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June 14, 2010 Print

Frequently Asked Questions: Gambling in the United States

by Chad Hills

[Revised: 6-11-2010]

Q: How many people gamble in the United States?
A:
Overall, 86 percent of Americans report having gambled at least once during their lives.1 Approximately one third of the population consists of non-bettors (have not gambled in the past 12 months). About 46 percent of legal-aged adults gamble in casinos: seven in 10 also gamble in other formats. More frequent gamblers who visit casinos once or twice per week represent 17 percent of the population, while 21 percent of the population chooses other forms of gambling.2

Of people who gamble, the most money is lost at commercial casinos (represents 36 percent of all gambling revenues). Indian casinos and state-run lotteries tie for second place, each representing about 26 percent of all gambling revenues. Commercial, Indian and lottery revenues, combined, represent approximately 88 percent of all U.S. gambling revenues. [See Indian Gambling Fact Sheet for sources and more information.]

Q: How many people in the United States experience gambling addiction?
A:
The National Gambling Impact Study Commission collected data from a Harvard Medical School meta-analysis to arrive at the following estimates:3
•  Between 15 to 20 million adults and adolescents have either problem or pathological gambling addictions, which is about 5-7 percent of the U.S. population (2000).
•  7.5 million American adults have a problem or pathological gambling addiction (5.3 million problem gamblers and 2.2 million pathological gamblers)
•  About six percent of adult gamblers evidence negative consequences of gambling addiction
•  7.9 million American adolescents (illegal, underage) have a problem or pathological addiction to gambling (5.7 million problem gamblers and 2.2 million pathological gamblers)
•  Interesting Fact: If you take 15 million people and place them in average-sized NFL Football stadiums that hold about 70,000 people, you could fill approximately 214 stadiums to capacity with problem and pathological gamblers in the U.S. alone!
[See the NGISC Report, CHAPTER 4. PROBLEM AND PATHOLOGICAL GAMBLING ]

Q: How much do Americans spend on gambling every year?
A: According to the 2006 Gross Annual Wager Report, Americans lost nearly $91 billion on all forms of gambling combined.4 The National Gambling Impact Study Commission (NGISC) noted that Americans spend more on gambling than on recorded music, theme parks, video games, spectator sports and movie tickets combined.5 Americans lost $32.4 billion gambling in commercial (non-Indian) casinos alone (2006).6

But the question remains, how much money do Americans gamble (losses and wins combined)? Consider that the majority of money taken by casinos comes from slot machines. An average for payout on slots is 90 cents on every dollar (or 90 percent return).7 If casino revenues ($91 billion) are considered representative of the gambling trade’s gross revenue (about 10 percent of all money wagered), then we can estimate that Americans likely spent close to $910 billion total on all forms of gambling in 2006. Not all forms of gambling return 90 percent, but we can use this for a ballpark estimate. (Consider what Americans spent on some durable and consumable products by comparing the top five Fortune 500 Companies’ revenue for 2006:

#1 Exxon/Mobile = $339.9B;

#2 Wal-Mart Stores = $315.7B;

#3 General Motors = $192.6B;

#4 Chevron = $189.4B;

#5 Ford Motor = $177.2B.)8

Addicted gamblers, unfortunately, account for the lion’s share of gambling profits. Around 50-60 percent of the adult population can be classified as light bettors—gamble some, without apparent issue, while another 33 percent or so don’t gamble. It’s the remaining 10 percent that represents the heavy, frequent bettors who are likely addicted and account for approximately 61 percent of all casino revenues in table and slot gambling.9 Among lottery gamblers, the top 10 percent of heavy players account for 65 percent of all lottery revenues.10

Q: The lottery is a more benign form of gambling and doesn’t cause addiction, right?
A: Wrong. Depending what form of lottery people play, the lottery can be every bit as addictive as casino devices. In fact, research on video lottery terminals or VLTs (clones of electronic slot machines) found that these machines could lead to addiction in just over a year. Electronic gaming devices are the most addictive form of gambling in history.11
Ed Looney, executive director of the Council on Compulsive Gambling of New Jersey, estimates that about 5 percent of those who play a lottery become seriously addicted. He said most lottery players run on an 80-15-5 rule, meaning that of all the people who play, about 80 percent do so with no sign of compulsive behavior. About 15 percent are at risk for addiction, while the remaining 5 percent are in extreme danger of becoming pathologically addicted. “It becomes part of their daily life,” Looney said. “It begins to control them.”12 Among traditional ticket-lottery games, scratch-off or instant games are the most popular form of lottery gambling.13 In Canada, where VLTs are prevalent and accessible in most every public square, one in four people have a problem with VLT gambling addiction. Canada’s video lottery terminals are one of the leading causes of addiction.14

Q: How many states allow commercialized casinos?
A: Currently, 13 states house 443 separate commercialized (non-Indian) casinos. The casinos’ combined gross revenue in 2006 was $30.74 billion.15

Q: How many states have some form of legalized gambling?
A:
There are 48 states with some form of legalized gambling. Hawaii and Utah remain the only gambling-free states.16

Q: How many states have lotteries? What states are without lotteries?
A: There are 43 states (and the D.C. area) that have legalized lotteries. The eight remaining states that do not have lotteries are: AL, AK, HI, MS, NV, UT and WY.17

Q: What are “VLTs” and what do they have to do with horse and dog racing?
A:
VLT stands for “Video Lottery Terminal.” A VLT is basically an electronic slot machine, except the money goes into state coffers rather than to individual casino operators. Video slots and video lottery machines have earned their reputation as being the “crack cocaine” of the gambling industry because they are the most addictive form of gambling in history.18
 
See the following Fact Sheets for more information:
o **Video Lottery Terminals (VLTs) and Electronic Gaming Devices
o **The Impact of Racinos
o **Indian Gambling Fact Sheet

Original article publish date: April 30, 2008.

Chad Hills is a research analyst for gambling policy and sexual health for CitizenLink, an affiliate of Focus on the Family.

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ENDNOTES:
1. National Opinion Research Center, Gambling Impact and Behavior Study, Report to the National Gambling Impact Study Commission, April 1, 1999, p. 6.
2. Earl L. Grinols, Gambling In America: Costs And Benefits, (New York: Cambridge University Press, 2004), pp. 45-46.
3. The National Gambling Impact Study Commission, Final Report, p. 4-1, June 1999, <http://govinfo.library.unt.edu/ngisc/index.html> (5 December 2003).
4. ”The Gross Annual Wager of the United States: 2006,” Christiansen Capital Advisors, LLC., 2007.
5. The National Gambling Impact Study Commission, Executive Summary, p. 4, June 1999, <http://govinfo.library.unt.edu/ngisc/index.html> (5 December 2003).
6. ”2007 AGA Survey of Casino Entertainment,” American Gaming Association online, p. 7, <http://www.americangaming.org/assets/files/aga_2007_sos.pdf > (24 April 2008).
7. ”Is Legalized Gambling A $600 Billion Industry Or A $50 Billion Industry,” American Gaming Association online, September 1999, <http://www.americangaming.org/industry/factsheets/general_info_detail.cfv?id=11> (24 April 2007).
8. ”Fortune 500 – 2006,” CNNMoney.com online, 17 April 2006, <http://money.cnn.com/magazines/fortune/fortune500/full_list/> (24 April 2008).
9. Rachel A. Volberg, D. R. Gerstein, and E. M. Christiansen, “Assessing Self-Reported Expenditures on Gambling,” Managerial and Decision Economics, January-May 2001, Vol. 22, No. 1-3, Table 2, p. 82.
10. Charles T. Clotfelter and Philip J. Cook, Selling Hope: State Lotteries in America, (Cambridge, MA:Harvard University Press, 1989), p. 93.
11. R.B. Breen and M. Zimmerman, “Rapid onset of pathological gambling in machine gamblers,” Journal of Gambling Studies, Vol. 18, No. 1, 2002, <http://www.lifespan.org/Services/MentalHealth/RIH/Gambling/Research/default.htm> (21 August 2003).
12. Schuyler Kropf, “Games’ link to addiction hard to gauge,” The Post and Courier, Charleston.net online, 6 January 2003, <http://charleston.net/stories/010603/sta_06lottery2.shtml> (17 December 2003).
13. Charles T. Clotfelter, et al., ” State Lotteries at the Turn of the Century: Report to the National Gambling Impact Study Commission,” Duke University, 23 April 1999, <http://govinfo.library.unt.edu/ngisc/reports/reports.html> (17 December 2003).
14. Graeme Smith, “Prairies rife with addicts to gambling, study finds,” <i>The Globe and Mail</i> online, p. A5, 13 December 2003, &lt;http://www.globeandmail.com/servlet/ArticleNews/TPStory/LAC/20031213/GAMBLING13/TPScience/&gt; (14 December 2003).
15. ”2010 AGA Survey of Casino Entertainment,” American Gaming Association online, pp. 4, <http://www.americangaming.org/assets/files/State_of_the_States_2010_FINAL.pdf> (11 June 2010).
16. International Gaming and Wagering Business, “United States Gaming at a Glance,” November 2003, pp.16-18.
17. ”Sales and Profits,” North American Association of State & Provincial Lotteries online, <http://www.naspl.org/index.cfm?fuseaction=content&PageID=3&PageCategory=3> (11 June 2010).
18. R.B. Breen and M. Zimmerman, “Rapid onset of pathological gambling in machine gamblers,” Journal of Gambling Studies, Vol. 18, No. 1, 2002, (21 August 2003).

 



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