Problem Gamblers and Their Finances
A Guide for Treatment Professionals
Treatment professionals familiar with the psychological background of problem gambling understand that it is not merely a “financial problem.” It is a chronic, progressive behavior disorder.
Financial problems—overdue bills, badgering creditors, and impending bankruptcy—are the usual symptom of an addiction whose statistical odds are stacked against the gambler.
Financial difficulties also seem to be the factor that most frequently drives the problem gambler, or a loved one of the problem gambler, to finally seek professional treatment of the gambler’s addiction. By helping the gambler face and cope with the financial pressures and find long-term solutions to money problems, you, as the treatment professional, can provide the gambler and his or her loved ones with several major benefits:
• You allow the gambler to better concentrate on a meaningful
healing program. As long as financial issues are uppermost
in the gambler’s mind, effective treatment of the underlying
addictive behavior can be restricted, if not impossible.
• You provide the gambler with an immediate sense of hope,
especially if financial problems have reached a crisis stage,
such as impending bankruptcy.
• You offer the gambler viable financial options. Problem gamblers fail to see other options to their gambling; many believe that the only way out of the financial hole that gambling puts them in is to gamble their way out.
• You can help reduce suicidal tendencies, help the gambler relearn the true value of money, and lessen the chance of a relapse into gambling behaviors.
That’s why this guide was prepared by the National Endowment for Financial Education® (NEFE®) and the National Council on Problem Gambling. It is designed to provide you, as the treatment professional, with a basic understanding of the financial issues that confront the problem gambler, and what financial strategies can help the gambler and his or her family stabilize and improve their financial situation.
The guide addresses such issues as financial warning signs of a gambling problem and ways to identify sources of income and assets that potentially can feed the gambler’s habit. It illustrates how to establish a workable household budget, remove household finances and assets from the gambler’s control, and set up a realistic repayment schedule for gambling and other debts. It also looks at bankruptcy, financially stressful life events, taxes, and the controversial issue of investing. You will come away with a better understanding of basic financial terminology and concepts. A list of financial resources is included at the end of the guide.
The material in this guide is not intended to transform the treatment professional into an expert in personal finance, nor to act as a substitute for financial professionals. Indeed, it often is imperative to encourage the client to work with financial professionals such as debt counselors, financial planners, attorneys, or CPAs. However, it also is important that you not merely refer clients to a financial professional and from that point on discuss nothing regarding their financial problems.
You should work closely with financial professionals to help your clients, and having a basic understanding of the financial issues involved will enhance that professional relationship. Understanding and addressing the financial issues during your therapy work with clients also will enhance the chances for a positive outcome to this devastating disorder.
Ted, age 47, began playing video poker at a bar not far from his mortgage business shortly after his third marriage. Soon, he was losing $200 a day. For a while, he was able to hide his losses because he and his wife maintained separate checking and investment accounts.
Eventually, his wife found out. He promised he would never gamble again. He went to Gamblers Anonymous meetings for a while, but eventually started gambling again. His wife threatened divorce. Again, he promised to quit, but didn’t. With the help of his office staff, his wife searched for his financial records.
They learned that he’d drained the cash value in his and his children’s life insurance policies, cleaned out his daughter’s college tuition money, sold off mutual funds, and raided his business accounts. In all, he’d gambled away $150,000 in one year. Confronted by his wife, his children, and his employees, he agreed to a residential treatment program, where he turned his life around.
Gambling Has Gone Mainstream
Twenty-five years ago, legalized gambling was rare, confined to the Nevada desert, Atlantic City, a few racetracks, and two or three state lotteries. Today, gambling has gone mainstream, now available at your local convenience store, and often state-run.
Some form of gambling is legal in 47 states, according to the 1999 final report of the National Gambling Impact Study Commission. Gambling has become socially acceptable. A 1999 Gallup poll found that two-thirds of American adults approve of legalized gambling. It is a source of revenue for states and charities and is viewed as an economic generator for local communities.
New forms of gambling have mushroomed. They include state lotteries, scratch games, casinos, bingo, video poker, slot machines, video keno, sports wagering, pari-mutuel betting on horses and greyhounds, and back-room poker games. Some problem gambling experts even consider investing as a form of gambling.
Gambling outlets also have mushroomed. “Convenience” gambling, such as video poker, has sprouted up in bars, truck stops, supermarkets, and bowling alleys. You can gamble on riverboats, offshore ships, cruise ships,
Native American reservations, in casinos, and on international airline flights. Problem gamblers now can bet on bingo, casino-style games, and sporting events from the convenience and privacy of their home PC over the Internet—and charge it to their credit card!
Problem gambling often leads to the destructive breakup of close relationships.
Rise in Problem Gambling The 1999 National Gambling Impact Study estimates that of the 125 million Americans who gamble at least once a year, approximately 7.5 million have some form of gambling problem, with another 15 million “at risk” of developing a gambling problem. Some researchers claim that problem gamblers pay half of the nation’s $51 billion annual gambling losses.
Social and Personal Costs
Problem gambling creates immense costs to society, individuals, and their families. Problem gamblers are more likely than the general population to commit crimes such as theft embezzlement, writing bad checks, or prostitution to pay for their habit.
They are more prone to personal health problems, depression, and suicide. The rate of attempted suicides among gamblers is the highest of all psychological disorders. Some problem gamblers have even committed suicide so that a life insurance payout could help their financially struggling family.
Problem gambling often leads to the destructive breakup of close relationships with partners, friends, and family. Families with a problem gambler are more likely to experience divorce, domestic violence, and child abuse.
Children of problem gamblers are more likely to do poorly in school, become depressed, have drug problems, or become problem gamblers themselves.
The financial costs also are staggering. A study by the National Opinion Research Center at the University of Chicago estimates that problem gambling costs society $5 billion in jobless benefits, increased levels of crime and incarceration, and medical treatment. Other experts claim that this number is low.
At a personal level, gamblers are more likely to:
• lose their jobs, be demoted, or be underemployed
• fall deeply into debt and file for bankruptcy
• lose their homes and other personal property(one in five homeless individuals attribute gambling as a cause)
• lose their businesses
• depend on welfare
• accumulate legal fees due to divorce or criminal activities
• run up bills for medical and mental health care treatment
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Behavioral Health Rehabilitative Specialist & Addiction Counselor