Report: Casinos threat to security, readiness

Casinos undermine both national security and military readiness, according to research released Thursday by the University of Illinois at Urbana-Champaign, adding a new dimension to an already complicated debate.

Gambling is a revenue generator for many states, but some analysts argue there's serious collateral damage hidden in the oft-glitzy world of gaming operations, which generates $92 billion in gross revenue a year in the U.S. alone.

John W. Kindt, a business and legal policy professor at the campus, wants that money to go into the troubled economy, not slot machines. Gambling drains money from the vital circuit of consumer products and services, thus “weakening the economic engine that ultimately drives defense spending,” he said.

“We cannot maintain a strong military presence with a weak economy. Widespread gambling gambles with our national security by dragging down our national economic security,” Mr. Kindt added.

In a 3,000-page report, he also categorized gambling culture as a “haven that fuels and finances terrorism” through international money laundering and other unsavory activities. Military personnel also are at risk for gambling addiction, further hampering readiness, he said.

U.S. armed services currently operate thousands of slot machines at bases and posts overseas, generating about $185 million a year for morale and recreational funds.

Mr. Kindt, however, cited Russia's decision to shutter 2,230 casinos two years ago after officials examined “national security and military consequences of an economy weakened by gambling” in the former Soviet republic.

Some of its American counterparts don't share the sentiment.

Gambling is legal under federal law but subject to state regulation; currently 12 states allow commercial casinos, 29 allow casinos on American Indian reservations, and 48 permit charitable gaming. Texas and Massachusetts are currently in the throes of argument for and against the idea of “destination” casinos that would keep gambling money at home and attract tourists.

“If we're going to do this, let's do it on such a scale that we get the best bang, the best value, for Texas dollars,” Democratic State Sen. Jose Menendez said during a hearing Thursday.

Mr. Kindt dismisses revenue arguments, and instead claims that the U.S. decision to allow gambling on Indian reservations more than two decades ago essentially paved the way for a dangerous global expansion of gambling - newly framed as a socially acceptable source of revenue.

“Facts simply don't support his claims. Consumers have a right to spend their entertainment dollars the way they see fit. Spending an hour or an evening at a casino is no different than going to a movie, seeing a play or participating in any other activity where a customer pays for an entertainment experience,” said Frank J. Fahrenkopf Jr., president and chief executive officer of the American Gaming Association.

“In fact, the vast majority of Americans - 81 percent according to recent survey results - think casino gambling is an acceptable activity for themselves or others.”

Casinos employed nearly 360,000 people last year and contributed $5.5 billion in direct gaming taxes to state and local governments, Mr. Fahrenkopf said.

“Casinos are valuable community partners. To claim that casinos are somehow a threat to our national economy is simply ridiculous,” he added.