Study: State gambling cash not fully utilized
Published on 7/17/2009
HARTFORD, Conn. (AP) _ A new state-ordered study concludes that legalized gambling is a boon to the Connecticut economy, but the state has done a poor job of regulating the industry and more people are becoming addicted to gambling.
The 390-page study, called "Gambling in Connecticut: Analyzing the Economic and Social Impacts," was conducted by New Jersey's Spectrum Gaming Group. It's the state's first analysis of legalized gambling in 12 years.
"The goal was to look at the good, bad and ugly of gambling in the state," said Michael Diamond, Spectrum's vice president of research. "We had to go back to 1997 to find a study like this, so we wanted to give a comprehensive look at gambling in Connecticut since then.
"We concluded that there should be more state gaming regulation there."
The study says Mohegan Sun and Foxwoods casinos are responsible for creating 12 percent of the new jobs in the state since 1992 and that the casinos have brought in $1.2 billion worth of personal income to the state.
In 1994, casinos added $24 million to the state's general fund; in 2007, casinos brought in $340 million. But although the state once distributed 78 percent of the money brought in by casinos to its 169 towns and cities, that amount has now dropped to 21 percent.
"Over the years, the state has taken more and more out of the pot," Diamond said. "Some of the towns feel like they are getting the short end of the stick."
Diamond said one statistic that stood out to him was the state's number of embezzlement cases.
"In our research, we found a significant number of people who had no history of violence or crimes get involved in cases with large sums of money to support a gambling habit," he said. "We've found that other states have had problems there as well, but not to the extent of Connecticut."
The study found that Connecticut had the biggest increase of all states that reported at least 40 embezzlements between 1992 and 2005. The state's 397 percent increase is almost 10 times the national average.
Diamond also mentioned the state's unregulated self-exclusion program, where admitted gambling addicts can request a casino to ban them, as another source of worry.
The study said Connecticut was the first state to establish a self-exclusion program in 1994, but neither state casino has issued a fine for violation of the program.
A case study shows 20 percent of self-excluded gamblers at Mohegan Sun have returned to the casino since joining the program. Of that percentage, one in five have gone back at least nine times.
"In New Jersey and some other states, if it is found that the program has been violated, the casinos get hit with a fine," Diamond said. "It seems to be voluntary among the casinos in Connecticut, but there's no leverage."
The study reports that the general assembly raised the budget for services to help gambling addicts from about $930,000 in 2001 to more than $2 million in 2008. But, the study concludes that the increase has not kept up with the growing number of cases handled. Those have jumped from 326 in 2001 to 922 in 2008.
Marvin Steinburg, executive director of the Connecticut Council on Problem Gambling, said it's in the state's best interest to closely monitor the problem.
"Of all the services and products that the state provides, the only one that is harmful to a small but significant number of people is gambling," he said. "While many other social services are extremely important that there be sufficient money for, it is incumbent upon the state to realize that if gambling gets out of control, then there will be a backlash against it and the state's money that it depends upon could be threatened."
A Foxwoods spokeswoman said the casino wouldn't comment on the study until officials have time to review it.