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Bet on ItBaylor prof weighs pros and cons of gambling
By Meg Cullar
Dr. Earl Grinols is not popular in the casino gambling milieu. In fact,
when his research about the gambling industry appears in a major
newspaper, it often evokes letters from gaming industry executives
accusing Grinols of "faulty research" or of being a "longtime and vocal
gambling opponent."
 But
that doesn't really bother Grinols. He's not out to get the gambling
industry, he says. He's just applying his academic knowledge of
economics and public finance, doing the research, reporting it, and
drawing the logical conclusion. And that conclusion turns out to be
that casino gambling, in purely economic terms, does more harm that
good.
A distinguished professor of economics in Baylor's Hankamer School of
Business since 2004, Grinols originally became interested in studying
gambling while he was teaching at the University of Illinois at
Urbana-Champaign. When the city of Champaign was approached about
building an off-track betting parlor, Grinols was skeptical of the
promises being made by developers.
"They were telling people that this would create 250 jobs and a large
tax revenue for the city," he says. "They were presenting it as an
economic development boost when, in fact, I knew the truth was
precisely the opposite. I knew what export-import multiple models were,
and I knew that the money this type of establishment would generate was
going to come from local people and be removed from the local economy
in larger amounts than for other businesses."
So Grinols made a generous proposal to his city--he offered his
professional expertise, for free, to work with city economists on an
"honest and truthful" report about the economic benefits of the
project. He was shocked--and angered--when they said no thanks.
He did the research anyway. Once the report was finished the University
of Illinois's press office suggested publishing a commentary regarding
Grinols's research, garnering stories in Chicago, St. Louis, and
Indianapolis newspapers. The late Illinois senator Paul Simon read the
article into the Congressional Record, and an academic anti-gambling
star--and the industry's worst nightmare--was born.
Grinols spent ten years studying gambling and its economic effects,
crunching data from all over the country. In 1994, he was one of the
first academicians to recommend to Congress that it establish a
national commission to study gambling. The research culminated with the
2004 publication of Grinols's book Gambling in America: Costs and Benefits, from Cambridge University Press, which analyzes cost and benefit information from a national perspective.
One cost of casinos is crime. Grinols says that the introduction of a
casino will result in an increase in certain serious crimes, beginning
about three or four years after the casino opens. Previous research
showing little effect didn't analyze data from every county in the
country and allow for the lag needed for effects to become evident, he
says.
"People would often take the five years after the introduction of the
casino, average all those years, and see no effect," he says. "When we
did our regressions, we looked at up to four years before the casino's
opening and up to seven years after."
So, is gambling always bad? The primary negative effects of gambling,
Grinols says, are caused by pathological and problem gamblers. "If you
could eliminate pathological gamblers from the population, then I don't
see any real economic reason to oppose gambling if most people enjoy it
as a recreational pursuit," he says. "It's kind of a time waster, but
many things we do for recreation are time wasting. It is the mechanism
of pathological gambling that creates more damage than good."
Grinols even admits that in some situations, particularly when gambling
brings in new tourists, it can create more benefits than damage. "It
certainly has expanded Las Vegas," he notes, "which would be a trivial
town in the desert if it weren't for gambling. But if you look at the
country as a whole, it almost surely is a net negative. I'm willing for
someone to prove me wrong, but so far I see nothing that makes me want
to change my conclusion."
Grinols says that his original goal when he became an economist was to
somehow provide academic research that would help the nation avoid a
recession. "I thought that if I could ever do that, it would pay for my
life's work," he says. "When I began to research gambling, I discovered
that, in terms of the cost to the economy, it is the equivalent of an
additional recession of the 1991-92 vintage. So I thought, 'Here's your
recession, and it's worth spending some professional time on it.'"
Now Grinols is moving to something new--healthcare in America. This
fall, he'll be releasing a book, co-authored with fellow Baylor
professor Dr. James Henderson, that proposes "The New Baylor Plan" as a
solution to the nation''s healthcare woes.
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