This is a video gambling machine.
Across the U.S., you’ll find more than a 100,000 of them offering up electronic versions
of games like poker or slots.
The machines — designed to be highly entertaining and addictive — have taken the gambling
industry by storm.
23 states have them in state-sponsored casinos or other gambling establishments, and now,
more states are considering legalizing them outside casinos — in places like bars and
restaurants.
But, why?
We looked at the state with the most locations to legally place a bet in America.
No, not Nevada.
Illinois.
People love gambling.
This has been true for centuries...across cultures.
And in the US — it’s also been a source of government revenue.
When the colonies needed to build hundreds of schools in the 18th century — they got
funding from some of America’s first lotteries.
The Washington Monument?
Also funded in part by lotteries.
And when the Great Depression hit, Nevada legalized gambling.
States across the country continue to count on it to bail them out of tough financial situations.
Take Illinois.
In 2009, the state passed the Video Gaming Act, its largest gambling expansion since
the creation of the state lottery in the '70s.
The law paved the way for video gambling machines to go into truck stops, restaurants — even
hair salons.
Today, more than 30,000 of these machines operate outside of casinos in Illinois — more
than any other state in the country.
The problem is — the machines can be highly addictive.
The algorithm-driven machines are essentially made to do three things: accelerate play,
extend the time people play them, and increase the amount of money they wager.
For example — on old-fashioned slots, you pulled a lever that spun physical reels.
Each reel had a certain number of symbols and blank spaces on them, and depending on
where they landed, if the symbols lined up across this payline, you’d win a jackpot.
But with electronic machines — while you may
see virtual reels spinning, the symbol that the reels land on is no longer determined by the
pull of a lever. It’s decided by an algorithm the moment you click play.
The reels can be programmed to have more losing symbols and fewer winning ones, so game designers
can reduce the odds of hitting a jackpot.
They could make a machine with over 500 stops on the reels,
meaning the odds of winning would be less than
1 in 100 million.
The virtual display also creates deceptive tricks like the “near miss”, when jackpot
symbols appear right above or below the winning line — it’s an image that can make
players think they were so close to winning the jackpot and it's designed to keep them going.
These characteristics have earned the machines nicknames like “electronic morphine” and
“the crack cocaine of gambling.”
About a decade ago, Illinois made these machines widely accessible across
the state.
“The economy still reeling from a recession.”
“This is a financial crisis-led recession.”
“The worst recession since the 1930s.”
During the financial crisis in 2009, Illinois wanted money to help fund a big infrastructure
program that would create jobs.
“We know our economy needs a boost, our economy in our country, our economy in our state."
So, tucked inside a larger bill, the state passed the Video Gaming Act.
They agreed to expand gambling in the hope that the revenue from video gaming taxes would
help pay off their debts.
The state started borrowing money, assuming it could pay much of it back through taxes
from video gambling.
But here’s the thing: It took more than three years to get video gambling up and running.
By the time video gambling went live, in September 2012, the state had already borrowed more
than $5 billion.
Debt payments had reached about $340 million
a year.
While the machines were supposed to raise $300 million a year to cover those debt payments,
in 2012, video gambling brought in just $31 million.
A decade later, the industry has finally started hitting revenue projections.
But the Illinois Gaming Board, the agency tasked with keeping gambling in check, is
largely underfunded and has struggled to regulate the growing industry.
A small group of gambling companies has made nearly 2 billion dollars.
And politicians have received hundreds of thousands of dollars in contributions from
an industry group.
Meanwhile, in rural areas and small towns hit hardest by the state’s economic slump,
gambling addiction has become a serious problem.
But the state now spends less on addiction services than it did before legalizing video
poker and slots.
What’s happened in Illinois could be a sign of what’s to come in the rest of the country.
A 2018 Supreme Court decision legalized sports betting, paving the way for a new frontier
for gambling in the US.
As more states look to gambling as a possible
way to stabilize their finances, Illinois’ experience with video gambling stands as a
cautionary tale.
That maybe, it’s a risky bet.
Thanks for watching. This video was produced in collaboration with ProPublica Illinois,
a nonprofit newsroom headquartered in Chicago
that's dedicated to investigative journalism with moral force.
If you want more of their reporting, check out the link below to sign up for their newsletter.
And if you want to know more about video gambling, check out their feature piece. Thanks.