Weak Link Between Gambling And Bankruptcy
August 12, 1999
With gambling rates increasing in tandem with rates of bankruptcy, Congress last year directed the Treasury Department to study a possible relationship. But Treasury says the relationship is "statistically weak."
- It found that on average, "frequent high-risk gambling raises the probability of bankruptcy by six percentage points from that of the base group, occasional gamblers."
- It added that frequent high-risk gambling "does appear to be associated with a greater likelihood of declaring bankruptcy, but the low prevalence of this type of gambling suggests that it has a relatively minor impact on the overall bankruptcy rate."
- Between 1993 and 1997, gross wagering jumped 53 percent, while personal bankruptcies grew at an average annual rate of 11 percent from 1985 through 1998.
- Bankruptcies hit a record 1.4 million last year.
Treasury attributed the rise in personal bankruptcies to a host of factors -- including increased debt levels relative to income, greater use of credit cards, and a lower social stigma attached to filing. An increase in divorces and higher medical costs were also cited.
Source: Staff Writer, "Study Finds Indistinct Link Between Gambling, Bankruptcy," Wall Street Journal, August 12, 1999.
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