cash cow and a sack of heartache

7252019 Cash Cow and a Sack of Heartache

httpslidepdfcomreaderfullcash-cow-and-a-sack-of-heartache 19

8

CASH COW

SACK OF HEARTACHE

and 983137

The wages of gamblingrsquos pervasive influence in Montana

BY ALAN KESSELHEIM

PHOTOGRAPHY BY THOMAS LEE

e all know one right Likely as not wersquore related to one

The friend who heads out shopping for groceries and comesback hours later with no food and no money The guy at the

Christmas party who disappears early and after midnight

driving home you see his car in the casino parking lot The brother-in-law who

one year drives a BMW and lives in a fancy house and the next moves in withhis parents The cousin who somehow loses his home despite working a good

job and along the way also loses his marriage and the custody of his kids

The guy who keeps heading off on mysterious business trips and pops back up

weeks later flat broke and looking like hersquos been at a month-long bachelor partyThe co-worker convicted of embezzling to support her gaming addiction

W



9M O N T A N A Q U A R T E R L Y



10

Or Will who I met recently in a local coffee shop and who

set the record for the fewest questions I ever asked during an

interviewldquoSo whatrsquos the back storyrdquo I started His answer took just

under three hours

More on Will in a minute

According to Montanarsquos constitution gambling remains

an illegal activity as it has been since 1889 But during the

Montana Constitutional Convention of 1972 the door was

opened with a referendum allowing the legislature and the

people to approve or disapprove gambling activities Starting the

very next year that is precisely what the legislature did In factitrsquos as if they were just waiting for that crack of opportunity

In 1973 the Montana Legislature passed the Card Game

Bingo Raffles and Sports Pool Act In 1976 keno was legalized

as a form of ldquolive bingordquo In 1985 the Video Poker Machine Act

was passed allowing five poker machines per liquor license and

live keno By the next year 1986 there were 2887 licensed

video gambling machines in the state Also in 1986 the

Montana Lottery was approved In 1991 the poker machine limit

was raised from five per liquor license to 20 And it keeps goinglike thatmdashmore machines more games more loopholes

It is worth noting that the people have not been as eager as

the legislature to usher in gambling when given a voice In 1950

and again in 1983 initiatives to legalize or expand gambling

were defeated by wide margins The only exception was the

voter passage of the Montana Lottery in 1986 on the promise of

reduced property taxes

To be fair for the better part of last century while gambling

was criminalized you can bet it was going on like gangbustersat small-town card tables sports pools and illegal gaming

halls Itrsquos also true that gambling has been with us since prehis-

tory when people circled up to throw bones in the dirt and is

unlikely to go away legal or not Hell you could argue that it is

with us in the biggest legal casino of all time that one we call

Wall Street

These days gambling seems to be everywhere under the Big

Sky It feels like every third commercial during a football game

promotes online sports betting I cringe each time thinking of

friends and family for whom a couple hundred extra dollars isalways deeply seductive Neon casinos sit garishly on Indian

land Gaming machines line up pinging and beeping and flash-

ing in bars and gas stations Lottery tickets at grocery stores

Scratch cards Live card tables Horse tracks Town Pump alone

runs some 70 casinos under the banners of Lucky Lilrsquos Montana

Lilrsquos and Magic Diamond At this point Montana has steered

clear of ldquopit gamesrdquo like blackjack or craps but wersquore all in

when it comes to poker machines and their ilk And who knows

what new inventive ways to wager will rear up on the wide-openfrontier of online gaming

Montana reflects the national trend Before 1989 commer-

cial casinos were only legal in Nevada and Atlantic City Several

court decisions in the late 1980s opened the door and by 1995

commercial gambling was legal in eight states By 2010 that

expanded to 13 tribal casinos were operating in 30 states river-

boat casinos became popular in the Midwest and South and

state lotteries morphed into revenue generators complete with

advertising campaigns and hyped-up jackpots In 2013 lotteryticket sales alone came to $68 billion in the United States more

than six times the $109 billion earned by movie ticket sales the

same year

Why this tidal wave of legalization Well the short answer

is that there is money to be made by preying on the publicrsquos

gambling proclivities taxes to be gathered and that is really

really hard to resist

How much money

Currently Montana collects on the order of $60 million fromvideo gambling machines every year far and away the biggest

gaming tax generator Add to that roughly $12 million annually

from the state lottery which since 1987 has contributed $229

million to state coffers More than $5 million is collected from

permit fees and smaller amounts trickle in from live card table

licenses racetracks and other gambling outlets So somewhere

a bit south of $100 million in Montana tax revenue every year

More than make it easy we promote it Ad campaigns feature the fun of it all that shimmering chance of being the next bigwinner They tout worthy causes like education or open-spacefunding making it almost our civic duty to participate

Comfortable chairs await gamblers at many Montana casinosmdashpart of the service package that can make time in front of a video gaming machine pass

quickly The money passes quickly too with some machines generating as much as $120 a day for their owners






12

comes out of the pockets of those of us who hunch in front of poker machines or buy

a lottery ticket every time we shop for groceries or play at a licensed card table

How that tax revenue gets parsed out is a bit of a thicket Gambling has been regu-

lated by the Montana Department of Justice since 1989 After what came to be knownas the ldquoBig Billrdquo was passed and put into practice by the Montana legislature in the

early 2000s gambling revenues were rolled in with other general state funds and

ever since the state has dispensed it to cities and counties through various formulas

depending on which pot itrsquos pulled from and which way the political winds are blowing

Back in 1998 a University of Montana Bureau of Business and Economic

Research study funded by the Montana legislature found that gaming revenues

provided an average of 144 percent of city tax revenues across the state In some

communities gambling income contributed nearly 25 percent of the municipal

budget Itrsquos gotten more complicated since but gambling tax revenue at both thestate and local level is a significant slice of the pie

ldquoThe legislature plays with the formula all the timerdquo says Anna Rosenberry

Bozeman City Finance Director ldquoFrom year to year they add here and subtract

there You never know how itrsquos going to come inrdquo

According to DOJ figures the state collects roughly $2 million a year from

gambling in the city of Bozeman for example Of that the city might get $700000

Rosenberry calculates that gambling tax revenue currently funds 4-5 percent of

Bozemanrsquos tax base

As a side note Rosenberry remembers working for a local Lucky Lilrsquos as anaccountant while she was in college ldquoIt was sadrdquo she says ldquoThis is not the well-off

funding our tax base These are people who are already in difficult circumstances

Yes yoursquore taxing a choice people make freely but when I see the impacts on soci-

ety I donrsquot know if itrsquos a good traderdquo

Of course there are more equitable and less fraught ways to raise taxes espe-

cially in a state rolling in tourists Sales tax for one as well as gasoline taxes or more

liberally applied resort taxes all of which would capitalize on the tourism trade But

tax talk in Montana is a political no-no and those options donrsquot get much play

Bozemanrsquos mayor Carson Taylor worries about ldquohow much we are encouraging

gambling and facilitating problem gambling by making it so easyrdquo

More than make it easy we promote it Ad campaigns feature the fun of it all

1999$25 million

$30 million

$35 million

$40 million

$45 million

$50 million

$55 million

$60 million

$65 million

$70 million

2000 2001 2002 200 3 20 04 2005 20 06 2007 20 08 2009 2010 2011 2012 2013 2014 2015

The Gamble Pays OffmdashAt Least for the StateFiscal year tax collection on video gambling machines in Montana

Source Montana Department of Justice




that shimmering chance of being the next big winner They tout

worthy causes like education or open-space funding making it

almost our civic duty to participate They show people rolling inpiles of money with four-leaf clovers floating in the air Never

mind that the odds of any one of us winning the lottery are akin

to being struck by lightning while being devoured by a shark

Like nil And sorry to say the machines that are the real cash

cows they are programmed to win for the house Thatrsquos just

how they work

ldquoYoursquove heard the sayingrdquo Taylor says ldquoGambling is a tax on

people who canrsquot do mathrdquo

ldquoIs this like soft drinks in schoolsrdquo he wonders ldquoSome say

itrsquos a matter of free choice others that it is preying on a sector of

societyrdquo

Which brings us back to Will with whom it becomes clear

that being able to do math is the least of it

ldquoIt started when I was maybe 7 years oldrdquo he says ldquoMygrandmother a problem gambler herself would take me with her

to horse races on weekends and then to the bingo hall All day

long it was horses bingo and drinking

ldquoMy uncle was a problem gambler too He committed suicide

after a big loss Yoursquod think that would have stopped me but

I ended up kind of emulating himmdashhard living drinking

gamblingrdquo

ldquoWhen I was 18 or 19 living in Iowa just across the river

from the track I got into horse racing myself That was when

I started pawning things to pay for the daily-double It began

to consume merdquo he admits ldquoI got suspended from high school



14

for running a football pool trying to be Jimmy the Greek or

somethingrdquo

As Willrsquos story unfolds his hands move delicately around his

coffee mug He looks straight at me while revealing the depths of

his depravity His recovery demands this level of full confession

this unvarnished no-excuses litany of the ways his addiction to

gambling utterly dominated his life and choices

His saga careens from the Midwest to Santa Fe to Great

Falls and West Yellowstone Los Angeles and New Orleans

Minnesota and South Dakota His life was a repeating cycle of

new starts clean living and then some trigger setting him off

into a spiral of marathon gambling blackout drinking sprees

trouble with the law

Remarkably Will kept landing solid jobs managing restau-rants and bars working at hotels Along the way he fell in love

got married had a daughter But every time something would

pull him back down He robbed a hotel in Montana and set off

on a gambling spree to the West Coast He borrowed money from

a friend and lost it all in the slots He got in trouble with book-

ies always needed money Whenever he got some cash it would

all vanish into slots or sports betting or horseracing or scratch

cards didnrsquot matter whatever was on

ldquoOne time I blew an entire $1300 paycheck in eight hourson one machinerdquo he remembers

ldquoThe gambling industry isnrsquot making their big bucks off of

occasional recreational mom-and-pop gamers Itrsquos people like

me who feed $20 bills into the machines until theyrsquore all gonerdquo

Willrsquos marriage dissolved He found himself at various rock-

bottom points standing on a high dock outside of New Orleans

or holding a sharp knife in a Great Falls alley wanted nothing

more than to end his life but then lacking the will to go through

with it Once he drank a cocktail of bleach vodka cocaine andwhiskey but the neighbors called the police and rushed him to

the hospital

There were homeless shelters counselors drugs to control

his impulses stints in jail rehab centers He lived in apart-

ments with no furniture because everything had been pawned

to support his habit He missed his daughter People tried to

help himmdashhis mother a mentor friends Others brought him

down by their own bad habits His life was a spinning whirlpool

of helplessness in the cycles of addiction

ldquoThank God for my momrdquo Will says ldquolsquoYoursquoll always be my

sonrsquo she kept telling me She never gave up My dad he finally

had enough I canrsquot blame him But my mom ended up buying

me a ticket back to Great Falls where I stayed in a homeless

shelter got a job eventually got some helprdquo

ldquoIrsquove been gambling free and sober since October 12 2014rdquo

he says ldquoMy longest run ever Itrsquos hard I still sometimes miss

it but Irsquom on a mission now to do something about gambling inMontana Irsquom not naiumlve but itrsquos part of my recovery Irsquove started

a campaign Irsquom speaking publicly at libraries and Rotary

Clubs meeting with politicians sharing my story collecting the

stories of others

ldquoThis is my way of paying back On one level itrsquos also selfish

because it helps me stay free

ldquoMy goal is to stand in front of the 2017 Montana legislative

session and make a plea that 10 percent of gambling revenue be

set aside for treatment programs run by the state Right now the

state doesnrsquot put a dime into treatment

ldquoLook I understand that you arenrsquot going to stop gambling

ldquoGambling has always been with us Itrsquos deep within our characterfrom frontier days part of the western tradition As long as itrsquos out

there we might as well fund worthy causes by taxing itrdquo

Will one of an estimated 10000 pathological gamblers in Montana sayshe wants to see the state divert some of its revenue toward treatment

options for people with gambling problems



M O N T A N A Q U A R T E R L Y 15

But when you put casinos on every corner poker machines in

every bar and gas station you are forcing a temptation on the

populace

ldquoAnd whorsquos in charge of treating problem gambling inMontanardquo he asks ldquoThe Montana Tavern Association Thatrsquos

who funds the problem gambling hotlinerdquo Actually the MTA is

joined by the Gaming Industry Association Town Pump and the

Montana Coin Machine Operators Association in that funding

pool but his point stands

Will qualifies as a pathological gambler Roughly 1 percent

of the general population falls into that category Another 3-4

percent are problem gamblers Sounds small but in Montana

with a million people wersquore looking at 10000 pathological

gamblers and perhaps 40000 with a problem Take Willrsquos life

and the troubles associated with it and imagine the personal and

social mayhem when you do that math Beyond that studies show

as much as 80 percent of problem gamblers never seek treatment

and remain off the public radar

ldquoLookrdquo says Mark Staples former lobbyist for the Montana

Tavern Association ldquoGambling has always been with us Itrsquos

deep within our character from frontier days part of the westerntradition As long as itrsquos out there we might as well fund worthy

causes by taxing itrdquo

Rosenberry Bozemanrsquos finance direc-

tor agrees that perhaps gambling should

help pay for some of the social impacts

that come as a result of problems asso-

ciated with itmdashthings like court costs

criminal investigations jail time

ldquoIrsquove noticed that if you dig deepenough into cases of fraud or embezzle-

mentrdquo she says ldquoGambling is usually

somewhere in the picturerdquo

Gambling proponents tout the

employment boost provided by the indus-

try and the worthy causes funded as

a result of the tax collections Studies

on the long-term economic impacts of

gambling are more muddyA 2011 study headed by Douglas

Walker at the College of Charleston

South Carolina found that ldquoCasino

gambling has a short-run stimulus effect

but in the long-run hellip casinos actually

detract from state government revenues

perhaps due to a large substitution away

from other types of spendingrdquo

Coming to grips with accurate esti-

mates of the social costs of problem

gambling is a challenge There are five

or six studies out there that make the attempt including Walkerrsquos

but their numbers can differ by a factor of 10 Strict interpretations

of the direct costs of problem gambling come in as low as $2000

per year per gambler Those that take a more inclusive approachand incorporate things like missed days of work bankruptcy court

divorce court lost productivity hellip come in at nearly $20000 per

year

That same 1998 University of Montana study that quanti-

fied city funding through gaming also found statistical correla-

tions between gambling and vandalism burglary larceny DUIs

weapons offenses and robbery Beyond that how do you put

value on more slippery mundane stuff like mom not being home

at night to help children with homework or a kidrsquos malnutrition

because the food money went into the poker machine

Ray Rasker with Headwaters Economics cites Paul

Krugmanrsquos work on ldquoopportunity costsrdquo These are tangential to

the standard costbenefit tallies

ldquoIn the case of gamblingrdquo says Rasker ldquoYoursquod look at the

person who goes out and drops $300 in poker machines instead

of going to the hardware store to buy supplies to make a deck Or

take the family to dinner or go to Yellowstone National Park helliprdquoldquoEconomists talk about the loss of productivity in both time

and workrdquo says Rasker ldquoNever mind time spent with kids or

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more positive activities Those are real costs but tough to put a

dollar figure onrdquo

ldquoI used to work out in a gym that was right next to a casinordquo

Rasker remembers ldquoIrsquod come out after my workout an hourspent with people committed to being fit and see that line of

folks heading in to gamble Middle of the morning Beautiful

day What a contrastrdquo

Treatment for problem gambling in Montana is both complex

and in its infancy Eleanor Wend Licensed Addiction Counselor

for Alcohol and Drug Services of Gallatin County decries the

lack of funding It wasnrsquot until 2013 that Montana started to

include gambling as an addiction and people who seek treat-

ment still have to pay out of pocket for services

ldquoWe developed lotteries installed machines encouraged

casinos before we understood the ramificationsrdquo Wend says

Part of whatrsquos complicated about gambling addiction is that it

is often a web of issues co-occurring with drug and alcohol use

and strongly correlated with PTSD

Wend refers to studies that found the same areas of the brain

lighting up in response to gambling stimulation as with cocaine

use Some military veterans and other victims of PTSD lock intogaming machines as an outgrowth of life traumas and out of the

need to escape their reality Wend reports

ldquoItrsquos about isolationrdquo says Rory Berigan director of the

Fellowship Hall in Bozeman which sees a constant flow of 600

people per week attending various support groups from Gamblers

Anonymous to AA from sex addicts to binge shoppers

ldquoWhen people are sitting in front of those machines they are

gone they have left their bodies And the sad thing is that some

people really need that escaperdquo she saysRetired cop Rick Gale who works in drug prevention in

Gallatin County mentions the push by casinos to build ldquobutt

hutsrdquo outside of no-smoking establishments as an example of the

unrelenting effort to capitalize on weakness

ldquoThey propose building this lean-to shelter that is technically

not a building and installing gaming machines so you donrsquot

have to take a break when you go outside for a smokerdquo he says

Gale talks about the conf luence of drugs alcohol and

gambling at casinos where young people gather late at night toescape the notice of law enforcement and make drug deals or

indulge their bad habits while risking the seduction of gambling

addiction

ldquoThere are people leaving their kids in the car in the middle

of the night while they go into a casinordquo adds Wend ldquoYou hear

of casinos sending buses to assisted living facilities the same

day that residents get their Social Security checks They bring

them to the casino They feed them They give them free drinks

And then they take their moneyrdquoldquoAt some pointrdquo says Gale ldquoYou start to ask yourselfmdashwhat

are we doingrdquo

16

How It Plays OutA glance at fourth-quarter fiscal year 2015 video game machine tax revenues

City Revenue +- $ per resident

Belgrade $202185 +1 $259 3

Billings $264558 8 +1 $2430

Bozeman $47766 8 -1 $1147

Columbia Falls $174553 +6 $3723

Deer Lodge $89374 +6 $2873

Dillon $86942 +5 $2103

Glendive $182952 -23 $2613

Great Falls $1307494 -4 $2210

Hamilton $194618 -6 $4476

Havre $232013 -5 $2492Helena $741060 -8 $2475

Kalispell $605939 -9 $2816

Laurel $21323 7 +11 $3074

Lewist own $118254 -10 $2016

Livingston $159412 +5 $2200

Miles City $263024 -6 $3003

Missoula $1144401 +3 $1639

Sidney $273047 -23 $4218

Whitefi sh $107721 -11 $1569

mdashfrom the fourth quarter in 2014mdashbased on the most recent Census population estimate

Sources Montana Department of Justice US Census Bureau






10




under three hours




























Wall Street






















same year





How much money
















12































1999$25 million

$30 million

$35 million

$40 million

$45 million

$50 million

$55 million

$60 million

$65 million

$70 million

2000 2001 2002 200 3 20 04 2005 20 06 2007 20 08 2009 2010 2011 2012 2013 2014 2015













how they work





societyrdquo









gamblingrdquo







14


somethingrdquo





























the hospital


















stories of others

















populace

















































year



























































addiction







are we doingrdquo

16



Belgrade $202185 +1 $259 3

Billings $264558 8 +1 $2430

Bozeman $47766 8 -1 $1147


Deer Lodge $89374 +6 $2873

Dillon $86942 +5 $2103

Glendive $182952 -23 $2613

Great Falls $1307494 -4 $2210

Hamilton $194618 -6 $4476

Havre $232013 -5 $2492Helena $741060 -8 $2475

Kalispell $605939 -9 $2816

Laurel $21323 7 +11 $3074

Lewist own $118254 -10 $2016

Livingston $159412 +5 $2200

Miles City $263024 -6 $3003

Missoula $1144401 +3 $1639

Sidney $273047 -23 $4218

Whitefi sh $107721 -11 $1569








12































1999$25 million

$30 million

$35 million

$40 million

$45 million

$50 million

$55 million

$60 million

$65 million

$70 million

2000 2001 2002 200 3 20 04 2005 20 06 2007 20 08 2009 2010 2011 2012 2013 2014 2015













how they work





societyrdquo









gamblingrdquo







14


somethingrdquo





























the hospital


















stories of others

















populace

















































year



























































addiction







are we doingrdquo

16



Belgrade $202185 +1 $259 3

Billings $264558 8 +1 $2430

Bozeman $47766 8 -1 $1147


Deer Lodge $89374 +6 $2873

Dillon $86942 +5 $2103

Glendive $182952 -23 $2613

Great Falls $1307494 -4 $2210

Hamilton $194618 -6 $4476

Havre $232013 -5 $2492Helena $741060 -8 $2475

Kalispell $605939 -9 $2816

Laurel $21323 7 +11 $3074

Lewist own $118254 -10 $2016

Livingston $159412 +5 $2200

Miles City $263024 -6 $3003

Missoula $1144401 +3 $1639

Sidney $273047 -23 $4218

Whitefi sh $107721 -11 $1569













how they work





societyrdquo









gamblingrdquo







14


somethingrdquo





























the hospital


















stories of others

















populace

















































year



























































addiction







are we doingrdquo

16



Belgrade $202185 +1 $259 3

Billings $264558 8 +1 $2430

Bozeman $47766 8 -1 $1147


Deer Lodge $89374 +6 $2873

Dillon $86942 +5 $2103

Glendive $182952 -23 $2613

Great Falls $1307494 -4 $2210

Hamilton $194618 -6 $4476

Havre $232013 -5 $2492Helena $741060 -8 $2475

Kalispell $605939 -9 $2816

Laurel $21323 7 +11 $3074

Lewist own $118254 -10 $2016

Livingston $159412 +5 $2200

Miles City $263024 -6 $3003

Missoula $1144401 +3 $1639

Sidney $273047 -23 $4218

Whitefi sh $107721 -11 $1569





14


somethingrdquo





























the hospital


















stories of others

















populace

















































year



























































addiction







are we doingrdquo

16



Belgrade $202185 +1 $259 3

Billings $264558 8 +1 $2430

Bozeman $47766 8 -1 $1147


Deer Lodge $89374 +6 $2873

Dillon $86942 +5 $2103

Glendive $182952 -23 $2613

Great Falls $1307494 -4 $2210

Hamilton $194618 -6 $4476

Havre $232013 -5 $2492Helena $741060 -8 $2475

Kalispell $605939 -9 $2816

Laurel $21323 7 +11 $3074

Lewist own $118254 -10 $2016

Livingston $159412 +5 $2200

Miles City $263024 -6 $3003

Missoula $1144401 +3 $1639

Sidney $273047 -23 $4218

Whitefi sh $107721 -11 $1569








populace

















































year



























































addiction







are we doingrdquo

16



Belgrade $202185 +1 $259 3

Billings $264558 8 +1 $2430

Bozeman $47766 8 -1 $1147


Deer Lodge $89374 +6 $2873

Dillon $86942 +5 $2103

Glendive $182952 -23 $2613

Great Falls $1307494 -4 $2210

Hamilton $194618 -6 $4476

Havre $232013 -5 $2492Helena $741060 -8 $2475

Kalispell $605939 -9 $2816

Laurel $21323 7 +11 $3074

Lewist own $118254 -10 $2016

Livingston $159412 +5 $2200

Miles City $263024 -6 $3003

Missoula $1144401 +3 $1639

Sidney $273047 -23 $4218

Whitefi sh $107721 -11 $1569










































addiction







are we doingrdquo

16



Belgrade $202185 +1 $259 3

Billings $264558 8 +1 $2430

Bozeman $47766 8 -1 $1147


Deer Lodge $89374 +6 $2873

Dillon $86942 +5 $2103

Glendive $182952 -23 $2613

Great Falls $1307494 -4 $2210

Hamilton $194618 -6 $4476

Havre $232013 -5 $2492Helena $741060 -8 $2475

Kalispell $605939 -9 $2816

Laurel $21323 7 +11 $3074

Lewist own $118254 -10 $2016

Livingston $159412 +5 $2200

Miles City $263024 -6 $3003

Missoula $1144401 +3 $1639

Sidney $273047 -23 $4218

Whitefi sh $107721 -11 $1569



cash cow and a sack of heartache

Documents