2021) [https://perma.cc/U733-42K3] (“Gambling disorder involves repeated problematic gambling behavior that causes significant problems or distress.”); see also Am. Psychiatric Ass’n, Diagnostic and Statistical Manual of Mental Disorders (2013) [hereinafter DSM-V 2013]. Compare Am. Psychiatric Ass’n, Diagnostic and Statistical Manual of Mental Disorders: DSM-IV 1994, 615-18 (4th ed. 1994) (pathological and problem gambling, 10 criteria), with Am. Psychiatric Ass’n, Diagnostic and Statistical Manual of Mental Disorders: DSM-IV-TR (2000), and DSM-V 2013.
22. See Online Gambling Platforms Gained Larger User Base with Pandemic as a Driver of the Global Online Gaming Market 2020, Bus. Rsch. Co. (Oct. 22, 2020, 8:00 AM), https://www.globenewswire.com/news-release/2020/10/22/2112777/0/en/Online-Gambling-Platforms-Gained-Larger-User-Base-With-Pandemic-As-A-Driver-Of-The-Global-Online-Gaming-Market-2020.html [https://perma.cc/395P-H8FH].
The full text of this Symposium is available to download as a PDF.