RESEARCH Business Economy

GAMBLING
Spread of U.S.-style casinos undermines global stability

Mark Reutter, Business Editor
(217) 333-0568; mreutter@uiuc.edu

4/1/03

Photo by Bill Wiegand The lightning spread of "Western-style" gambling overseas has increased the problems of addicted and problem gamblers, organized crime and alleged corruption in Asia and the Middle East, says John W. Kindt, an Illinois professor of business and legal policy.

CHAMPAIGN, Ill. — From its base in America, the gambling industry is exporting technology and know-how to often fragile political systems in Asia and the Middle East, causing conditions that could threaten both U.S. and world security, a professor at the University of Illinois at Urbana-Champaign argues in a law journal article.

The lightning spread of "Western-style" gambling overseas has increased the problems of addicted and problem gamblers, organized crime and alleged corruption in such countries as Malaysia, North Korea, the Philippines, South Korea and the strife-torn West Bank of Israel, according to John W. Kindt, an Illinois professor of business and legal policy.

"The laissez faire attitude by U.S. governmental and economic policymakers has signaled and encouraged the rapid embracing of the U.S. gambling industry’s philosophies and technologies by other countries trying to emulate U.S. economic growth," Kindt wrote in the Temple International and Comparative Law Journal. The article is co-written by Anne E.C. Brynn, a Chicago lawyer.

"In permitting gambling enterprises to flourish in the United States and abroad, the United States undermines global socio-economic stability in contravention of its international obligations," Kindt continued. One U.S. company, for example, dominates the rapidly growing world lottery market. In another case, a Hong Kong-based group, using U.S. technology, has invested in a casino hotel developed in North Korea for the purpose of targeting Chinese gamblers.

"In an effort to mitigate losses and recognizing the inherent destructive nature of gambling, the North Korean government prohibited North Koreans from patronizing the casino," the article pointed out.

The Illinois professor also faulted the establishment of a casino in the West Bank town of Jericho. Opened in 1998, the Oasis Casino Resort was "built with U.S. gambling technology, sanctioned by the Israeli government and patronized by Israeli tourists," he wrote. Although financial data from the casino is not publicly available, the Palestinian Authority under Yasser Arafat has publicly acknowledged that it holds a 30 percent stake in the casino, valued in 2000 at about $60 million.

Another threat to stability, Kindt argued, is the rise of Internet gambling. "The faster the gambling activity, the more highly addictive it is; and the more addictive the gambling activity is, the more revenue it will generate for the industry," he concluded, citing medical and public health studies.
Kindt has been active in testifying against gambling and has published extensively in scholarly journals about the negative effects of casinos and state-run lotteries on American citizens.

The article, "Destructive Economic Policies in the Age of Terrorism," recommends that Congress curb legalized gambling in the United States, especially Internet gambling, and exercise its influence over the World Bank and International Monetary Fund to end loans and other support for gambling interests in less-developed countries.