EAST ST. LOUIS PLACES ITS BET

(2 of 3)

East St. Louis had less to lose. Still, the rising tide of riverboat revenues has not lifted all boats. The Casino Queen parking lot is surrounded by a high-security fence with guards in two watchtowers and on the ground. A new stop on the MetroLink commuter train, which deposits visitors at the boat, was designed to bypass the heart of East St. Louis, which even now has large tracts of urban desolation and 1,700 abandoned buildings.. "You have not seen a lot of gambling revenue trickle into the neighborhood," says community activist Alandra Byrd. But the casino has set up a $2.5 million foundation to provide low-interest business loans and grants to community groups. Average salary on the boat is $25,000 plus benefits, and no job pays less than $5 an hour.

But converts to casino culture are just beginning to compute the social costs of compulsive gambling, which, studies show, leads to lost productivity, bankruptcies, divorce, suicide, child abuse and crimes such as robbery, fraud and embezzlement (with consequent police, prosecution and imprisonment costs). Nevada, where gambling is the dominant industry, has a suicide rate more than double the national average, and led the nation in child-abuse fatalities in the period when casinos were still limited to Nevada and Atlantic City. Within two years of Deadwood's casino influx, child-abuse reports rose 43% and domestic violence 80%.

According to Harvard University's Center for Addiction Studies, between 3.5% and 5% of adults exposed to gaming can be expected to develop into pathological gamblers. In Collinsville, Illinois, a short drive from East St. Louis, a teacher dropped off her two children at school one day last January, drove to a parking lot and shot herself in the head. Although a riverboat spokesman said he had no record of her visits, friends told the local press that the 40-year-old woman gambled frequently at the Casino Queen. The day she died sheriff's deputies were on their way to her home with an eviction order. She left a note on the door explaining that her husband, a refinery worker, knew nothing of their financial problems, although she had pawned their wedding rings and skipped making the house payments for 17 months.

In Florida a plan to build 47 casinos was defeated in a 1994 referendum after the state pegged expected crime and social costs at $2.16 billion a year--far higher than the likely $320 million to $470 million in gaming-tax revenues. Frank Fahrenkopf, president of the American Gaming Association, calls such calculations "educated guesses, at best--and pure fabrication, in some cases."

Indeed, just about everything about the economics of gaming is unpredictable, since the very success of casinos can sometimes breed future failures when the market becomes oversaturated. Rock Island, Illinois, had to rebate more than three-quarters of a million dollars in gambling taxes when its casino revenues plummeted because of new competition from Iowa. In New Orleans the gargantuan hulk of a half-built casino, slated to be the world's largest, sits rusting on the edge of the French Quarter. The builder, Harrah's Jazz Co., is bankrupt, done in by an overly optimistic tax deal with the state. Louisiana Governor Mike Foster, once a gambling booster, now wants to outlaw both casinos and video poker.