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Gambling and Public Policy
RONALD M. PAVALKO Abstract
The expansion of legalized gambling poses a number of issues for policymakers. Two related issues, which have not been dealt with extensively from a public policy perspective, are examined in this commentary: state responsibility for addressing pathological and problem gambling, and the legal status and regulation of Internet gambling. A review of the recommendations of the 1998 National Gambling Impact Study Commission on pathological and problem gambling as well as state policies and practices indicates that little has been accomplished in dealing with the need for education, prevention, and treatment. Confusing and contradictory legislation and policies abound. Internet gambling flourishes, and federal and state governments are ambivalent about legalizing it. Both problem gambling and regulation of Internet gambling urgently need attention. The legalization and regulation of commercial gambling involves a wide range of public policy issues. These include such matters as how jurisdictions decide to legalize gambling in the first place, and what forms of gambling to legalize (e.g., lotteries, casinos, pari-mutuel racing, bingo). Another policy issue faced by jurisdictions that already have some form of legal gambling is the decision of whether or not to expand existing forms or add new ones. Once gambling has been legalized, jurisdictions face the issue of how to regulate it. For gambling businesses to succeed, gamblers need to be confident that the games are honest and that they will be paid if they win. One role of regulatory agencies is to ensure that gambling activities occur in such a manner that these conditions are met. Decisions about all these matters are made in a highly politicized environment and are shaped by a variety of competitive forces. The initial decision to legalize any form of gambling is typically supported by those likely to benefit financially or politically in some way and opposed by those who see their interests or values threatened (e.g., religious groups opposed to gambling on moral grounds). The decision to expand legal gambling usually generates opposition from operators of existing businesses (e.g., racetrack operators can be expected to oppose new casinos, Native American tribal casino operators will oppose the legalization of nontribal casinos). This sort of response is simply a matter of businesses attempting to maintain monopolistic advantages or minimize competition. The formulation of public policy Public Integrity, Fall 2004, vol. 6, no. 4, pp. 333–348. © 2004 ASPA. All rights reserved. ISSN 1099-9922/2004 $9.50 + 0.00.

Ronald M. Pavalko

on gambling is complicated by the fact that government has an economic interest in gambling, mainly by virtue of operating lotteries, but also by taxing racetracks and (nontribal) casinos. When governments discover gambling as a source of public revThe formulation of public policy on enue, they develop an interest in promoting gambling is complicated by the fact it. Consequently, the ability of policymakers that government has an economic to assess impartially the claims of competing groups regarding the desirability of exinterest in gambling, mainly by virtue panding or contracting legal gambling of operating lotteries, but also by becomes highly problematic. Finally, the taxing racetracks and (nontribal) making of public policy on gambling incasinos. volves the reversal of the usual relationship between the federal government and the states. Virtually all legislation and regulation in the area of gambling is at the state level. One exception to this generalization is the oversight and nominal regulation of Native American tribal gambling by the federal government through the Bureau of Indian Affairs. Another is the federal Wire Communications Act of 1961, the implications of which will be discussed at greater length in dealing with one of the main topics of this paper, Internet gambling....
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