Legalizing Gambling in the United States has Influenced the Rise in Crime

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Type of Academic Paper – Essay

Academic Subject -Criminal Law

Word Count – 3000 words


Gambling has also been seen as a malicious act in society with people looking down upon gamblers and their activities. Even though history and society have viewed gambling with a bad eye, it still has led to its legalization. The first aspects of gambling can be seen in the British colonies in the Americas with the settles introducing the games of chance which led to the introduction of lotteries that were used to raise revenue in the colonies. The eras of the Gold Rush, Reconstruction, and Prohibition had also played influential roles in for the government to begin legalizing gambling in many parts of the country. The most significant of the events was the stock market crash in 1929 along with the Hoover Dam project led to the legalization of gambling in Nevada from the passing of the Assembly Bill 98 legalized majority forms of gambling to increase revenues in the state. Most of the year 2007 activity involving gambling generated gross revenue estimated to about 92.27 billion dollars along with 354,000 jobs in commercial casinos in the United States. However, the economic boost cannot eliminate the factors of compulsive gambling, political corruption and higher crime rates. Recent studies have showed that even though there is an upsurge of great economic effects from gambling, host communities of gambling will eventually experience a dramatic and steady rise in serious crime.

The purpose of this paper is to examine the several issues that have arisen from gambling that involves the rise in crime. The paper will analyze recent events that have been published in news stories to try to come to a valid conclusion in regards to the relationship that is associated to gambling and crime. It will also scrutinize the amount of economic impact on the country in relation to gambling as well as the influential persons involved in bringing up the gambling industry. The paper will also examine the several crime families that are involved in gambling and the amount of holdings they contain to the gambling industry. The paper will also take a historical perspective to analyzing the increase in crime from the influence of gambling as well as the legalization of gambling in the United States.

A Historical Perspective of Gambling and Crime

Throughout history, almost every society in every culture throughout the world has been seen. Mostly in American history gambling centers and places were known as saloons which were seen established in major cities like New Orleans, St. Louis, Chicago, and San Francisco. Most of these saloons were seen as a resting and gathering place for travelers where they can find people to socialize with and often gamble. The Californian Gold Rush was a significant initiator to making San Francisco a popular town for gambling. Many gambling saloons during that time incorporated miners from different nationalities to this form of entertainment. Some of the most opulent gambling halls of that time like the Bella Union would offer high risk gambling that would lead to minor indecencies which included frequent fights and pistol shots (PBS Online, 1997). The reasons for this trend heading west was during the 1830’s most actions that came from professional gamblers were increasingly becoming scrutinized turning against them. Most of the professional gamblers were blamed by local persons for limiting the economic growth in the communities, interfering with businesses, committing numerous crimes and decreasing morality in their society.

Most of the early 1800’s has seen gambling coming under constant attack, most of the opposition was based on moral grounds and was flamed by many crimes being committed in regards to fraud. One of the most notorious scandals of the time was the private lottery that was passed by Congress in 1823. The lottery was being used by for the beautification of the capitol city of Washington D.C. The organizers of the lottery fled with the gathered proceedings leaving the winner unpaid (Dunstan, 1997). Cases like these that included evidence of fraud and dishonesty in lottery operations led the fire to prohibit and ban all sorts of gambling.

Many varieties of gambling have been termed illegal making criminals the only operators of the gambling game. By the 1960’s when gambling restrictions from states had become more lenient, criminals were one of the first investors to open up legal gambling establishments. Many regulating authorities and bodies presiding in Nevada did not prevent notorious people related to organized crime from operating commercial casinos. Most mobsters in were involved in teamster financing of casinos along with hidden ownerships that would employ people that were suspicious in character and background (Dunstan, 1997). The act of gambling itself is considered a target for criminals due to the use and possession of large amounts of money that is situated in casinos. Most of these come to interest of skimmers and people involved in money laundering with skimming becoming a significant problem. In the early 1960’s casino owners became known for tax evasion and many indictments became widespread (Dunstan, 1997). A Study that was conducted by the Attorney General and the City of San Jose Police Chief assert that there has been an increase in robberies and assaults of persons that have been seen leaving card clubs as are usually those people that have won money (as cited in Dunstan, 1997).

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Recent Reports of Crimes Related to Gambling

The United States has seen a large boom in the gambling industry with the 1990; there were 26 U.S. counties that has established casinos. This number has greatly increased to 167 counties having casino establishments (Knowlton, 1999).  Studies that were conducted reported a decrease in the first year of the opening of casinos in small localities which is mainly due to the local economy being stimulated and an increase in job opportunities. However, David Mustard from the University of Georgia has asserted that with the passage of time “shady, unattractive things begin to happen” (Knowlton, 1999, para 2). Many researchers have indicated that in order to begin involvement in any variation of crime a whole process must be played out which is estimated to take over three years. Gamblers that are problematic or have pathological tendencies begin to run up debt by using credit cards and then turn to their savings or begin borrowing. The last process is when these gamblers begin to turn towards violence to pay debts that have surmounted on their heads.

As discussed before, the most prevalent of crimes by gambling are fraud, tax evasion, and money laundering. In Milwaukee, an organized crime boss was convicted of five gambling and tax charges being accused of leading a betting operation which lasted from 1977 to 1980. This specific betting operation produced a grossing of 2, 000 dollars daily (Associated Press, 1983). Another example which is recent and can be cited where Hillel Nahmad was charged of leading a  gambling and money laundering operation that encompassed cities of Kiev, Moscow, Los Angeles, and New York (Santora & Rashbaum, 2013). The uncovering of this operation has led to many faces being exposed which include a Russian gangster who is accused of attempting to rig the Winter Olympics competition in Salt Lake City as well as a female accomplice who was once involved in organizing high-stake poker games for the famous of Hollywood. The Federal Bureau of Investigation has estimated the operation of laundering surmounts to more than 100 million dollars in gambling money (Santora & Rashbaum, 2013). The accused Nahmad is also known to have been financing a multi-million dollar gambling ring operating in the United States (Santora & Rashbaum, 2013).

Real Economic Impact from Legalizing Gambling and Influence on Crime

Legalization of the once looked down upon form of gambling have come to attention in recent years due to many cities and states becoming attracted by the potential that is held for new sources of revenue. These revenues do not involve the increase in income, property, or sales taxes which have led many states to legalize several forms of gambling. The legalization of gambling has not produced funds that were so much anticipated by proponents of casinos. However, the net financial gain paid to counties and states hold great significance. An example of this is when New Jersey casinos paid the county and state an estimated total of 200 million dollars in fees and taxes in 1981 (Albanese, 1985).   In 1998, the gabling industry’s gross revenue produced from legal gambling institutions accounted 41 per cent. Of the 41 per cent of legal gambling revenues were generated from casino gambling, while 31 per cent came from lotteries and 15 per cent was contributed by tribal gaming (Piscitelli & Albanese, 2000). As concluded by many researchers, casinos in the legalized form of gambling hold the most potential in improving various social and economic issues in local counties other than raising funds. An example of this is seen with the establishment of Atlantic City in New Jersey. The casinos established there have produced over 28,500 new jobs as well as an estimate of 2 billion dollars in new construction in the 1980’s (Albanese, 1985).

A certain fear that surmounts in many states is that organized crime and criminal figures will be attracted to casinos which will go about disrupting the integrity games, operations, and reputation of the casinos. Other issues that are related to the increase in crime is the larger insurgents of increased pathological gambling, new crimes in casino jurisdictions, and the overall morality of gambling. In regards to the economic potential of casinos, many opponents believe that increasing revenues are mainly drawn from local residents own have already been presiding in the area where casinos are established (Piscitelli & Albanese, 2000).  Many studies reporting on gambling have cited that Atlantic City’s crime rate has increased and exceed that of state’s rates since the opening of casinos in 1978 (Impact of Casinos in Tao, n. d.). The crimes of assault and theft have significantly increased in areas where casinos are opened. The crime of Atlantic City, New Jersey has increased with this trend after the opening of its casinos (Impact of Casinos in Tao, n. d.). Most tourists that are visiting the Atlantic City gambling establishment are warned of not roaming further than two blocks from where the casinos are situated as there is a high risk of danger which includes assault, armed robbery, and rape (Impact of Casinos in Tao, n. d.).

Problem and Psychopathic Gamblers

Most studies have indicated that gamblers that transform into problem gamblers or psychopathic gamblers have a greater tendency to commit to an illegal act that constitutes a crime. According to a survey that was conducted by gamblers anonymous asserted that out of the total respondents at least 46 per cent of the respondents had indicated that they committed some form of an illegal act (California Council on Problem Gambling, 2013). Most of the common crimes committed by these gamblers are: armed robbery, theft, fraud, domestic violence, abuse and neglect. It has been cited by many studies that pathological or problem gamblers have a greater chance of 3 to 3.5 times more likeliness to both get arrested and spend time in jail (California Council on Problem Gambling, 2013). Most compulsive or pathological gamblers are categorized as those that suffer heavy losses which are often amounted to 100 dollars or more. They then reduce to borrowing, stealing money, or writing bad checks to pay for the gambling debts. Most of these problematic gamblers avoid or an unable to pay for their bills not related to gambling and usually lie to family and friends. A major characterization of pathological gamblers is their reliance on others to pay for or help in paying for their gambling debts. Recent studies have showed that pathological gamblers make up at least 2.5 million of the American population and 3 million are known to be problem gamblers (Ashcroft, Daniels & Hart, 2004).

People that are suffering from gambling addiction are about to two to seven times more like to begin the intake of illegal drugs, smoking, and binge drinking (California Council on Problem Gambling, 2013). Most of these people have reported to driving will under the influence of alcohol or drugs as well as being distracted and deprived of sleep than compared to the general population (California Council on Problem Gambling, 2013). Addiction to gambling is also present in much higher numbers amongst inmates. A study conducted in 2004 showed results of inmates have a greater gambling problem that amounted to 300 per cent to 500 per cent more as compared to the general population (California Council on Problem Gambling, 2013). Recent reports that have come in from the Los Angeles Sheriff’s department have given unofficial estimations that inmates in low and medium security jails show a populace of 40 to 60 per cent of signs that indicate problem gambling (California Council on Problem Gambling, 2013).

People that are suffering from minuet to severe gambling addiction have shown to cause problems in the categories of finance, emotion, social, and sometimes physical for the gambler and his or her family. Many of these addicts have a difficult time coping with the negative consequences of the addiction making them feel overwhelmed, shameful, and guilty. It has also been reported the twenty per cent of pathological gamblers commit suicide or at least attempt to commit suicide, which was reported by the National Council on Problem Gambling (as cited in California Council on Problem Gambling, 2013). Families of these problem gamblers also exhibit a higher risk of attempted suicide.

Due to the overwhelming sense of repayment of debt or the addictive behavior associated to gambling, pathological gamblers are more prone to committing some sort of crime even those classified as petty crimes. A report published by the Department of Justice has asserted statistics that more than thirty per cent of pathological gamblers reported to committing a robbery within the time frame of a year that were arrested in the Las Vegas or Des Moines area Ashcroft, Daniels & Hart, 2004). The report asserts that this is at least doubled the amount percentage exhibited by low risk gamblers. It is also seen that from those arrested one-third of the arrestees admitted that the crime or robbery was enacted to pay for gambling games and debts Ashcroft, Daniels & Hart, 2004). The report further results that from those interviewed of the arrestees thirteen per cent had admitted to assaulting a person in order to get money (Ashcroft, Daniels & Hart, 2004).

Gamblers are viewed to show more tendencies in other criminal acts such as drug dealing. Pathological gamblers are more prone to deal in drugs that other gambling types. The Department of Defense issued a report that asserted pathological gamblers to have sold drugs presented as being one-third of the arrestees. The statics show a much higher percentage than compared to problem gamblers that make up 19.2 per cent, at-risk gamblers that make up 20.2 per cent, and low-risk gamblers that make up 16.1 per cent (Ashcroft, Daniels & Hart, 2004). Most pathological gamblers have used the sale of drugs as a means to fund their gambling habit or used to pay off impending debts from gambling. Most tests conducted in recent studies have also found that most gamblers are prone to using one or more illegal drug for their own use. The report published by the Department of Justice has asserted that 60 per cent of all gamblers that are arrested in Las Vegas have been screened using urine testing which produced results was showing positive for at least one or more illegal drug (Ashcroft, Daniels & Hart, 2004). The report goes on to indicate that most pathological gamblers have a matured in committing crimes, most of the persons interviewed committed their first crime by the age of 21 these persons also developed an alcohol problem when they reached the age of 23 to 24. It is also found that males that have a pathological problem are more prone to committing serious crimes at an earlier age than in comparison to women.

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By reviewing the relative evidences present it is clear that gambling has a large and significant impact on crimes throughout the country. As seen with the Helly Nahmad case it seems that gambling is producing many white collar crimes throughout the country, crimes that usually go by unsuspected due to the legalization of gambling across many states. Although legalizing gambling has brought about an economic boom in many counties, cities, and states throughout the country they have had direct and indirect effects to the increase of crime as well. Most white collar crimes that have evolved from the legalization of gambling, especially casinos is money laundering, fraud, embezzlement, and skimming. There might also be connections to gambling tycoons in the industry trying to develop the use of corruption. A fair example of this is when FBI was investigating the allegations of a Louisiana state legislator of taking million dollar payoffs in order to approve of a expansion on video poker games. Most of the persons that were involved in buying out using this influence were in some way connected to organized crime families.

Gambling used to be a moral indecency for many people, however that viewpoint has greatly changed in society. No longer is gambling or gamblers seen with the same eye, the reason for this might be due to the decrease in persons that are participants in organized religion. Another reason might be the economic increase that many areas in country are recently experiencing. More or less, gambling has its vices in society by the increase in the amount of organized crime like the Helly Namhmad case and other petty crimes of assault, robbery, fraud, or rape that might be linked to persons that have a pathological tendency to gamble for their game or it might be to pay off increasing debts. Gambling has recently not turned up any evidences in it direct impact to the increase in crime. Instead, the addiction of gambling as led to gamblers honing these characteristics that later turn to criminal acts or offenses in a three year time span as stated before. Legalization of gambling, primarily casinos have led to this result which is producing an increase in pathological or problematic gamblers across the country. Most of the gamblers are increasingly prevalent in Las Vegas or Des Moines. Infiltration of organized crime units have been more focused on Indian Casinos found on reserves, most of these have been unsuccessful attempts however they are present making it necessary for more regulation and oversight.


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