Legalising 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 aspect of gambling can be seen in the British colonies in the Americas. The settlers introduced the games of chance, which led to the introduction of lotteries used to raise revenue in the colonies. The Gold Rush, Reconstruction, and Prohibition eras had also played influential roles in for the government to begin legalizing gambling in many parts of the country. The most significant events were the stock market crash in 1929, along with the Hoover Dam project that led to the legalization of gambling in Nevada from the passing of 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 shown 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 published in news stories to try to come to a valid conclusion in regards to the relationship associated with gambling and crime. It will also scrutinize the amount of economic impact on the country in relation to gambling and the influential persons involved in bringing up the gambling industry. The paper will also examine the several crime families involved in gambling and the number of holdings they contain in the gambling industry. The paper will also take a historical perspective to analyse the increase in crime from the influence of gambling and 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 centres and places were known as saloons 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 travellers to find people to socialize with and often a 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 into 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, including frequent fights and pistol shots (PBS Online, 1997). The reason 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 1800s saw gambling coming under constant attack. Most of the opposition was based on moral grounds and was flamed by many crimes committed regarding fraud. One of the most notorious scandals of the time was the private lottery passed by Congress in 1823. The lottery was being used for the beautification of the capital 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 1960s, 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 were involved in teamster financing of casinos and hidden ownerships that would employ suspicious people 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 situated in casinos. Most of these come to the interest of skimmers and people involved in money laundering, with skimming becoming a significant problem. In the early 1960s, casino owners became known for tax evasion, and many indictments became widespread (Dunstan, 1997). A study conducted by the Attorney General and the City of San Jose Police Chief asserts that there has been an increase in robberies and assaults of persons seen leaving card clubs, as are usually those people who 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 since 1990; 26 U.S. counties have established casinos. This number has greatly increased to 167 counties having casino establishments (Knowlton, 1999).  Studies reported a decrease in the first year of opening 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 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 been surmounted on their heads.

As discussed before, the most prevalent crimes by gambling are fraud, tax evasion, and money laundering. In Milwaukee, an organised crime boss was convicted of five gambling and tax charges, being accused of leading a betting operation from 1977 to 1980. This specific betting operation produced a grossing of 2 000 dollars daily (Associated Press, 1983). Another recent example and can be cited is where Hillel Nahmad was charged with leading a  gambling and money laundering operation that encompassed the cities of Kyiv, Moscow, Los Angeles, and New York (Santora & Rashbaum, 2013). The uncovering of this operation has exposed many faces, including a Russian gangster accused of attempting to rig the Winter Olympics competition in Salt Lake City and a female accomplice who was once involved in organising high-stakes 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

The legalisation of the once looked down upon form of gambling has come to attention in recent years due to many cities and states becoming attracted by the potential 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 legalise several forms of gambling. The legalisation of gambling has not produced the funds that proponents of casinos so much anticipated. However, the net financial gain paid to counties and states holds great significance. An example of this is when New Jersey casinos paid the county and state an estimated 200 million dollars in fees and taxes in 1981 (Albanese, 1985).   In 1998, the gambling industry’s gross revenue from legal gambling institutions accounted for 41 percent. Of the 41 percent of legal gambling revenues were generated from casino gambling, while 31 percent came from lotteries and 15 percent was contributed by tribal gaming (Piscitelli & Albanese, 2000). Many researchers conclude that casinos in the legalised 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 and an estimate of 2 billion dollars in new construction in the 1980s (Albanese, 1985).

A certain fear that surmounts in many states is that organised crime and criminal figures will be attracted to casinos, disrupting the integrity of games, operations, and reputation. Other issues related to the increase in crime are the larger insurgents of increased pathological gambling, new crimes in casino jurisdictions, and the overall morality of gambling. Regarding the economic potential of casinos, many opponents believe that increasing revenues are mainly drawn from residents own have already been residing in the area where casinos are established (Piscitelli & Albanese, 2000).  Many studies reporting gambling have cited that Atlantic City’s crime rate has increased and exceeded the 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 opening its casinos (Impact of Casinos in Tao, n. d.). Most tourists visiting the Atlantic City gambling establishment are warned not to roam further than two blocks from where the casinos are situated. There is a high risk of danger, including 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 an illegal act that constitutes a crime. According to a survey conducted by gamblers, anonymous asserted that out of the total respondents, at least 46 percent 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. Many studies have cited 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 categorised 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 unrelated to gambling and usually lie to family and friends. A major characterisation of pathological gamblers is their reliance on others to pay for or help in paying for their gambling debts. Recent studies have shown 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 suffering from gambling addiction are about 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 driving will under the influence of alcohol or drugs and being distracted and deprived of sleep compared to the general population (California Council on Problem Gambling, 2013). Gambling addiction is also present in much higher numbers amongst inmates. A study conducted in 2004 showed inmates having a greater gambling problem that amounted to 300 percent to 500 percent more than 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 percent of signs that indicate problem gambling (California Council on Problem Gambling, 2013).

People suffering from minuet to severe gambling addiction have been shown to cause problems in the categories of finance, emotion, social, and sometimes physical for the gambler and their 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 percent 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 debt repayment or the addictive behaviour associated with gambling, pathological gamblers are more prone to committing some crimes, even those classified as petty crimes. A report published by the Department of Justice has asserted statistics that more than thirty percent of pathological gamblers reported committing a robbery within the time frame of a year 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 percent had admitted to assaulting a person 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 with drugs than other gambling types. The Department of Defense issued a report that asserted pathological gamblers to have sold drugs presented as one-third of the arrestees. The statics show a much higher percentage than problem gamblers that make up 19.2 percent, at-risk gamblers that make up 20.2 percent; and low-risk gamblers that make up 16.1 percent (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 drugs for their own use. The report published by the Department of Justice has asserted that 60 percent 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 drugs (Ashcroft, Daniels & Hart, 2004). The report goes on to indicate that most pathological gamblers have maturity 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 evidence present, it is clear that gambling has a large and significant impact on crimes. As seen with the Helly Nahmad case, it seems that gambling is producing many white-collar crimes throughout the country. These crimes usually go by unsuspected due to the legalisation of gambling across many states. Although legalising gambling has brought about an economic boom in many counties, cities, and states throughout the country, they have had direct and indirect effects on crime. Most white-collar crimes have evolved from the legalisation of gambling, especially casinos, 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 fine example of this is when the FBI was investigating the allegations of a Louisiana state legislator taking million-dollar payoffs to approve of an expansion on video poker games. Most of the persons that were involved in buying out using this influence were in some way connected to organised 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 organised religion. Another reason might be the economic increase that many areas in the country are recently experiencing. More or less, gambling has its vices in society by the increase in the amount of organised 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 evidence of its direct impact on the increase in crime. Instead, the gambling addiction led to gamblers honing these characteristics that later turn to criminal acts or offences in a three-year time span. The legalisation of gambling, primarily casinos, has led to this result, 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 organised crime units has been more focused on Indian Casinos found on reserves. Most of these have been unsuccessful attempts; however, they are presently making it necessary for more regulation and oversight.


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