Casino Management: Crime and Gambling - Essay Example

? Casino Management: Crime and Gambling Casino Management: Crime and Gambling Introduction Modern dictionaries define ‘casino’ as a facility or simply a building where gambling activities especially, roulette and card games are played for money. The term ‘casino’ was derived from the Italian word ‘Casa’ that meant a small country villa, summerhouse, or a pavilion. Generally, casinos are built near or attached with hotels, retail shopping, or other tourist attractions. Legalization of casinos has become a topic for debate in the United States over the last decade because many people argue that socioeconomic consequences of casino gambling outweigh its financial benefits. In the United States, many states are now thinking of legalizing casinos with intent to resolve the existing high unemployment and budget deficits issues. The states believe that construction of casinos at tourist destinations would be an effective strategy to attract more domestic as well as global visitors and thereby to contribute to economic viability. Some casinos are famous for working with live entertainment programs like stand-up comedy, concerts, and sports items. It is estimated that there are nearly 900 casinos in the United States now and this number is increasing day by day since more states tend to legalize the operation of casinos. Presently, 38 US states allow some form of casino gambling and moderately low population density areas such as Los Vegas are best known for gambling. Although gambling has been legally restricted in the United States, its accessibility and intensity of participation is increasing progressively. In 2007, US’ gross revenues of $92.27 billion were generated from gaming activities. In addition, the 2006 financial data indicate that commercial casinos employed 354,000 employees and paid $5.2 billion in state and local tax. However, the casino gambling results in increasing crime rates, political corruption, and compulsive gambling. This paper will analyze “Crime and Gambling” associated with casinos and gaming within the United States. History of Casino Gaming In the United States, attitude towards gambling was enhanced during the British colonial period. In the earlier period of gaming history, any form of game involved dice and cards. By the beginning of the 18the century, gambling was considered as a recreational activity in the US. During this period, a number of gambling houses such as casinos were established in the American mainland, particularly in New Orleans. Historical information reveals that the US game sector was known for games like blackjack and poker in the 18th century. In that time, big-time gamblers widely employed the riverboats plying the Mississippi river as gambling houses. Since the state of California legally regulated the operation of casinos and gambling houses, the California Gold Rush quickly transplanted its gambling activities to San Francisco. The Gold Rush utilized the wealth acquired from gambling activities to establish well organized gambling houses and this practice eventually contributed to the economic boom of the Wild West. This time period is commonly referred to as Gold Rush era. Historians say that gambling got wide popularity at the time of settlement of the west and subsequently, large number of people began to participate in gaming activities. During this time, towns like Dodge City and Kansas City were all popular for their many posh gaming houses. In this era, western people considered gamblers as a respected class of society and this situation added to gambling popularity. After the turn of the century, many US states banned the gambling activities and this practice shut down a major revenue source of the United States. In 1910, Nevada criminalized gambling activities and subsequently, the state of California also followed the same approach. As the gambling was illegal in the US mainland also, gamblers relocated their activities to illegal card rooms, private clubs, and speakeasies. Such locations were generally situated in remote areas and therefore it was a difficult task for the police to prevent the people from enjoying both gambling and alcohol. The prohibition of gambling activities led to the growth of mafias and other organized crimes. This period is called prohibition era. The great depression during this prohibition era drove the country to rethink about the ban on gambling. As a result, many states legalized some forms of gaming like bingo in some cities to assist churches and other community groups to raise adequate funds though most forms of gambling remained illegal. Tremendous changes occurred when Nevada legalized gambling once again; other 20 states permitted racetrack betting. The stock market crash of 1929 put the United States to a huge economic crisis and this situation forced the country to legalize gambling in Nevada. Since enforcement of gambling regulations became more strict in many regions of the country after World War II, remote places like Las Vegas was centered to be the ultimate place for crime figures such as New York’s Bugsy Siegel. The “Bugsy” era was a milestone in the the US gambling history. The Bugsy era began in 1940s and the great casino gambling Las Vegas was established at that time by Benjamin Bugsy Siegel. The areas of the Las Vegas developed rapidly during 1950’s and this period also witnessed faster growth of illegal gambling empires like Galveston. Atlantic City in the state of New Jersey also took a favorable approach towards gambling activities as it realized the financial significance of gaming. In 1987, a landmark Supreme Court verdict in favor of casino operations opened the door for Native Americans to establish casinos within reservations. The court decision greatly boosted American gambling industry since it enabled several Native American casinos to effectively compete with the highly established Las Vegas casinos. With the emergence of internet technologies in the late 1990s, land-based casinos really struggled to survive the competition from online casinos. Although internet based casinos dominated American gambling industry, they could not completely eliminate the scope of land based casinos. This centuries-old casino history points to the fact that casino gambling activities would stay in the United States for a very long time. Casinos and gambling in the United States There are a good number of casinos in the United States and the country is the most lucrative for a traveling gambler. The US’ Casino Map is available in the internet and it assists an individual to easily find casino gambling locations in the country. As stated in World Casino Directory, the US casinos mainly offer most popular casino games such as blackjack, poker, and craps (‘Welcome to United States’). In Nevada, gamblers can find casinos in each and every corner of the city as this region contains more casinos than any other state in the United States. Legal authorities report that Las Vegas and Nevada are the fertile lands for gamblers since both of them have over two thousand slot machines as well as many popular casino table games. New Jersey is another popular state in the United States for casino gaming; many domestic and global tourist gamblers play in Atlantic City, New Jersey. Many American casinos are Native American Indian casinos such as Cliff Castle Casino which offers over five hundred slot machines and casino table games (World casino directory). Likewise, dog racing is a popular form of gambling in Arizona. In addition to this, a number of other states in the USA including Michigan have Indian casinos. The US casinos are something different from other casinos and hence gamblers from the entire world come to the United States to engage in gaming. In total, the US casinos have a prominent place in the casino gambling industry. Crime and gambling Daily news and reports indicate that gambling and crime are highly associated with each other. In other words, many of the gambling sites are operated by criminals. It is said that when some US states liberalized gambling restrictions, criminals were the first to set up legal gambling houses. In recent days, the increased criminal activities related to casino gambling have put the country at a greater risk. Various surveys unanimously report that over 50% gamblers commit crimes. Official authorities opine that problem gamblers’ majority crimes are fueled either by their need to acquire money to gamble or to pay debts related to gambling. Likewise, a large proportion of pathological gamblers commit crimes as a direct result of issues arising from gambling activities. The most threatening issue is that gamblers involve in cyber crimes and hence it is very difficult for the authorities to effectively prevent gambling crimes. Statistical data show that there are 68.8% severe problem gamblers who illegally acquire money to pay for gambling admission or to repay gambling debts whereas moderate problem gamblers represent 26.3%. According to the reports of Georgia State University, “life time correctional costs of problem gamblers in the current Georgia population have been estimated at $249,159,000” (‘Gambling and crime’). Therefore, casino gambling is strictly regulated in United States these days. However, the America has not brought casino gaming industries under control yet. Among the gambling related crimes, political corruption seems to be the most serious issue as it may act as a growth impediment to the whole nation. Increased crime rates associated with casino gambling can be attributed to the large amounts of cash involved in such activities. Generally, gambling operations deal with large amounts of money and it provides gamblers the opportunity for skimming and money laundering. Since dealers do not need to continually invest their chips and money while gambling, it raises opportunities for fraud. Clubs allow employees to gamble when they are not working and this situation probably leads to collusion. Since the gambling activities include ranges of other risks such as credit abuse, currency transaction violations, and card cheating, this activity raises potential threats to the security of casino gambling. Similarly, skimming is found to be the most significant problem associated with casino gambling; this fact has been also certified by the Kefauver committee. This issue may sometimes occur along with credit granting also. In the early 1960s, many casino owners were indicted for tax evasion. The issue of money laundering can also be a potential threat to casino gambling. Bettors often deal with large amount of cash in order to purchase chips which are then labeled as “winnings” and this practice make the money legal. In centers like California, it is very difficult to dispute claims of large winnings because the house is not the banker in such places. Federal laws demand that currency transactions worth $10,000 or above including multiple transactions which exceed $10,000 have to be reported. Sometimes operators may receive kickbacks in various situations for money laundering and this practice challenges the proper conduct of casino gambling. In short; skimming, money laundering, and kickbacks are identified as some of the major current issues associated with casinos and gaming. Illegal gambling Various experts opine that illegal gambling accounts for roughly $100 billion per year. Among the illegal gambling, sport betting is more popular and it involves a large portion of illegal gambling money. As reported in msnbc.com, recently, federal prosecutors indicted three largest Internet poker companies including Full Tilt Poker, Absolute Poker, and PokerStars for deceiving banks to process billions of dollars from illegal betting (“U.S. charges 3 big poker sites”). Illegal gambling was prevalent in the United States since the prohibition era (1919-1933). During the prohibition era, organized crime including the sale of illegal beer and alcohol made huge profits. When the federal government legalized the sale of alcoholic drinks, organized crime turned to new means of illegal activities. Various researchers hold the view that illegal gambling accounted for majority organized crime until the 1970s. The risk elements associated with the illegal gambling went up when the United States legalized many forms of gambling. However, some forms of gambling still continue to be illegal and raise challenge to the socio-economic structure of the United States. The main difference between illegal gambling and friendly gambling is that the former has prize, consideration, and chance elements. The Federal Crime of Gambling clearly defines illegal gambling. Illegal gambling business 1. “is a violation of the law of a State or political subdivision in which it is conducted 2. Involves five or more person who conduct, finance, manage, supervise, direct, or own all or part of such business; and 3. Has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any singly day” (as cited in Gardner & Anderson, 2011, p. 482). Issues related to casinos and gaming Increasing crime rates are the main issues in casinos and gaming in the present the US society. Official reports emphasize that casino gambling directly leads to significant increases in crime. While considering the crime impacts and additional expenses incurred, it is clear that negative sides exceed the benefits of casino gambling and hence the resultant issues impose substantial burdens on the population. Since the casino gambling fails a cost-benefit test, policymakers really struggle to determine tax rates. Generally, researchers employ two methods to identify the connection between casino gambling and crime rates. The first is the analysis of pathological and problem gamblers and second is the statistical analysis of crime numbers. Pathological gambling is an impulse control disorder and pathological gamblers are characterized with a number of common features such as repeated failures to resists the gambling urge, increased reliance on others, and committing of illegal acts to pay gambling/gambling debts. Problem gamblers also have similar issues but to a smaller degree. According to Grinols (2000), in the areas where casino gambling is available, pathological gamblers represent one or two percent of the population while problem gamblers constitute another two to three percent. The author clearly explains the relationship between casino gambling and crime rates by referring to some recent study statistics. Grinols reports that 62% gamblers committed illegal acts as a result of their gambling. According to Maryland Department of Health and Mental Hygiene survey in 1990, 80% gamblers committed civil offenses whereas 23% were indicted for criminal offenses. A survey on 400 anonymous gamblers showed that 57% of them admitted robbery to finance their gambling. The Institute of Problem Gambling indicates that a gambler stole $135,000 on average and the total amount involved in robbery was over $30 million. As per the National Gambling Impact Study Commission’s final report, among the individuals who did not gamble only 7% had ever been incarcerated. In contrast, 21.4% (three times the above figure) pathological gamblers had been incarcerated at any point during their life period. Researches indicated that an average problem gambler imposes $10,112 per year on the society and this cost includes policing, apprehension, adjudication, and incarceration costs. Nearly 42% of this cost represents crime costs (Grinols, 2000). The statistical analysis of effect of casinos on crime would be a comprehensive measure to evaluate the relationship between casino gambling and crime because this method is direct and more inclusive. The major disadvantage of this method is that it is a cumbersome task to distinguish the share of casino related crimes from other crimes which occur all the time. In addition, since the impacts of casinos may differ from region to region, a large sample is required to effectively pinpoint the truth. In order to identify the relationship between casinos and crime, the University of Illinois and the University of Georgia jointly conducted a research. The research outcomes reflected that the 12.4% of the crime observed in casino countries could have been eliminated if casinos were absent (Grinols, 2000). Recent experiences affirm that imprisoned fellows with an alcohol or drug indictment are more likely to have a gambling background. Nearly over 80% pathological gamblers are vulnerable to the risk of drug or alcohol abuse. Survey results indicate that majority offenders assessed as having a gambling problem hardly get proper treatment or help from external sources. As the gambling problem becomes more sever, it would be extremely difficult to quit without external help. To illustrate, 44% problem gamblers informed that they were able to stop gambling without external help whereas this figure was only 21% in the case of pathological gamblers. Another issue is that most addicted gamblers are unaware of their disorder (Georgia State University). Murders and assaults associated with casinos question the long term sustainability of this industry. For instance, as Booth reports in The Washington Post (Agust 26, 2011), the terror attack at a Mexican casino on 25th August 2011 killed 53 people including gamblers and employees and injured many people. Official reports show that often casino gambling leads to assaults and murders. Similarly, sexual assaults toward women are also common in casinos. In other words, crime rates are noticeably higher in places where gambling is allowed. Major reason behind this issue is that tourists from the entire world arrive at casinos to participate in gambling. One of the major insidious effects of casino gambling is that sometimes it would influence individuals to engage in compulsive gambling. Various studies indicate that some people get addicted to gambling and consequently they would be willing to pay more for gambling. It is estimated that 5 percent casino gamblers are addicted and they generate 25% of the casinos’ profits. A number of economic studies have revealed the fact that a casino’s net value to a community is actually negative. It seems that government has not yet designed policies regarding ownership structure, internal control measures, and corporate governance of casinos and this condition seems to be a great issue in the current environment. Likewise, there are no strict regulations on the ground of products and services offered or clients served. In addition, casino institutions offer financial services generously to clients and this in turn would adversely affect the casino industry in the long run. In the modern days, corruption is the most serious threat in casinos and gambling as this may lead to subsequent violence activities. Gamblers tend to evade tax payments, which may cause huge economic loss for the government. Several studies show that increasing gang and gun crimes in the United States have a direct relationship with casino gambling. Many experiences show that problems in the casinos often lead to gang fights which appear to be a threatening issue in the United States. In total, current issues in casinos and gaming raise a series of challenges to the socio-economic as well as political aspects of the United States. Socio economic impacts of casinos and gaming Majority economists hold the view that the casino gambling points to ranges of social costs including direct and indirect costs. Direct costs include governmental cost of regulating casinos and gambling activities and providing social services. In the opinion of Grinols (2000), indirect costs represent expenses of bankruptcy, lost economic output, suicide, harm to families, illness, and crime. However, the indirect costs associated with casino gambling have not been identified completely yet because the research to calculate the size of these costs is still in its initial stages. Researchers now vehemently try to identify the costs imposed on the society as a result of seven Index I crimes tracked by the FBI including “larceny, burglary, auto theft, robbery, aggravated assault, rape, and murder”. It is observed that all these seven crimes are associated with casino gambling. Problem gamblers mainly commit white collar and non-violent crimes with intent to attain money for purposes related to gambling. The statistical data show that 60.3% gamblers issued bad checks whereas 30.1% stole from the workplace. It is also observed that non-gamblers are arrested seven times less often than pathological and problem gamblers. Hence, it is obvious that casino gambling increases governmental regulation costs and this subsequently imposes additional costs on public. Due to the increased level of gambling activities among the youth, the US society has failed to utilize its youngsters’ abilities for productive purposes. For instance, youngsters who are influenced by the gambling activities do not pay adequate attention to their academic studies. Increased casino gambling and related gang crimes would significantly impede the economic growth of a country. In addition, illegal gambling associated transactions of huge volume of money may adversely affect the inflation level of the country. Obviously the alarming increase in illegal gambling and gambling crimes would also spoil the cultural image of the nation. Regulators hold the view that casinos must be taxed with by an amount equal to the expenses that they inflict on society. If regulators implement this policy, some casinos would surely go out of business. In order to overcome the far reaching consequences associated with casino gambling, various states have taken a strict stance towards illegal gambling and related crimes. Effective policing would help eradicating the intensity of casino gambling crimes to some extent. For this purpose, the governmental authorities must intervene in the casino operations to effectively prevent issues such as tax evasion and credit fraud. In addition, it is advisable for the nation to regulate the casino operation by monitoring the products and services offered and clients served. Furthermore, financially unstable individuals must not be allowed to participate in casino gambling as the gaming activities involve high level of risks. Conclusion The casinos and gaming activities involve an array of socio economic, legal, and cultural issues. The history of gambling dates back to 18th century; and places like Nevada has a historical significance in American casino gambling industry. Although casino gambling offers some economic benefits to the country, it on the other hand imposes a huge amount of indirect cost on the society. The most threatening problem of casino gambling is that it directly relates to crime such as murders, assaults, robbery, and fraud. Since majority of casinos in the country are located in tourist destinations, gamblers include individuals across the globe and this increases the chance of violence. Studies show that the current crime rate could have been reduced to some extent if there were no casinos in the country. Gamblers mainly include pathological as well as problem gamblers and the former groups are more addicted to gambling activities. Higher involvement of youth in casino gambling and crimes raises serious challenges to the United States. Effective governmental intervention is essential to mitigate the impacts of casino gambling. References Booth, W. (26 Aug, 2011). “Mexico blames U.S. drug culture, guns for casino massacre”. The Washington Post. Retrieved from http://www.washingtonpost.com/world/americas/calderon-mexico-casino-fire-deaths-act-of-terrorism/2011/08/26/gIQAmnVEgJ_story.html Gardner, T. J & Anderson, T. M. (2011). Criminal Law. US: Wadsworth: Cengage Learning. Grinols, E. L. (2000). “Policy forum: Casino gambling causes crime”. IGPA: University of Illinois, 13(2), 1-4. Retrieved from http://www.netnebraska.org/television/news/ne_connects/gambling/CasinosCrime.pdf Gambling and crime. (n.d). Georgia State University. Retrieved from http://www2.gsu.edu/~psyjge/Fact/PG_%20Crime_04_10.pdf “U.S. charges 3 big poker sites with fraud, illegal gambling: Action is government’s most aggressive move yet to try to choke off online betting”. (April 2011). Msnbc.com. Retrieved from http://www.msnbc.msn.com/id/42613518/ns/us_news-crime_and_courts/t/us-charges-big-poker-sites-fraud-illegal-gambling/ Welcome to United States. (n.d). World Casino Directory. Retrieved from http://www.worldcasinodirectory.com/american-casinos.asp Read More