By John Warren Kindt, 2/13/2007 5:51:34 PM
As requested, this summarizes gambling’s impacts on U.S. economic national security, military readiness, and terrorism (including U.S./foreign organized crime). Decision-makers should visualize the most outrageous gambling environment possible and then strategize that gambling environment being extended into the entire developing world and the strategic world economy–but without U.S. high-caliber regulatory mechanisms. Recognizing these gambling scenarios, France, Italy, and Austria opted in 2006 to maintain their anti-gambling laws despite being censured by the European Commission, and thereby creating issues for future E.U.-U.S. interests in economic national security.
By comparison in 2006, gambling issues prodded Russian President Vladimir Putin to close 2,230 Russian casinos. By 2007 only four gambling venues will be allowed in “uninhabited” areas of Siberia, the Far East, and European Russia (but not near Moscow). China has maintained a total gambling ban (except Macao). Examples include:
Turkey (legalized casinos 1983, banned casinos1998);
India (banned lotteries 1998);
Norway (ban on all slot machines 2007);
Trinidad (banned all slot machines 2006, online gambling ban likely 2007);
South Korea (banned online gambling 2006); and
Kazakhstan (banning all gambling 2007, except two isolated areas).
In 1999, the U.S. National Gambling Impact Study Commission (NGISC) recommended the re-criminalization of selected gambling activities, as well as a moratorium on the legalization of any more gambling of any type anywhere in the United States. However, Las Vegas interests continued to use Jack Abramoff tactics to legalize more gambling worldwide–deceiving Third-World governments into believing gambling is economic development and thereby destabilizing the infrastructures and economies of U.S. allies.
In the 2002 Economic Stimulus Act (ESA) designed to help the U.S. economy after 9-11, the Congressional Gaming Caucus bragged that it inserted a $40 billion tax write-off for casinos (for gambling slots/technologies), a supposed cut from the requested $133 billion –more than the $80 billion cost of the 2003 U.S. incursion into Iraq. After the 1999 NGISC, it also took Congress 7 years finally to enact the 2006 U.S. Unlawful Internet Gambling Enforcement Act (UIGEA), which was quickly emulated by South Korea. Via the UIGEA, Congress began the re-criminalization process for gambling.
During the 1930s Great Depression, President Franklin Roosevelt and other governments worldwide did not decriminalize gambling, because economies cannot gamble their way to prosperity. Gambling economies transfer consumer wealth, destroy productivity, undermine economic national security, and destabilize banks, financial institutions, and stock markets. For example, the UIGEA caused the overnight loss of billions of dollars in “speculative bubble” gambling stocks, particularly on the London Stock Exchange–impacting allies. The surge in Australian-Asian gambling as interfacing with gambling stocks on the Tokyo and Asian Exchanges constitute strategic economic threats.
Simultaneously, gambling worldwide creates:
(1) new addicted gamblers like drug addiction (up 100% for adults, up 200% for teens/college-age);
(2) new personal, professional, and business bankruptcies (up 18% to 42%); and
(3) new crime and corruption (crime increasing 10% per year in gambling areas).
Fueled by gambling and the Akaka Bill philosophy of Native Americans as “independent sovereigns,” in 2006 for example, Navajo President Joe Shirley announced “a trade agreement between two sovereign nations,” the Navajos and Fidel Castro’s Cuba. Tribes are using billions of gambling dollars for legal test cases and strategies expanding “tribal sovereign immunity”–superseding federal/state laws and opening U.S. borders.
As President Theodore Roosevelt’s Administration became the “Trust Busters” enhancing U.S. economic dominance of the 20th Century, the United States must reassert U.S. ethical economic dominance for national security. Accordingly, it is recommended that The President via Executive Order and other appropriate means:
1. Direct the U.S.-U.N. delegation, the State Department, the Department of Defense, and all U.S. agencies to return to pre-1985 restrictive philosophies on gambling and to negotiate with all nations, particularly U.S. allies, to ban all types of gambling;
2. Eliminate retroactively the $40 billion in ESA tax write-offs claimed by gambling facilities and prevent such future write-offs via IRS determinations (if appropriate) that gambling technologies do not qualify under the ESA or similar legislation;
3. Impose a moratorium on recognizing any new tribes or tribal gambling facilities, as already suggested by Members of Congress (and the NGISC call for a moratorium);
4. Ask Congress to remedy the public’s so-called “climate of corruption” by reversing the FEC’s “Abramoff-abuse” rulings allowing unlimited political contributions by tribes, repealing the Indian Gaming Regulatory Act (IGRA), and changing gambling facilities into schools/businesses (as has already been done in Omaha, Nebraska);
5. Ask Congress, in the alternative, to enact Rep. Charles Dent’s bill H.R. 3431 and the Shays-Wolf bill establishing a Commission on Native American Policy.
During the oil crises of the Ford, Carter, and Reagan Administrations, the Presidential option of the states losing federal funds prodded states to lower speed limits to 55mph and take other actions. To respond to 9-11, the ESA should have required the states to re-criminalize lotteries and all state-sanctioned gambling to “pump-prime” the economy with consumer dollars. In any future crises, The President should implement such action.
John Warren Kindt is a professor at Harvard University. He presented this paper at the International Business Conference on February 10-11, 2007. The study was sponsored by Harvard Business School, Harvard Law School and Kennedy School of Government. After the conference, this memo/presentation was forwarded to appropriate Members of Congress for use as a bipartisan reference. Reach Professor John Warren Kindt at Box One, Wohlers Hall, 1206 South Sixth Street, Champaign, IL 61820; Phone: 217-333-6018 and Fax: 217-244-7969
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