The Government's Selective Morality About Gambling

Steve Russell

Back in 2013, The New York Times carried a major report on a minor bust. Police nailed Nelson Urena, 50, from whom they seized 38 numbers slips and $1,924 in cash, and Felicita Guillen, 74, who coughed up 60 more slips and $113. Topping off this two-person crime wave, police also seized three video slot machines.

The arrests made the newspaper because the people who operate the numbers racket are, as a police lieutenant put it, “a dying breed,” killed off by state lotteries and the disinterest of the younger generations of gamblers.

Before the state lottery ran them out of business, police estimated there were 100,000 numbers workers who accounted for about 8,000 arrests a year in New York City. That estimate, meant to show economic impact of the numbers, overlooked the lawyers and all the public employees who processed 8,000 arrested persons every year.

What happened to people employed by the numbers racket will happen to people employed by the war on drugs. Easy come; easy go. The only reason to play the numbers after the lottery was available was that the lottery required a minimum bet of one dollar, and the numbers—the poor people's game—often took in wagers for pennies that paid off hundreds of dollars often enough to keep the suckers coming.

It’s state lotteries that most often opened up states to lawful casino gaming by Indian tribes, an application of the rule that states can apply criminal laws but not civil regulations on Indian land. Once any gambling was legal, the cow was out of the barn. Congress quickly passed the Indian Gaming Regulatory Act in 1988 in an effort to corral that cow and cut states in on the milk production.

To this day, most non-Indians and even some Indians believe the IGRA granted tribes the right to run casinos. That is nonsense. IGRA substantially limited a preexisting right. Biblically speaking, IGRA taketh away, not giveth.

For some reason, casinos in particular and gambling generally stir up Biblical speaking. Gambling promises something for nothing, and we are told that is immoral. Some people start gambling and can’t stop, and so destroy their lives. Sort of like yours truly and food. I thought my gluttony made me immoral, not restaurants, but I suppose I’m splitting hairs.

Split me the hairs that explain the difference between the numbers and the state lottery? Would it be that, for example, Texas lottery money was sold as earmarked for public education? If so, what’s the moral take on the legislature cutting public education to the bone and using lottery cash to stanch the bleeding?

Readers of my investment column in this publication are familiar with my claim that stockbrokers are upper-class bookies and Wall Street is the biggest casino in the US if not the world. Lesson one of investment is to balance risk and reward, both of which answer to the fickle finger of fate as much as intelligence or industry.

The Commonwealth of Massachusetts is about to have an election about gambling that will feature what The New York Times called “a multimillion dollar campaign” over what is best for the common man and woman.

Massachusetts authorized three casinos and a slots parlor in 2011, none of which are yet operating, and there is about to be an electoral showdown over a referendum on repealing the authorization.

The pragmatic argument will be that the northeastern US has a saturated market. That could very well be the case, but the government is not putting up the money to build the casinos, so the only skin off the government’s nose is there will not be a cut of the proceeds. Nothin’ from nothin’ leaves nothin’, as the bard put it.

New Jersey had twelve casinos at the beginning of this year and they are now down to eight. Casino revenues are down by half since 2006 and those Indian nations that put all their eggs in the gaming basket risk singing a sad song.

I can accept that how many casinos and where they are located are decisions too important to be left to the market. What I cannot accept is the moral argument, that poor people are poor in the first place because they are stupid and shiftless and must be protected from their urge to get something for nothing.

Something for nothing? I’ll give you one word that represents four, TARP, or Troubled Asset Relief Program, a massive bailout of high stakes gamblers (investment bankers) at taxpayer expense. While TARP was riding high, proposals to force those same gamblers to let holders of underwater mortgages stay in their homes provoked Rick Santelli’s famous rant from the trading floor where the gamblers roll for high stakes. Santelli’s rant is credited with launching the Tea Party by those who think it could have happened without the Koch brothers’ money.

The irony in denouncing the bad judgment of working people for gambling that the real estate bubble would not burst comes under the heading “you can’t make this stuff up.” It was gambling that blew up the bubble in the first place, and the answer is to bail out the perpetrators and lecture the victims about their moral failings?

The tea in Tea Party stands for Taxed Enough Already, and they have proved since the Santelli rant that their objection is to the cost of the social safety net—food stamps, Social Security, Medicare and Medicaid, Head Start, Pell Grants---all programs that bleed the “job creators” to support “losers.” The high stakes gamblers resent the penny ante gamblers

There’s a new social trend in low stakes gambling with programs that use the lottery model to encourage saving among people who don’t have much to save. The biggest, Save to Win, started in Michigan and has spread to Nebraska, Washington, and North Carolina. According to The New York Times, Save to Win has created 50,000 accounts containing savings of $94 million. Fund My Future uses a similar model to encourage teenagers to contribute to their own college funds.

Do these pro-social gambling programs encourage moral turpitude? It depends on whether you can stretch your mind around some meaningful distinction between a neighborhood crap game and hundreds of thousands wagered on whether the dollar is going to rise against the yen.

I admit bias because I come from the working poor, but it seems to me that when the swells gamble, it’s a much bigger deal, because they take so many others down with them if they lose. It’s that very argument that is used not to attack their morals, but to justify bailing them out of bad bets.

Reports on August 28 differed whether Maria Fernandes, 32, was working four jobs to make ends meet or three, but it’s beyond cavil that she stopped to catch a nap between gigs and died of carbon monoxide poisoning in a New Jersey parking lot.

Some people call Fernandes “the face of the recession.” To me, she’s the face of the working poor, which is to say virtually all poor people, who work like dogs and take home less of what they produce every year.

The same people who would bail out Donald Trump’s bad bets would put Maria Fernandes in jail if she bet on a sixty-cent numbers slip. It’s not the gambling itself that is immoral, but rather the size of the ante. If that’s how the game is played, deal me out.

Steve Russell, Cherokee Nation of Oklahoma, is a Texas trial court judge by assignment and associate professor emeritus of criminal justice at Indiana University-Bloomington. He lives in Georgetown, Texas.

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stevef's picture
Steve, I am impressed. I love the article. As one that works in the 'Gambling Industry', I agree with many of your points. I especially liked your discussion of IGRA....not a 'grant' but an attempt to build a dam before the floodgates opened up. I do disagree a bit with your list...I just don't think Social Security is the same as the rest of the items on the list that can be looked at as social welfare, but Social Security as I understand it was intended to be a forced savings account, to make sure I was not burdoning the workers in my old age.....because I would have the money I had invested in my name to live off for years to come. Have a great day, Steve