The great American gamble

Image of Gillian Tett

As I was flicking through a political website the other day, I spotted a curious fact. According to calculations by Bloomberg, two of the five largest donors to the Republican party hail from the gambling industry. One, Sheldon Adelson, presides over a global empire of casinos, hotels and convention centres (such as The Venetian in Las Vegas); the other is Stephen Wynn, a man who played a key role in revitalising Las Vegas (via the Wynn Resorts group). And while both of them have tried to stay out of the limelight, Adelson is spending tens of millions of dollars on the campaign, and Wynn is offering sizeable donations too.

Is this a coincidence? Perhaps. The other big donors on both sides hail from a wide range of other business backgrounds, such as finance, real estate and manufacturing. But, if nothing else, the presence of those tycoons casts a spotlight on a fascinating cultural contradiction.

In some respects, the United States is a place that would prefer to sweep gambling out of public view, in line with its puritan past. During much of the country’s history, gambling has been explicitly banned. And even when it has been permitted or tolerated, it has almost always aroused unease and been pushed into the geographical and cultural margins of society.

In the mid-19th century, for example, gambling was permitted in Mississippi – but only on river boats that were separated from society at large. Then, in the 20th century, some states legalised gambling in certain regions, such as Nevada (in the 1930s) and Atlantic City (in the 1970s). A host of Indian reservations took advantage of their special legal status to do the same. Zoning laws made it relatively easy to keep this culturally and geographically ringfenced and thus for mainstream Americans to avert their eyes. Such ringfencing was made easier still because groups such as the Indian reservations deftly filled that economic and cultural niche (not unlike the way Jewish communities provided lending services to Christians in Europe 700 years ago, when lending also aroused ambivalence).

And yet in spite of this double-think – or, because of it – gambling carries powerful economic clout. According to the American Gaming Association, legal gambling revenues were $92bn in 2007 (the last published data). Out of that, $26bn came from those Indian reservation casinos. However, one of the most peculiar aspects of the whole gambling game is that government is involved too: state-run lotteries produced another $25bn of revenues. Commercial casinos, of the sort run by Adelson and Wynn, produced some $34bn of revenues, generating more than 350,000 jobs. (And that is before anyone even tries to calculate the growth of internet gambling, such as online poker.)

So does that mean it is time to accept the inevitable – and openly celebrate gambling? American society might seem to be moving that way: more regions are now legalising casinos, say, and they are becoming more visible and acceptable in mainstream life. But personally, that trend makes me wince. A few years ago, I visited Atlantic City and was left very uneasy by what I saw; though many punters were enjoying themselves, others had a pinched, glassy stare. What was particularly unnerving was that many of those pinched faces did not look wealthy at all; worse, they were gambling in a venue dotted with pawn shops and where free alcohol was constantly served. The casinos had clearly perfected the system to keep some players chained to the machines and tables until their last drop of financial blood had been spent.

Of course, many gaming fans would argue that this characterisation is unfair. I recently met with Gary Loveman, the thoughtful head of the Caesars group, who pointed out that it is hypocritical to criticise gaming for being good at sucking dollars out of customers, unless you also cast the finger at other businesses, such as retailers or food. Studies by psychologists suggest only a tiny proportion of the population can be defined as compulsive gamblers. These days the gambling industry is surrounded by a dense thicket of regulations, intended to keep criminals out of the business. And men such as Loveman say they have an incentive to treat consumers fairly. He claims, for example, that he would rather not serve free alcohol to customers as they play, but is prompted to do so by competitive pressures (ie without a ban, it is hard for one casino to break ranks).

Yet those contradictions remain. Adelson and Wynn may be big Republican donors, but the Republican Christian right is anti-gambling. Casinos might be mutiplying, but most American voters do not want to think about the morality, say, of serving free alcohol to gamblers. And government rules swathe the sector. Yet the state itself is reaping fat benefits by persuading (mostly poor) people to gamble, via lotteries.

The only thing that is clear is that all this ambivalence creates rich pickings for some; and, of course, revenues for the political machine, at a time when billionaires are ever more eager to spend money to influence how the wheel spins in the 2012 election game.

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