Economist David B. Mustard and Earl L. Grinols of Baylor University analyzed crime data collected from all 3,165 U.S. counties in the United States from 1977 to 1996 and looked at local crime rates before and after casinos opened.
What they discovered was that that crime rates didn't increase when a casino first opened - but did start to rise slowly during the first year of operation, then more quickly until it was greater than before the casino was built.
And, by the fifth year of operation,
- robberies were up 136%
- aggravated assaults 91%
- auto theft 78%
- burglary 50%
- larceny 38%
- rape 21%
Controlling for other factors
- 8.6% of property crimes and
- 12.6% of violent crimes
Were attributed to casinos.
When casinos come to town, crime goes up. Crime, including embezzlement, robbery, DUIs,
aggravated assaults and domestic violence rates, increases 8 -10% right after casino is built,
and continues to increase after that -- and local communities have to pick up the tab. Local
governments also bear the costs of significant increases in emergency service calls and casino related
traffic problems requiring police oversight.
But what about all those casino jobs and newly minted police?
Mustard said the positive effects of casinos are fleeting -- payrolls and tax collections quickly plateau, and municipalities don't keep adding cops after the first wave of casino tax revenue rolls in.
What's more, Mustard said, crime rates didn't rise in neighboring counties while they soared in casino counties -- evidence that casinos create crime locally and don't merely attract it from somewhere else.
Casinos and Crime: The Luck Runs Out By Richard Morin
Washington Post, May 11, 2006
While most Americans assume an association between gambling and increased criminal activity, the gambling industry offers denials along with various statistical manipulations attempting to counter this perception. Data from gambling communities across the country, however, indicates that gambling does indeed foster a significant increase in crime.
Nothing could illustrate this better than New Jersey where, in addition to a Casino Commission, the NJ Attorney General's office requires it's own
And the New Jersey State Police maintains a separate Special Investigation Section which includes a separate unit for
- Division of Gaming Enforcement
Obviously, if casino related crime didn't exist, there'd be no need for this plethora of specialized casino-related enforcement agencies.
- Casino Investigations
- Special Investigations
- Financial Crimes Investigation
- Casino Services
The FBI in Cleveland isn't waiting for a casino to be built -- temporary or otherwise -- to make a pre-emptive strike.
Agents recently met with Cavs owner and casino builder Dan Gilbert and his staff to prepare them for the ways crime can creep into the casino scene.
"This isn't our first rodeo," said Cleveland FBI agent-in-charge Frank Figliuzzi. "The FBI around the country and around the world has a history with casino operations."
Figliuzzi said those issues include organized crime, union and labor issues and various corruption schemes that have arisen in other cities.
Vigilance begins with the hiring process: "We've seen casinos compromised from within," Figliuzzi said.
After-Effects: Organized Crime
Committing crimes to acquire gambling money is one of the diagnostic characteristic of problem gamblers. About 30% of the incarcerated, and formerly incarcerated, have a gambling problem. A personal budget crisis is a reason for problem gamblers to relapse. The current Massachusetts FY 2010 budget crisis is a reason for legislators to expand legalized gambling.
Ledyard was a small, quiet rural town of 15,000 in the
1980's. By the 1990's Ledyard had become host to the world's largest casino and had the fifth highest
crime rate in CT.
Casinos attract drugs and prostitution. I witnessed all of these ills firsthand in CT.
In the late 90's the Ledyard tax collector, an upstanding middle-aged woman, embezzled $300,000 from
the town's coffers and lost it all at the slots before she was caught. Embezzlements happened in the
Sprague town hall, the Stonington town hall, a local auto dealer, and a local lawyer's office. With a
casino nearby, it became too convenient for some people to go daily before or after work (sometimes
both) to gamble away their (and sometimes other people's) money.
Projected benefits of expanded gambling include increased economic activity, jobs, licensing fees, annual casino taxes and recapturing some part of the $93 million in Massachusetts gambling dollars lost to Connecticut casinos.
But expanded gambling will
increase crime and the costs associated with it.
Read this letter from a Connecticut Parole Officer,
with 20 years of on the job, who has "been a direct witness" to the additional burden that higher crime rates resulting from the two casinos have placed on the prison system and police and medical services.
Along with the costs of increased crime, there will be additional costs associated with increases in poverty, recidivism, bankruptcy, fraud, suicides, child neglect, child abuse, job inefficiency, youth gambling and addictions of all kinds.
In one independent study, costs outweighed benefits by 3 to 1. (Grinols-2004) No independent cost-benefit analysis has been presented by proponents.
Casinos, Crime and Community Costs
Measuring Industry Externalities: The Curious Case of Casinos and Crime
Casino gambling and crime: A panel Study of Wisconsin Counties
Measuring social costs is complicated. While 2/3rds of active gamblers are engaged in harmless entertainment, they do not lose much. Most gambling losses (about 80%) come from the 20% of the gamblers who are poor, less educated, minorities and people with a wide range of mental health and addiction problems. The evidence is controversial, but credible.
In Ohio and Dearborn County, crime has escalated to the point that they have had to add an additional court to their county court system, and their jail has now become extremely overcrowded. The statistics that they have provided is that their misdemeanor caseload has grown by 200% since the riverboats came to town, and their felony caseload has tripled. They are also concerned because gambling has brought a dangerous criminal element to their community. The second largest oxycontin dealer in Kentucky is regularly transacting in their casino, and again the issue with children being unattended in the parking lot. They have had an increase in identity theft, counterfeiting, forgery, and fraud cases. They also now have a large massage parlor industry and prostitution has been attracted to the area because of the riverboat gambling. This is of concern as we have pretty much eradicated massage parlor prostitution from our community and I would certainly hate to see the resurgence of that criminal element here in Fort Wayne.
The National Gambling Impact Study Commission (NGISC-1999)
estimated about 1 out of 3 active gamblers have some level of mild, moderate to severe gambling problem. The cost of problem gamblers to society has been estimated to be from $10,000 to $50,000 a year. The number of problem gamblers increases significantly within a 50 mile radius of a new casino.
The New Hampshire Gaming Study Commission
- an independent study - (page 83) found that even one Salem or Hudson casino would cause an additional 1,200 serious crimes each year against innocent victims. Shopping malls and parks do not cause gambling addiction and related crimes. The New Hampsire Association of Chiefs of Police and every New Hampshire Attorney General for the past 35 years have opposed legalized casinos because they increase serious crime.
Hellertown is hoping to get gaming revenue to pay for two more police officers to battle an increase in crime the borough has seen since the Sands Casino Resort Bethlehem moved next door.
"We're encountering drugs we didn't encounter in Hellertown [before]," including methamphetamine and heroin, Shupp said in an interview.
In the year before the casino opened in May 2009, borough police had 35 drug arrests; in the year following they had 102. Drunken driving arrests rose from 51 to 76 in the same period. Hellertown police responded to 5,752 calls in the 14 months before Sands opened and 7,222 in the 14 months after, Shupp said.
Police Chief Robert Shupp told Borough Council this week that crime and arrests are up since last year and that means more overtime for officers testifying in court. The increase includes mostly drug crimes and drunken driving but also some counterfeiting, prostitution and other infractions.
Gambling costs the taxpayer.
As gambling expands around the country, embezzlement is growing along with it. In many cases, the embezzlers are using tax dollars to fund their addiction. Taxpayer dollars are also needed to for additional law enforcement and prosecution of these crimes.
Pokrywczynski told a federal judge that he stole because he needed cash to gamble at casinos. He is the latest of several local people convicted of large-scale embezzlements linked to legalized casino gambling.
"I've had at least 10 cases like this, and we're seeing more of them," said Thomas J. Eoannou, attorney for Pokrywczynski. "And a lot of them are people who have never broken the law before in their lives."
In the last year, four Missourians were barred from casinos for crimes of "moral turpitude," bringing the list to 17. Three were civil servants. Authorities say they fed gambling habits with embezzled tax dollars.
A St. Louis County school superintendent funneled district money to his personal life insurance fund, while often gambling 20 days or more a month.
A Kansas City-area elected administrator siphoned at least $118,000 from disabled clients' Social Security accounts, then used it, authorities said, as a "frequent customer of the area's casinos."
And a grandmother here in Wellsville stole from her community's only public school.
This town in the fields northwest of Warrenton was stunned to learn that local school bookkeeper Carolyn Yelton had admitted writing herself at least 88 district checks for about $200,000 over five years.
There are many more problem gamblers arrested (30%) compared to arrests among non-gamblers (7%). About 40% of the incarcerated (and formerly incarcerated) are estimated to have gambling problems. The annual number of police calls jumped over 400% within 5 years after the opening of the Foxwoods Resort Casino. After 4 years, Atlantic City's major crimes tripled.
Early in the afternoon of Dec. 16, the day she didn't come to work, authorities say, a 49-year-old English teacher from Brookline, N.H., her face obscured by a multicolored scarf, showed up at Washington Savings Bank in the nearby town of Tyngsborough, handed the clerk a note on a crisp white envelope neatly folded into thirds, and left with an unspecified amount of money.
Over the course of coming days, she allegedly held up at least two more banks, in Connecticut and Massachusetts, each time wrapped in the colorful scarf and each time delivering a note on a neatly folded envelope.
Police say the teacher, Gail Rasmussen, took at least $3,000 in total, and that 20 minutes after one of the robberies, she was spotted at Mohegan Sun Casino.
Recidivism is related to relapse. Alcohol and other drugs are estimated to be involved in 60% to 70% of arrests. In a 15 state 2002 study by the US Justice Department, over 2/3rds of released prisoners were re-arrested within 3 years. The recidivism rate drops to about 1 out of 3 among those who abstain. About 50% of problem gamblers also have alcohol problems. About 30% of people with alcohol and drug problems also have some level of gambling problem. The Pew Center recently reported that the number of people on probation, incarcerated and on parole in the US had tripled since 1982 to 7.3 million, 1 in every 32 citizens. Advocating for programs to reduce recidivism while simultaneously advocating for expanding legalized gambling is an example of cognitive dissonance.
The very complexity of the relationship between gambling and crime (and other social costs) demands an open, vigorous debate before legalized gambling is expanded in Massachusetts. That debate has not taken place yet. Why?
Some Gambling-Related Crime Statistics
Within five years after the opening of the nearby Foxwoods Casino, the annual number of calls to the Ledyard, Connecticut police department jumped from 4,000 to 16,700.
The total number of crimes within a 30-mile radius of Atlantic City increased by 107 percent in the nine years following the introduction of casinos to Atlantic City.
University of Nevada-Las Vegas researchers concluded that the state of Wisconsin experiences an average of 5,300 additional major crimes a year due to the presence of casinos in that state. They also attributed an additional 17,100 arrests for less-serious crimes each year to the existence of casino gambling.
An estimated 40 percent of white-collar crime is committed by gambling addicts. Research suggests that $1.3 billion per year in insurance fraud alone is related to gambling.
57 percent of 400 surveyed Gamblers Anonymous members admitted to stealing in order to maintain their gambling habits. "Collectively, they stole $30 million, for an average of $135,000 per individual."
University of Illinois professor, John Kindt, reported that 1.5 million people or .5 percent of the U.S. population became new criminals from 1994 to 1997 as a direct correlation to states' government-sponsored legalized gambling. The cost for this rise in crime ranged from $12 billion to $15 billion.
A U.S. News & World Report analysis found crime rates in casino communities to be 84 percent higher than the national average. Further, while crime rates nationally dropped by 2 percent in 1994, the 31 localities that introduced casinos in 1993 saw an increase in crime of 7.7 percent the following year.
In the first six years of casinos in Minnesota, the crime rate in counties with casinos increased more than twice as fast as in non-casino counties. According to an analysis by the Minneapolis Star Tribune, the median crime rate in casino counties rose 39 percent during that period as compared to an 18 percent increase in non-casino counties.
The number of police calls in Black Hawk, Colorado, increased from 25 a year before casinos to between 15,000 and 20,000 annually after their introduction. In neighboring Central City, the number of arrests increased by 275 percent the year after casinos arrived. In Cripple Creek, Colorado, serious crime increased by 287 percent in the first three years after casinos.
According to a study by Earl Grinols, a city can expect its crime rate to increase by about 8 percent after four or five years of introducing casinos.
The Mississippi Gulf Coast experienced a 43 percent increase in crime in the four years after casinos arrived. Harrison County, where most of the Gulf Coast casinos are located, witnessed a 58 percent increase in total crimes between 1993 and 1996.
The number of court cases filed in Tunica County, Mississippi, went from 689 in 1991, the year before casinos began operating there, to 11,100 in 1996.
Nevada ranked first in crime rates among the fifty states in both 1995 and 1996, based on an analysis of FBI Uniform Crime Report statistics. Further, the violent crime rate in Nevada increased by close to 40 percent from 1991 to 1996, a period in which the national violent crime rate dropped by approximately 10 percent.
The San Jose, California, police department reported significant increases in crime in the vicinity of a new cardroom in the year after its opening. Narcotics offenses increased by 200 percent, property crimes by 83 percent, petty thefts by 56 percent, auto thefts by 21 percent, and traffic accidents by 55 percent in a single year.
The annual number of felony cases filed in Lawrence County, South Dakota, has increased by approximately 69 percent since the introduction of casinos to Deadwood.
Half of Louisiana District Attorneys surveyed in 1995 noted gambling as a factor in rising crime rates in their jurisdictions.