NAADGS 2023 Budget Update Shows 28% Jump in Spending for Problem Gambling Services

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State-level spending on problem gambling services accelerated considerably last year, with the national total allocations rising from $105 million to $134 million in fiscal year 2023, a 28% year-over-year increase. A new report from the National Association of Administrators for Disordered Gambling Services (NAADGS) provides insight into the increase and which states are taking their responsibilities most seriously.

From 2006 to 2023, state’s spending on problem gambling services increased at an average pace of just 12% annually. Compared to that baseline, the growth in spending for 2023 is two and a half times the average.

However, despite overall improvements in funding for problem gambling support, disparity leaves some who need help without treatment or support options.

Dr. Jeff Marotta, principal investigator at Problem Gambling Solutions, which collects and analyzes the data for the report, told Bonus that it’s ultimately a good news—bad news story.

Marotta said it’s good to see the overall increase in allocated funding. However, funding inequalities between states and logistical challenges blocking the spending of earmarked dollars are still problems requiring solutions.

The good news is we’re seeing the largest increase in investment in problem gambling services in the US from an aggregate level over the years that we’ve been tracking. So that’s great.

The bad news is there are still these large gaps in the safety net for folks who are struggling with gambling issues… The other bad news is, there’s a desperate need to fund these services, yet not all the monies are being spent.

State Problem Gambling Allocations Rise Overall

As NAADGS’ 2023 Budget Update of Publicly Funded Problem Gambling Services in the United States notes, funding allocations vary widely by state.

Eight states invested nothing at all in the treatment of problem gambling. These are states that have little in the way of regulated gambling, with four of them lacking so much as a state lottery: Alaska, Alabama, Hawaii, Idaho, Mississippi, Utah, and Texas.

Fortunately, for the 43 states (including the District of Columbia) with state funding, 2023 data completion rates were high, with 100% reporting allocations and 98% reporting expenditures.

The survey found that in 2023, 40% of states increased problem gambling funding over 2022 levels. Of the remaining jurisdictions, 42% maintained the same level of funding, while 18% decreased earmarked dollars.

Of those that increased funding, Massachusetts put aside the most money in 2023, budgeting $22.6 million for problem gambling support. That’s a 112.8% increase over 2022’s budget of almost $11 million. Meanwhile, Kentucky, which only initiated problem gambling funding in 2023, pulled up the rear with $0.1 million in allocated funds.

Besides Massachusetts, New York, and Tennessee committed substantially more to problem gambling coffers in 2023, allocating $9.6 million and $1.2 million, respectively. For New York, that’s a 166.7% increase over 2022 levels. And, with only $180,000 allotted to problem gambling in 2022, Tennessee had the most significant growth at 586.1%.

Aggregated across all 43 funding states, 2023 problem gambling budgets averaged $3.1 million, an increase over 2022’s average of just over $2 million.

However, total allocations still fall below NAADGS’ recommendation that states earmark 2% of gross gaming revenues (GGR) for problem gambling needs. Notably, the American Gaming Association (AGA) calculated 2023’s nationwide GGR at $66.52 billion. If 2% were the standard carve out, state problem gambling funding would have hit $1.33 billion in fiscal ’23.

Allocations Versus Actual Problem Gambling Spend

Like overall funding, 2023 per capita allocations varied widely from state to state.

Once again, Massachusetts and Kentucky came in first and last place with average per capita spending of $3.22 and $0.002, respectively. Aggregated across states, the average spend shifts to $0.54 per resident.

Seven states allocated $1 or more per resident for problem gambling funding in fiscal 2023, up from only four states in 2022.

Further, the data shows states are getting better at spending their allocated budgets, with only 49% reporting an actual spend of less than 95% of their total allocations. In 2022, 59% reported similar spending problems. Also, this year, more states (44% versus 32%) spent within 5% of their allocated budgets. However, only 7% (compared to 9% in 2022) supplemented designated funding by at least 5% to cover needs beyond what allocations could cover.

COVID-Rebound, Infrastructure Holes Impacting PG Spending

Dr. Marotta explained that in 2023, many of the same factors inhibiting 2022 spending were at play, including COVID-related impacts, which he called “fairly enduring.”

COVID really had a significant negative impact on the behavioral health workforce, inluding among the state administrators. So we saw a lot of work shortages, both among the frontline workers who provide problem gambling treatment and prevention services and state employees.

Marotta also said that a lack of infrastructure and increased funding in states that tie funding to gambling revenues often complicate matters.

As a result, he said it’s been difficult for agencies to “get the dollars out the door.”

Agency comments shared with Bonus back those claims, with one noting it bases its initial budget on a conservative estimate. Once finalized, it said, there’s regularly an unspent balance.

Another agency spoke about the impact of missing infrastructure:

There were hold-ups in procurement that slowed down our ability to get treatment and recovery funding into contract. And we were still in a building phase of getting our treatment and recovery services running, so we were not sure how much to put into contracts.

Federal Funding Could End Disparity

Federal funding for problem gambling is “desperately needed,” said Dr. Marotta, while noting the same disparities aren’t present for other issues, like substance abuse.

There’s a federal agency in the US that has oversight over tracking the extent of the problem. They assist the states in their planning on how to use resources, and they provide a significant amount of funding.

Further, he said federal programs encourage further state investment with tools like fund-matching opportunities. But as things exist, we’ve created a system of “haves and have-nots.”

Marotta said when he talks to states without dedicated funds for problem gambling support, they often point out that there’s support available through general state-funded mental health and addictions support programs. The problem, he said, is that existing support workers are usually not trained to deal with gambling addiction. Even when they are, they often see so few people that numbers are insufficient to build support networks.

He also added that those general programs often serve low-income residents. But, when it comes to gambling problems, people who need help can look solvent on paper while their debt levels reflect a different reality.

If a state is going to profit from legalized gambling, then feels like they have a duty of care for their citizens to set aside some of those revenues to address issues related to that legalized gambling, and not all are doing that.

About the Author

Robyn McNeil

Robyn McNeil

Robyn McNeil (she/they) is a Nova Scotia-based writer and editor, and a lead writer at Bonus. Here she focuses on news relevant to online casinos, while specializing in responsible gambling coverage, legislative developments, gambling regulations, and industry-related legal fights.
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