Bankruptcy rates have reached record levels in the United States despite a relatively robust economy. Many observers see a strong link between the spread of legalized gambling and the recent rise in bankruptcy filings. There is an abundance of evidence to support their contention.

* The Consumer Credit Counseling Service of Des Moines reported that southwestern Iowa, the location of Council Bluffs-home of the state's three largest slot palaces-had the highest increase in bankruptcies in the United States for 2001.1
* A 1997 nationwide study found that the bankruptcy rate in counties with at least one gambling establishment (race tracks, casinos, and jai alai frontons) was 18 percent higher than for those counties without gambling. The rate was 35 percent higher for counties with five or more gambling facilities.2
* Iowa counties with a casino, racetrack or riverboat casino have a bankruptcy rate 21 percent higher than the state average.3
* Nevada had the fourth-highest bankruptcy rate in the nation in 1996. Mississippi, the state with the second-highest level of gambling per-capita, ranked fifth in the nation in per-capita bankruptcy filings.4
* Atlantic County, New Jersey, home of Atlantic City, has by far the highest bankruptcy rate in the state.5
* Six of the 16 counties with the highest bankruptcy rates in the nation in 1996 were located near the 10 riverboat casinos in Tunica, Mississippi. Shelby County, Tennessee (home to Memphis), had the highest bankruptcy rate in the nation - four times the national average.6 Memphis, which is within an hour's drive of Tunica, ranks as the number six "casino feeder market" in the country, producing 6 million casino visits in 1996.7
* Prince George's County, Maryland, the only county in the state where casino gambling was legal in 1996, also had by far the state's highest bankruptcy rate that year.8
* The two California counties with that state's highest bankruptcy rates, Riverside and San Bernardino, are both adjacent to Las Vegas.9
* Gambling-related bankruptcies in metro Detroit increased by as much as 40-fold within a year and a half of the opening of Casino Windsor, just across the Detroit River, according to local bankruptcy attorneys.10
* Various studies of pathological gamblers show that 20 percent or more eventually file for bankruptcy.11
* SMR Research Corporation, in its lengthy study, "The Personal Bankruptcy Crisis, 1997," concluded, "It now appears that gambling may be the single fastest-growing driver of bankruptcy." The report also determined that in those areas near major casinos, "Gambling-related bankruptcies account for a good 10% to 20% of the filings."12

Footnotes
1
2 The Personal Bankruptcy Crisis, 1997: Demographics, Causes, Implications & Solutions," SMR Research Corporation, 1997, p. 117.
3 John McCormick, "Many Iowans Going for Broke," Des Moines Register, June 15, 1997, p. 1. (Note: For the years 1991-1996.)
4 Calculations based on data provided by the American Bankruptcy Institute.
5 "The Personal Bankruptcy Crisis, 1997," op. cit., p. 117.
6 Ibid., p. 121. (Note: Among counties with a minimum population of 25,000.)
7 "Harrah's Survey of Casino Entertainment, 1997," Harrah's Entertainment Incorporated.
8 "The Personal Bankruptcy Crisis, 1997," op. cit., p. 123.
9 Ibid.., p. 117.
10 Ron French, "Gambling Bankruptcies Soar," Detroit News, December 3, 1995, p. A1.
11 William N. Thompson, Ricardo Gazel and Dan Rickman, "The Social Costs of Gambling in Wisconsin," Wisconsin Policy Research Institute Report, July 1996, p. 15; Henry R. Lesieur and Christopher W. Anderson, "Results of a 1995 Survey of Gamblers Anonymous Members in Illinois," June 14, 1995; "The Personal Bankruptcy Crisis, 1997," op. cit., p. 124.
12 "The Personal Bankruptcy Crisis, 1997," op. cit., pp. 116, 124.