Bob Levey Dan Murano for The Washington Post

Tuesday, February 24, 1998

Good afternoon, and welcome to Levey Live. I'm your host, Washington Post columnist Bob Levey.

Levey Live appears each Tuesday from noon to 1 p.m., Eastern time. It's your chance to talk directly to major newsmakers and to Washington Post reporters and editors.

Today, Levey Live considers the issue of gambling in America. Your host is on assignment in Atlantic City, N.J., where gambling has been legal since 1979. But the industry has long since moved beyond Nevada and Atlantic City. Gambling has been booming all over the country lately --both legally and illegally. Casinos are now found on many Indian reservations. Off-shore gambling has just come to New York City. Gambling is expected to be a major issue in the Maryland gubernatorial campaign this year, and perhaps in other campaigns. Meanwhile, the federal government estimates that more than $2 billion is bet illegally on sports events in the United States each year.

Levey Live will consider these and other aspects of the gambling issue today. Your questions and comments are welcome throughout the hour.

Annapolis, Md.: Why is Atlantic City, with its abundance of gambling money, such a rundown, filthy city when you get two blocks away from the casinos? Thirty years ago, you could walk all of the streets clear up to the inlet in relative safety.

Bob Levey: Two blocks? How about two inches? But you have to understand that the decline of Atlantic City was going to happen anyway. Jet airplanes brought Florida and the rest of the world within easy reach. Gambling was never advertised as the sole method by which Atlantic City would revive. This place is still pretty dumpy for the most part -- but imagine how much more dumpy it would be without gambling. Also, Atlantic City suffers from the very same problem that plagues Washington, D.C. Thousands of people earn salaries in the center of the city, and then they cart that money out to the suburbs at night.

Arlington, Va.: How can lawmakers exercise jurisdiction over Internet gambling?

Bob Levey: They can't -- and I would be extremely worried about this from a freedom of speech point of view. Some politician will surely try to do what you suggest. I hope that the lawsuit that would almost certainly result would keep the Internet as free as possible, for gamblers as well as everyone else. In fact, the next frontier of gambling in this country will be sports bets on the Internet. Can you imagine how many zillions of dollars will be bet and lost this way? It is clearly illegal to wager on sports events across state lines. So maybe sports betting on the Internet would have to be "under wraps." But that doesn't mean it wouldn't happen.

Gaithersburg, Md.: A comment and a question. Comment first: A state either has gambling or it does not. It can't have "a little gambling." Maryland's governor, [Parris] Glendening, opposes further gambling in Maryland, but has no apparent problem with horse racing, off-track betting thereon, and with state-sponsored lotteries. I find that to be rather hypocritical, not just for him but for other politicians who support the same dichotomy. How can Governor Glendening, or any politician, say one form of gambling (horse racing or lotteries) are less harmful or "evil" than others (slot machines, blackjack tables, etc.) from "conventional" casinos? Ban it all, or let it all in.

Bob Levey: As I understand it, Governor Glendening objects to casino gambling because of the other degrading factors that it produces: crime, prostitution and "problem gambling." However, in principle, you are absolutely right. Just as you can't get a little bit pregnant, you can't really separate one form of gambling from another.

Silver Spring, Md.: It seems a little two-faced for a goverment to say that it is OK for it to receive profits from gambling, but not the private sector. My question is, are they worried about organized crime? I mean everyone knows how honest the politicians are.

Bob Levey: I'm going to assume you are joking about politicians. If you're not, you had better be! Sure, the real worry always is, and always has been, organized crime. In the United States, this dates to the opening of legalized gambling in Nevada. Did you know that the man who opened the first casino on what has since become the Las Vegas strip was Bugsy Siegel, the notorious mobster? Bugsy was not around long to see the fruits of his investment. He was rubbed out by a shotgun in 1946. But ever since, politicians have to walk a tightrope between wanting the tax revenue from gambling and fearing that the profits will go to the mob.

Fairfax, Va.: It would seem to me that with all the revenue that is generated by the casinos in Atlantic City, some of this would be used to help clean up and help the rat shacks that surround the casino areas. What is the position of the states where these casinos reside on the issue of giving back to the localities where these casinos are located?

Bob Levey: A significant percentage of every dollar lost in the Atlantic City casinos goes to the city government. An even larger percentage goes to the state of New Jersey. So you are already getting your wish. The larger problem is there is no significant business base in Atlantic City other than the gambling industry. Again, the analogy to Washington, D.C., is very apt. The federal government has more money than just about anyone else. So why are there still slums within a softball's throw of government office buildings? The reason, of course, is no one industry can do everything.

Washington, D.C.: Don't you think it makes sense to start a "national lottery" to benefit Social Security? People can buy lottery tickets, satisfy their urge to gamble, and the proceeds can go to prop up our ailing Social Security system. Why hasn't anyone thought of this?

Bob Levey: If you ever want to see a proposal die quickly on Capitol Hill, this is the one. I can just imagine Joe Candidate going home to run for re-election, and saying, "I saved Social Security by turning America into a land of gamblers." Joe would be looking for a new line of work -- perhaps as a casino dealer -- real soon. Seriously, I don't believe the answer to the long-term health of Social Security can ever come from gambling or should ever come from the expense of a revenue source that now pretty much belongs to the states.

Fairfax, Va.: Do you have a problem with Native American tribes running casinos? It seems like people don't want them to have gambling, as it's against some ideal of what Native Americans stand for, like it's some kind of failing of honor. What do you think? Maybe it's kind of appropriate for Native Americans to open a bunch of casinos and win money off non-Indians. Karma.

Bob Levey: Here is a statistic that will curl your hair no matter how you feel about Indian gambling. Of 557 U.S. tribes, more than 180 now run more than 280 gambling enterprises in 16 states, according to an investment publication called The Prudent Speculator. At the end of 1987, gambling on Native American lands had become a $5 billion a year industry. I don't know how you restrict this without running afoul of the same point we made earlier, about being a little bit pregnant. You can hardly say that Indian reservations that do not have gambling should not be allowed to get it. And I certainly believe it is certainly better for people who live on Indian reservations to have paying jobs, than to be on welfare. However, the issue on Indian reservations -- and in Atlantic City, too -- is whether this work is good for the soul. It's not very enobling to deal cards all day long, or to count a stack of $20 bills.

Washington, D.C.: Re the "Social Security lottery." I mean, if people are going to gamble anyway, it's not like putting the money to a good cause would be so terrible, right? Don't local/state governments now use lottery proceeds to do things like build baseball stadiums? Why is this any different/worse?

Bob Levey: I'm not saying it would be inherently terrible to finance or "rejuvenate" Social Security through gambling money. But I don't think it necessarily follows that "people are going to gamble anyway." In fact, some of the bloom is off the rose in the industry in general. Again, according to The Prudent Speculator, the industry was routinely seeing increases in the double digits every year from the early 1980s until 1995. Since then, things have slackened -- to the point where casino revenue grew from $20.9 billion in 1996 to only $21 billion in 1997, an increase of only 1 percent. What are you going to say if America falls out of love with gambling, to the point of even a gambling tax could not support Social Security?

Rockville, Md.: Do you gamble, Bob?

Bob Levey: Put it this way: My wallet is a bit fatter today than it was yesterday. My thanks and compliments go to the Atlantic City Hilton.

Washington, D.C.: Do you think Pete Rose should be allowed into the hall of fame, even though he was caught in the betting scandal?

Bob Levey: The issue with Pete Rose is not just whether he bet or not. It was whether he violated the terms of his contract with major league baseball. If The Washington Post tells me not to gamble, and I do it anyway, I deserve whatever happens to me -- even if it means I never end up in the Journalism Hall of Fame. Basically, you're mixing apples and oranges.

Arlington, Va.: I don't see why gambling should be illegal anyway. After all, this is a capitalist country. "Let the buyer [gambler] be wary."

Bob Levey: Basically, I agree with you, and so [do] American politics and American business. Gambling is thousands of years old; it was not invented in Atlantic City. And in fact, it is run more fairly [there] -- and elswehere in the United States -- than it has been in most places throughout most of recorded history. Ever since gambling began, cheating has been a major problem with it. You very seldom see cheating in casinos here, or in American lotteries, or on Indian reservations, or anywhere else in the American gambling industry.

Saline, Mich.: Do you think gambling is going to help bring Detroit back to life?

Bob Levey: Not by itself, any more than gambling has brought Atlantic City back to life by itself. You have to remember that successful American cities always have and always will depend on many kinds of businesses and many kinds of people. Even when Detroit was in its heyday, when auto manufacturing was king, it was still a major center for culture, education and many other industries.

Bob Levey: Half an hour left in our discussion of gambling in America.

Chevy Chase, Md.: Maybe I'm being naive, but could gambling in D.C. make it any worse of a city? Maybe there would be some money actually coming in, but I don't understand the implications too well. Please explain the pros and cons of gambling in D.C.

Bob Levey: First of all, there already IS gambling in D.C. The D.C. lottery is one of the most heavily played in the United States. In addition, although there are no reliable statistics on this, thousands of Washingtonians continue to bet on "the number" every day. So it's not as if there is some frontier that has not yet been breached. Washingtonians gamble, and they have for a long time. If you are asking me whether I would like to see -- or ever expect to see -- betting parlors similar to those in New York City, I would have to say, it's possible. The strongest force against this, both in Washington and elsewhere, has traditionally been the church. But from where I sit, the church is much less likely to resist additional gambling now than it would have been 40 years ago. If I were a betting man, and I guess I just admitted I am, I would expect to see new and wider forms of gambling in D.C. fairly soon. The major reason is political. Washington needs revenue wherever it can find it, and I don't see a lot of other sources for that revenue.

McLean, Va.: I was in Atlantic City two weeks ago and noticed that most of the casino workers were immigrants. What are the average salaries of these workers and do they receive competitive benefits?

Bob Levey: According to a Washington Post series on gambling, the average salary is about $30,000 a year, and a full range of benefits are available at every major casino. This is one of the great reasons gambling has been a positive force in Atlantic City. These are good middle-class jobs, they are stable, and they support families. As for whether employees are mostly immigrants, I can't offer you an exact breakdown. However, I agree that there seem to be more Asians working in casinos than there are in the population as a whole.

Hamden, Conn.: "And in fact, it (gambling) is run more fairly -- and elsewhere in the United States -- than it has been in most places throughout most of recorded history."

That's quite an assertion!

Care to share the source of data on which it is based?

Bob Levey: Here's one piece of anecdotal evidence: A guy sitting at a blackjack table beside me last night tried to insist that he had bet a $100 on a hand when he had in fact bet $50. He was told to leave. I don't say that that is a foolproof method of policing. Nor do I argue that every casino is quite so rigorous. But I think if you compare the typical Atlantic City casino to the typical Friday-night poker game in an American home, the action in the casino is much more honest and accurate.

Silver Spring, Md.: Is it true that betting pools in offices are illegal?

Bob Levey: As I understand the law, they always would be illegal if any of the "action" crosses state lines. Also, an office pool might violate local gambling ordinances. However, these vary widely, so office pools may not be illegal everywhere.

Baltimore, Md.: Does it worry you at all that the largest segment of the regular gambling population is at the lowest level of income? If the casinos are far away, or at least in New Jersey, at least some of these people will not throw away quite as much money as otherwise, won't they?

Bob Levey: Glad you brought this up. One of the most enduring myths about gambling in America is that it lands hardest on poor people -- people who can't afford to lose money -- than it does on middle-class Americans. In fact, according to American Demographics, "Casino gamblers are more likely than average to be better educated and to live in wealthier households." According to the same magazine, casino gamblers "are more likely than average to have white-collar jobs, and are likely to be in the peak earning years of 45 to 54." Perhaps most significantly, the average casino gambler in America lives in a household whose median income is $35,000 a year. That is 15 percent greater than the U.S. population in general.

Toronto, Ontario: By way of comment on the suggestion that gambling revenue be directed to supporting Social Security, we have found that this generates its own list of problems.

In Canada, we face the deeper problem of governments becoming involved with gambling but, in order to satisfy opponents of legalized gambling, having to agree to tie the revenue to a limited list of expenditures, such as health and sports projects.

In generating revenue then having to look for activities to spend it on, there are projects that become cash rich while other socially necessary projects go begging.

Much better, we have found, if a social expenditure has merit, then all taxpayers should be required to support the program.

It imposes a discipline on our politicians that is undermined when there is lots of "windfall" money to be thrown around.

Bob Levey: In the U.S., you would have a heck of a battle on your hands defining "merit." The operative definition in 1997 seems to be any group that can get a tax-free designation by the Internal Revenue Service. That doesn't satisfy me down to my bones, and I doubt it would satisfy many other Americans. The real problem is how we share the pie. Even if we wanted to subsidize Social Security via gambling, would this be a form of a "takeout," as horse racing does? Or would gambling companies have to slice off huge hunks of their revenue? Either way, even though you are north of the border and therefore safe from our politics, I think you can see that this would produce a lot of yelling and an awful lot of controversy.

Chevy Chase, Md.: How can casinos defend the prevention of "card counters" from playing in their facilities? It seems to me, such individuals are just particularly good at that skill, rather than overt cheat[ers]. The casinos appear to be afraid of skilled or smart gamblers!

Bob Levey: Wouldn't you be? In fact, card counters play blackjack -- a game in which the house has the smallest advantage of any game offered here in Atlantic City -- or elsewhere. However, I'm on your side. If they are going to offer an "open casino," I don't see how they can discriminate against the better players. It would be like washingtonpost.com discriminating against people who understand more about the World Wide Web.

Herndon, Va.: I grew up in the A.C. area and initially was not impressed with the help that casinos brought to the local area. However, Atlantic City now seems to be a city on the move: new convention center, new casinos, and the surrounding local area is booming. Do you get the same feeling being there now?

Bob Levey: I visited Atlantic City in 1979, shortly after casino gambling was legalized. This place is infinitely better off now than it was then. It is not just the matter of the new convention center. There are new high schools, some new houses, a new railroad station, a new airport and lots more jobs -- especially for younger people. According to a 1995 story in The New York Times, any high school student in Atlantic City who wants to work part-time in the casinos can do so. And hundreds of them do. That all sounds like stick-to-the-ribs progress to me.

Tucson, Ariz.: What, if any, are the effects on traditional casinos from the recent surge of Indian gaming in the West? How has it affected the casinos in the East or perhaps, say Vegas?

Bob Levey: In Las Vegas, they have always been successful at selling entertainment as well as gambling. So Indian reservation gambling, from the sources I have consulted, has not threatened Las Vegas in the slightest. The situation is a little less clear in Atlantic City. This is a place for day-trippers. The average stay in Las Vegas is four days; the average stay in Atlantic City is four hours. So Atlantic City is more vulnerable to gambling on Indian reservations. It takes just about as long to drive from New York City to here as to the new, huge Indian casino reservation in eastern Connecticut. You don't need to be a genius to see Atlantic City's bottom line may suffer.

Maryland: Income is nice for casino workers but what about Atlantic City's prostitution problem?

Bob Levey: Last I heard, prostitution was not invented in Atlantic City. So why single this place out?

University of Va.: Do you see a lot of people there who look like they haven't left in days?

Bob Levey: I did see a couple, but only a couple. The vast majority of the people here look to be very well-fed, middle-class couples. I guess from their accents the majority are from Philadelphia and New York. I see vast outbreaks of designer pants suits, $200 sweat suits and $80 Reeboks. I think you judge for yourself, based on that.

Rockville, Md.: Bob, what is the secret to winning in Atlantic City and becoming filthy rich? --Jonathan

Bob Levey: Hey, if I knew, I wouldn't say. And if I said, I wouldn't know.

Bob Levey: That's it for today. Many thanks for being with us. Be sure to join us next Tuesday, March 3, when we will discuss D.C. affairs with Virginia Republican Rep. Tom Davis.