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Study: Most states spend allocated funding on responsible gaming

Updated January 13, 2020 - 7:16 pm

While most states — including Nevada — follow through on promises to use allocated gaming tax revenue on responsible gambling initiatives, other states can’t say the same, a new report claims.

The casino gaming industry generates nearly $10 billion in gaming tax revenue for state governments each year, with states using that money to support such issues as education, infrastructure and public health. According to the Responsible Gambling Collaborative’s report, Kansas, Louisiana, Missouri and Oklahoma likely did not meet their responsible gaming spending targets.

“We need to be certain that … states are keeping up their responsibilities,” said Alan Feldman, a distinguished fellow at UNLV and a representative of the RG Collaborative. “We should be certain those monies are well spent.”

Falling short of expectations

The January study was the first from the RG Collaborative, which launched in 2018. The group — made up of thought leaders, stakeholders and academics — looked at 14 of the 43 states that have commercial or tribal gaming, and found six were likely to have spent allocated tax funding on responsible gaming issues as intended.

Nevada, for instance, had $1.3 million from gaming taxes available for responsible gaming initiatives in 2018 and ultimately spent $1.3 million, primarily in grants.

It was unclear if four other states spent the allocated tax money appropriately. The study said the funds may have been partially diverted to other issues but in line with legislative priorities, or the state could have recently rolled back dedicated funding streams for responsible gaming.

As for the remaining four states, the collaborative found gaming tax revenue likely did not meet spending targets on responsible gaming issues.

“As you take a look across the country, in various sectors of society, you find that people are being held more accountable. … This is an area that hasn’t seen that, and it should,” Feldman said. “This is about seeing to it that the things we’re advocating for and spending time and our emotional input getting done are getting done well.”

Feldman said there are a number of reasons why states aren’t meeting these standards. Some may have faced a budget crisis and diverted the funding elsewhere, while other states may have had unclear guidelines on how to spend the money.

“You need to have very clear policies,” Feldman said. “In some cases, that was left undone.”

Breaking it down by state

While Kansas had $7.6 million from gaming taxes available for responsible gambling issues in 2017, only $716,927 was ultimately spent. The study found about a third of the grant fund money was transferred to other agencies, with much going to other substance abuse programs.

In 2018, Louisiana had $2.5 million available for responsible gaming from gaming taxes, but its fund ended up spending $2.2 million. That same year, Missouri had $395,598 available for responsible gambling initiatives, but spent only $120,418.

Oklahoma had $1 million available for responsible gaming initiatives in 2017, but spent only $755,000, according to the report. The RG Collaborative notes that while the Oklahoma Department of Mental Health and Substance Abuse Services had appropriated $1 million, local media found that it has regularly failed to spend the authorized amount on responsible gaming programming.

“What needs to change is increased diligence from everybody to ensure that we’re allocating the right amount of money to address this issue,” said Casey Clark, the senior vice president of strategic communications for the American Gaming Association, which is part of the collaborative. “The expectation should be spent according to those laws and put in the right place.”

The collaborative’s report calls on state legislators to utilize gaming tax revenue for its intended purpose, using the money to promote responsible gaming and fund programs in line with the collaborative’s Responsible Gambling Effectiveness Principles. These principles include the call to support the funding for research and treatment and to ensure companies have a responsible gambling plan.

“I’m glad we have more data that can help ensure resources are being appropriated to this important issue,” Clark said. “It’s important for everyone who gets involved in any kind of gaming that they’re doing so responsibly and doing so within their means.”

Contact Bailey Schulz at bschulz@reviewjournal.com or 702-383-0233. Follow @bailey_schulz on Twitter.

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