Black Markets Do Not Protect Minorities


Originally published at The Hill

Former Denver mayor Wellington Webb argues in a Sept. 14 op-ed in The Hill that legalized online gambling would be bad for minority populations. (“Internet gambling harmful to minorities,” He bases this claim on the high rate of “disordered” gambling among low-income and African American communities. But if Webb truly cares about the possible threat online gambling poses for vulnerable groups, he ought to be lobbying states to legalize and regulate the activity.

A federal ban on online gambling would simply push the activity back into the black market, where consumers have few protections. Making criminals out of people who simply want to play poker online in their own homes is not the way to protect minorities, though it may help protect the profits of brick-and-mortar casinos like those owned by Webb’s boss, Sheldon Adelson.

Webb claims that African Americans and low-income earners are more likely to be categorized as “disordered gamblers” than their white or higher-earning counterparts, and that “persons in the bottom fifth of the economic ladder are more likely than other segments of the population to play the lottery”. It might seem intuitive that more gambling available will increase rates of problem gambling, but research shows that this isn’t the case.

While gambling has become increasingly available, worldwide rates of disordered gambling have been declining since the late 1990s. In the U.S., according to Harvard addiction expert Howard J. Shaffer, the rate of pathological gambling remained relatively stable during these years and has even decreased since the 1970s—despite the explosion in legal casino gambling in this country. In their 2011 paper, Harvard researchers Shaffer and Martin hypothesized that the reason rates of problem gambling remained stable despite the unprecedented rise in gambling availability is because certain people are just predisposed to addiction; they found that almost 100% of people with problem gambling had other disorders and most of the time another disorder preceded the problem gambling.

As for Webb’s claim that “minority communities are uniquely susceptible to the threat posed by 24/7 access to Internet gambling,” there is no evidence that online gambling is more addictive or more harmful than offline betting. A series of studies published this year by Harvard Medical School’s Division on Addiction Studies found that online gambling may actually be less addictive than in-person gambling. In addition, online gambling offers a greater opportunity to identify and address disordered gambling.

For example, in all three of the states that currently regulate online gambling, laws require the sites to recognize “self-exclusion lists.” That is, consumers can voluntary add their name to an exclusion lists that block their access to gambling sites and ensure they won’t receive enticements to play. Shaffer and Martin note that players who signed up for lifetime exclusion bans had significantly reduced gambling-related problems. Additionally, sites can employ existing behavioral tracking tools like PlayScan and Observer that compare players’ behavior against known patterns of problem gamblers. The tools to address problem gambling online exist, but it is up to regulators and website owners to decide whether or not they employ them.

Between 2003 and 2010 Americans spent $30 billion gambling on foreign-operated websites. If Webb and Adelson have their way the federal government will create, for the first time, a ban on legalizing online gambling, pushing it back into this black, unregulated market. While this might protect Adelson’s profits, it does nothing to protect American consumers—whatever their ethnicity.