‘Gut-wrenching’ cuts to a problem gambling program that was never flush

Nevada, which depends largely on the success of casinos to keep the state humming, doesn’t take problem gambling seriously, says a former official of the Nevada Council on Problem Gambling.

From the regulatory side, where Nevada Gaming Commission members refer euphemistically to “problem gaming,” to the Department of Health and Human Services, which is calling for cuts to the state’s already modest treatment and prevention fund, Trey Delap says officials charged with preserving Nevada’s gaming gold standard are instead displaying “incompetence or dangerous ignorance.”    

“It feels like people don’t want to say ‘gambling,’” Delap laments. “‘Problem gaming’ is when the machine doesn’t work. ‘Problem gambling’ is when you’re on that spectrum to suicide.”

Delap knows of what he speaks.  His gambling addiction cost him his state job after he embezzled money to support his addiction.

As many as half of the individuals who seek treatment for problem gambling contemplate suicide, according to the Nevada Council on Problem Gambling. About 17 percent have tried to kill themselves. 

At a budget hearing last month, Department of Health and Human Services director Lisa Sherych told lawmakers the state was “requesting to reduce problem gambling services,” to about $2 million a year, resulting in a “decreased capacity for providers to provide adequate availability of services to the problem gamblers in Nevada.”   

“It seemed this was an amount the program could work within and still deliver services,” she said.  

“It was a line item presented by the Department of Health,” says Alan Feldman, chairman of the state’s Advisory Committee on Problem Gambling. “It is something the Department had discussed with the ACPG prior to submitting.”

“We effectively had this conversation of what can you defer or what can you hold off on doing that won’t impact the provision of services. The ACPG believes providing treatment services is the most important thing we need to do,” he said. 

The budget covers the anticipated costs based on treatment currently provided, plus a “small amount for research and a small amount for social media.” 

“We should have a much more dynamic research budget in Nevada. We should be doing more in the way of workforce development — training new counselors,” Feldman adds. “This is all important and in the strategic plan, but when you get to a budget that’s been as torn apart as Nevada’s, what do we absolutely have to do and what can we hold off on a bit?” 

“Just to be clear, I’m making it sound easy. These were gut-wrenching decisions,” Feldman adds.

Good help if you can find it

The good news — treatment for gambling addiction can be effective. The bad news — an estimated 6 percent of Nevada adults have a gambling problem, according to the Nevada Council on Problem Gambling, and only a few hundred a year are receiving help through the state’s programs. 

Outpatient enrollments in state programs peaked in 2015 at 527, plunging in 2020 to 337, likely because of the pandemic. 

“All clinics quickly adapted to the crisis and began offering telehealth services in addition to face-to-face services in order to support their clients’ needs,” says UNLV’s 2020 Nevada Problem Gambling Services Annual Report   

Inpatient enrollment reached a high of 76 in 2018, falling to 60 in 2019 and 63 last year. 

Of the clients who enrolled in Nevada’s problem gambling programs in the year analyzed by the 2020 report, 70 percent had not gambled after 30 days. About a third had not gambled after a year.  Aftercare is essential to success, experts say. 

But clients interviewed for the Annual Report say help is hard to find. 

“I’m glad the program exists and they need better advertisement because they are hard to find and know about them,” said one. 

“I had a hard time finding meetings and help. Hard to find where to go, should make themselves more prominent in the community,” another suggested.

Treatment options are about to become even more scarce.

“What we’d love to see are television commercials and billboards,” says Feldman, a former MGM International Resorts executive. The Nevada State Advisory Committee on Problem Gambling which he now chairs oversees funding for the state’s six grant-supported programs.  

Feldman knows a thing or two about publicity.  He crafted the MGM brand and messaging for a quarter of a century.

“The challenge of dealing with promotion and publicity and advertising is that only putting a little in to say you’ve done it is the equivalent of doing nothing,” Feldman says. “It’s something you either fund or don’t waste the money.”   

“The real promotion comes from a paid public health campaign. Think of the seat belt or drinking and driving campaigns,” he says. “One of the things we’d want to do is target the ads toward moments when there’s likely to be a higher percentage of those watching who might be gambling — sporting events, for example.”

For now, with the state budget recovering from the pandemic, a cost-effective social media campaign will do.  

An unsuccessful 2019 legislative effort to augment the state’s Problem Gambling Fund would have replaced a $2 fee per quarter paid on all slot machines with an amount equal to .6 percent of the gross gaming tax.

“The Legislature made the decision to make the appropriation out of the general fund,” Feldman says. “In the end, the appropriation was less than the percentage of tax would have been, but was a solid increase over what the old formula generated.”

The gross gaming tax is paid by resorts but not by restricted licensees (those with 15 or less machines,) such as taverns, convenience stores, and slot bars such as Dotty’s.

Those locations managed to keep a greater percentage of slots in play during the pandemic than their larger counterparts.

Restricted licensees reported 6.9 percent fewer machines in operation in June 2020 than the prior year, while non restricted licensees reported a 23.6 percent plunge in the number of slots.

Gold standard? 

In 2016, Nevada ranked 13th in per capita public funds invested in problem gambling, spending 47 cents per person. The average per capita allocation in the 40 states with publicly funded programs was 37 cents. 

“We are not the gold standard with regard to protecting our citizens. Other jurisdictions are way ahead,” says Delap.

Last summer, with the pandemic raging and state budgets hemorrhaging, officials proposed taking $1.6 million from $2.1 million allocated for problem gambling services. 

Feldman complained the state did not consult with the Advisory Committee before proposing the cut.  He told state lawmakers that contrary to assertions from DHHS, health insurance plans would not cover costs for problem gambling treatment, and Nevada’s public health system lacked staff and resources to help people who need it, Casino.org reported at the time. 

“The state is the payor of last resort currently,” Feldman told senators. “No state funds can be distributed unless the treatment provider has first exhausted any private insurance or Medicaid reimbursement. In fact, only a small number of patients seeking services would qualify for Medicaid.”

Medicaid does not cover problem gambling treatment, however, individuals can sometimes obtain treatment for other addictions that are covered.  

“We have an addictive disorder that is diagnosable. We have a high rate of occurrence, but that piece is not covered,” says Delap. 

“This has been an on-going conversation,” says Sarah Dearborn of the Nevada Medicaid Social Services Program. “Problem gambling counseling is not a covered stand-alone service permitted by the Centers for Medicare and Medicaid Services.”

Historically, problem gambling has been a state, not federal issue.

Substance abuse, which is roughly four times more prevalent than gambling addiction, receives 334 times the funding — much of it from the federal government, according to the National Council on Problem Gambling.

“Research and experience make clear that financial problems are one of the most common consequences of gambling addiction. Increasing losses may lead to chasing, intensifying a cycle of desperation leading to addiction, bankruptcy, crime and even suicide,” the Council wrote in a letter to lawmakers last year.

Affordability checks v. the ‘Nanny state’

Last summer, as the state contemplated slashing problem gambling services, the Nevada Gaming Commission lifted a prohibition on cashless gaming devices, which allow customers to transfer funds from a debit or credit card and place bets, often on a remote device — a practice the National Council on Problem Gambling says is “associated with higher rates of problem gambling.

Of the 23.2 million Americans expected to have bet on the Super Bowl this year, 7.6 million likely wagered online, a new record and up 63 percent from last year, according to the American Gaming Association.   

Sportsbooks in Nevada, suffering from pandemic-induced crowd control measures, were expected to see a drop in revenue, according to gaming officials, who told the Nevada Appeal mobile betting would likely offset some of the loss.

“But now, if you look, like, on my card — my Wells Fargo card, not only is Wells Fargo tied to private banking, but there’s also a Visa. Right?” Gaming Commission member Steve Cohen pointed out in January 2020 at a workshop on the regulation, “which also means higher interest rates, whatever they may be. You know, maybe you’ve got a 6 percent card, maybe you have a 36 percent card.”

“Where we know there’s an overdraft, we will not process it,” gaming attorney Marc Rubenstein told the Commission on behalf of his client, a wager processing service, adding “We have no way of knowing if they don’t tell us.”

“I have always had a problem with having a credit card put in place to gamble, and that’s not what’s going on here. I got it. Okay?” Commission Chairman Tony Alamo asserted, albeit incorrectly, given the prevalence of sites that accept credit cards, including those operated by Nevada licensees.      

The NGC imposed a “daily monetary limit” on bank transfers and required the devices display information regarding problem gambling services.    

While experts say problem gamblers are unlikely to self-impose limits, digital payments “enable better regulatory oversight and improved Know Your Customer and anti-money laundering capabilities,…” according to the American Gaming Association.

But are casinos using the information?

The United Kingdom’s Gambling Commission is doubtful. Last year, spurred by COVID-imposed isolation, the UK Gambling Commission required casino companies to check in with remote gamblers after an hour. It’s now proposing voluntary affordability checks performed by casinos as a way of stemming compulsive betting, a prospect that is generating widespread opposition among gamblers. 

“Operators must use the data they hold to protect their customers and now, more than ever, it’s vital that online operators really know their customers by monitoring how long they are playing for and understanding how financial uncertainty is impacting them and what they can afford to gamble with.”