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In Oklahoma, Few Efforts To Measure Gambling Addiction

slot machines at Winstar
Oklahoma Watch
Calls to a national gambling helpline from Oklahoma show that most people struggling with gambling addiction cite slot machines as the main problem.

In fiscal 2013, a total of 1,838 Oklahomans called a national hotline seeking help related to compulsive gambling – a nearly 60 percent spike over the previous year.

Then, in 2014, the number of calls fell sharply to 1,310, according to HeartLine, an Oklahoma City call center that fields calls from Oklahomans to the National Problem Gambling Helpline (800-522-4700).

The sudden drop perplexes Danielle Harris, coordinator for HeartLine.

“We have not come up with a theory yet,” she said, adding the drop is a national trend. “It could be because (problem gamblers) don’t have access to resources. They may not know about our hotline.”

The conundrum also reflects a larger issue: No one really knows how bad compulsive gambling is in Oklahoma.

What is clear is that a decade after casino gaming was approved in the state, gambling has boomed.

The total amount being wagered has climbed every year, reaching $3.7 billion in 2012, according to the most recent Casino City Indian Gaming Industry Report.

The state now has well over 100 casinos with more than 60,000 gaming machines – operations that yielded more than $122 million in fees to the state last fiscal year.

In the midst of this plenty, the state’s problem gambling office also got a raise – $250,000 this year, to about $1 million, to help address issues associated with gambling addiction.

The following Q&A addresses what’s known, and not known, about addictive gambling in Oklahoma. The issue could play a role in the state’s negotiation of new gaming compacts with Native American tribes before current compacts expire in 2020. The tribes are expected to push for agreements that will allow them to offer more Las Vegas-style gambling.

What is the best way to measure compulsive gambling?

According to experts, it’s a prevalence study, or survey, which is used in epidemiology to estimate how many people have a condition or disease.

Oklahoma has never done a prevalence study on gambling despite posting the second highest revenues in tribal gaming in the nation, according to the Casino City report. California was first.

“It’s hard and it’s very expensive,” said John Hostetler, problem-gambling field service coordinator for the Oklahoma Department of Mental Health and Substance Abuse Services. “There are prevalence studies done in other places and one can draw inferences from those.”

One of those is Ohio. While it has only five casinos, its gambling-services program, part of the Ohio Department of Mental Health & Addiction Services, has a budget nearly six times that of Oklahoma, at $5.8 million. Ohio approved casino gambling in 2009, but before building the first casinos, it funded a baseline prevalence study for $140,000, said Stacey Frohnapfel-Hasson, problem-gambling services administrator.

Ohio will conduct a follow-up study in 2016 to determine if the number has gone up. Estimates put the cost at $2 million to $3 million.

“We wanted an accurate picture before and after,” Frohnapfel-Hasson said.

Several prevalence studies have found that about 2 percent to 3 percent of the adult population has an issue with problem gambling. In Oklahoma, that would translate to between 60,000 and 90,000 people.

So is Oklahoma just guessing?

To some extent, yes. But the extra $250,000 in state funding will pay for screening behavioral-health patients for addictive gambling, which could shed more light on how widespread the problem is. (The rest of the gambling office’s budget is spent on therapy, treatment, prevention and awareness.)

Another way to assess risk is to calculate how many people live within a certain distance of a casino. A 1999 University of Chicago study suggested that problem gambling doubles in areas within 50 miles of a casino. Many Oklahomans live within 50 miles of a gaming establishment. Many residents in north Texas also are at risk because of Oklahoma casinos located near the Texas border.

“One vulnerability folks have is proximity to casinos,” Hostetler said.

How harmful is compulsive gambling?

It can be devastating, causing people to lose their homes, jobs, marriages, savings and freedom if they commit a crime, such as embezzlement. Compulsive gambling is often associated with other problems, such as alcoholism, drug addiction, poverty and other health issues. Oklahoma suffers from high rates of all of these.

Gambling addiction often plays out in private, away from media coverage.

When it does break into view, the reason often is embezzlement.

Marquet International, a Boston investigative and consulting firm specializing in corporate fraud, conducts an annual study of major embezzlement cases nationwide. Last year, it analyzed 528 cases in 2012 and identified the primary motive in 132 cases. The second most common motive was gambling; the first “desire for a lavish lifestyle.”

“Gambling continues to be a factor for many embezzlers,” the 2012 report said, adding, “All but two of the 37 gambling cases occurred in states where casinos and/or Indian gaming facilities are permitted.

Marquet International concluded that Oklahoma is one of 15 states that have the “highest risk for major embezzlement,” with projected losses of $36 million in Oklahoma in the next five years.

Among embezzlement cases that made headlines in Oklahoma:

  • Former FBI agent Timothy A. Klotz pleaded guilty July 11 to embezzling more than $43,000 from funds used for paying confidential informants. A judge ordered him to stay out of gaming institutions. In a bankruptcy filing, Klotz listed $11,000 in gambling losses in one year. His embezzlement scheme lasted from 2007 to 2011.
     
  • A recent audit from the State Auditor and Inspector’s office into missing funds at the Tahlequah Chamber of Commerce showed more than $400,000 was missing, including more than $120,000 spent at a local casino. Investigators with the Oklahoma State Bureau of Investigation are tracing the expenditures, according to reports, although no charges have been filed in the case to date. Executive Director David Moore resigned when the losses were made public.
     
  • A former credit union manager was removed and the business was turned over to investigators, including the FBI, after she admitted more than $16 million in gambling activities, according to a story in the May 28 Credit Union Times. State and federal examiners found that about $10 million in non-member deposits made into the credit union were missing, with large sums being spent at a casino in Quapaw and in Kansas City. The FBI searched the home of a former manager and confiscated paperwork, tens of thousands of dollars in cashier’s checks, and gold coins. Charges have not yet been filed.
     
  • In 2010, a former auditor with Oklahoma Commissioners of the Land Office, Roger Q. Melson, Jr., 56, of Edmond, pleaded guilty to 174 felony embezzlement counts, admitting he embezzled $1,2 million from state education funds to feed his gambling addiction. His defense attorney called Melson a "gamblaholic.” “He doesn't gamble any more, and he goes to several support groups," attorney Billy Bock said during Melson’s sentencing. Melson was sentenced to 10 years in prison and restitution.
     
  • Former Muskogee Deputy Court Clerk Jackie Borovetz in 2008 was convicted of embezzling more than $600,000 in court funds. Court filings in her case show repeated complaints of indebtedness stretching back several years before her conviction. According to court records and published accounts, she spent the money at a local casino. Her attorney called gambling “an epidemic.”

What is gambling addiction like?

Consider Michael, a former Tulsa attorney and a recovering gambling addict who did not want his full name used.

Oklahoma Watch is a nonprofit organization that produces in-depth and investigative journalism on important public-policy issues facing the state. More Oklahoma Watch content can be found at www.oklahomawatch.org.
Oklahoma Watch
Oklahoma Watch is a nonprofit organization that produces in-depth and investigative journalism on important public-policy issues facing the state. More Oklahoma Watch content can be found at www.oklahomawatch.org

“I began to have difficulties in 2009 with going out all night, away from my office, my family,” Michael said. “I started to go through all my money, savings, cashing in my insurance policies … I burned up my retirement, everything. It’s all gone.”

The transformation was gradual for Michael, but relentless. A successful attorney, he had plenty of money when he started. In the early days, it was flights to Las Vegas and nights on the Strip. He said he played card games for fun and skill. While he spent some money, it was manageable, he said.

However, after a casino went in near his Tulsa home, his whole approach changed. Instead of the poker table, his preferred method of gambling turned to slot machines. They mesmerized him, he said.

“I never was aware of what I was doing. Like any addict, you just decide you are totally committed to the exercise, and I was,” Michael said. “Eventually, I dipped into client funds. I told the client what I had done, they told the bar (association), and I resigned. I lost everything.”

No charges were filed, but he can no longer practice as an attorney. He hopes to reapply to the bar after a required five-year hiatus is up. He also attends Gamblers Anonymous meetings.

What kind of gambling is most addictive?

While games such as dice, cards and roulette can be addictive, researchers suggest the big culprit appears to be slot machines. More than 60 percent of the most serious gambling-related calls to the helpline in Oklahoma are related to slot machines.

A landmark study by researcher Howard Shaffer of the Harvard Medical School in 1999 explored the addictive nature of slots. They are bright, enticing devices, easy to play. Among their tricks are “losses disguised as wins,” in which the machine rings bells, flashes lights, and otherwise announces a “win” that turns out to be less than the money originally put into the machine. At one point, Shaffer said slot machines were “like crack was to cocaine.” Shaffer has since qualified his assertions. “Not everybody who uses crack cocaine becomes addicted,” Shaffer later said on the CBS show “60 Minutes,” Others, however, still consider the games dangerously addictive.

Slot machine addiction has several elements, said Hostetler, Oklahoma’s addictive gambling coordinator. He said machines, with rapidly flashing, synchronized lights paired with sounds, have neurological effects that can mimic drugs in susceptible people.

“First, they don’t take any skill,” Hostetler said. “You don’t have to know anything. Secondly, it starts falling into patterns where they have a win … and those who are vulnerable, they start developing changes that affect the brain and their brain starts to change with the machines.”

Will the problem get worse if we keep building more casinos?

Here’s where it gets interesting. After his initial findings, Shaffer continued studying problem gambling. He developed a theory that once legal casinos are established, the numbers of those with problem gambling within that area spike, then level off and go down. Called the “adaptation hypothesis,” Shaffer explained that populations exposed to gambling become inured to it; the number of problem gamblers in a community stabilizes at a lower level. However, he said like other vices, the issue of problem gambling needs regulation.

Contributing: Brittan Jenkins of Oklahoma Watch.

Oklahoma Watch is a non-profit organization that produces in-depth and investigative journalism on important public-policy issues facing the state. Oklahoma Watch is non-partisan and strives to be balanced, fair, accurate and comprehensive. The reporting project collaborates on occasion with other news outlets. Topics of particular interest include poverty, education, health care, the young and the old, and the disadvantaged.
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