Volume 18, Number 5
July/August 2001

Other Bumps in the Road

GAMBLING

By Paul R. Ashe

Gambling appears poised to replace baseball as our national pastime. Last year, 85 percent of the American public gambled in excess of $700 billion. In addition, many trillions of dollars are gambled annually in various financial markets. It is estimated that 10 to 15 percent of those who gamble have a gambling problem. While less than 4 to 5 percent are considered pathological (compulsive) gamblers, many more people experience severe consequences from their gambling activities.

Pathological gambling is a mental health disorder in which an individual has a psychologically uncontrollable preoccupation with the urge to gamble, eventually resulting in damage to vocational, family, and social relationships. It is characterized by a chronic and progressive inability to resist the impulse to gamble. It was first diagnosed and recognized by the American Psychiatric Association in 1980 and was subsequently included in the Diagnostic and Statistical Manual ( DSM-IV).

A lawyer who is a compulsive gambler can be very dangerous. By the nature of their practice, lawyers are often exposed to fiduciary relationships involving large sums of money, which serve as the commodity or "drug of choice" for the gambler. A lawyer who may already be predisposed to gamble, whether on a casino game, horse or dog race, lottery ticket, or via the Internet, should be aware of some of the inherent danger signs that could result in complete devastation, including prison, bankruptcy, or death.

Gamblers Anonymous, an international organization founded in 1957, lists the following 20 questions (reprinted with permission from Gamblers Anonymous) as a means of determining whether a person is a compulsive gambler. Most compulsive gamblers will respond "yes" to at least seven of these warning signs.

1. Did you ever lose time from work or school due to gambling?
2. Has gambling ever made your home life unhappy?
3. Did gambling affect your reputation?
4. Have you ever felt remorse after gambling?
5. Did you ever gamble to get money with which to pay debts or otherwise solve financial difficulties?
6. Did gambling cause a decrease in your ambition or efficiency?
7. After losing did you feel you must return as soon as possible and win back your losses?
8. After a win did you have a strong urge to return and win more?
9. Did you often gamble until your last dollar was gone?
10. Did you ever borrow to finance your gambling?
11. Have you ever sold anything to finance gambling?
12. Were you reluctant to use "gambling money" for normal expenditures?
13. Did gambling make you careless of the welfare of yourself or your family?
14. Did you ever gamble longer than you had planned?
15. Have you ever gambled to escape worry or trouble?
16. Have you ever committed, or considered committing, an illegal act to finance gambling?
17. Did gambling cause you to have difficulty in sleeping?
18. Do arguments, disappointments or frustrations create within you an urge to gamble?
19. Did you ever have an urge to celebrate any good fortune by a few hours of gambling?
20. Have you ever considered self destruction or suicide as a result of your gambling?
Betting on the Market

One of the most common areas that affects lawyers and other professionals is the Internet. In addition to thousands of online gambling sites that offer traditional games such as blackjack and poker, the Internet allows for many other forms of gambling. Today, it is just as easy to place a bet on the New York Stock Exchange as it is on the New York Yankees. Unfortunately, some people "play" the stock market and approach the financial marketplace with the mentality of a gambler. All forms of investing involve risk to some degree. The problem gambler (mainly action-seeking gamblers) can find this risk as addictive as a game of high-stakes poker.

Online access has made market gambling easier, faster, and ultimately cheaper. According to experts, day trading is the prime example. Day trading is when investors buy and sell stocks dozens or even hundreds of times daily, closing out their positions at the end of the day. Day traders usually have no knowledge of the companies behind the stocks they trade, nor do they care to. Their only concern is the fluctuation in the companies' stock prices, which keeps them glued to their computer screens. The vast majority of day traders lose money, with some even losing their homes, financial assets, and lives.

Paul Good, a clinical psychologist in San Francisco, developed 11 warning signs that may reveal whether an investor is actually a gambler in disguise. Anyone who exhibits five or more of these signs may have a gambling problem.

1. High-volume trading in which the "action" has become more compelling than the objective of the trade.
2. Preoccupation with one's investments (e.g., excessive studying of investment newspapers or websites, thoughts about the market that interfere with work or one's social life, constant calls to one's broker).
3. Needing to increase the amount of money in the market or the "leverage" of one's investments to feel excited (e.g., using options or future contracts, borrowing on margin).
4. Repeated unsuccessful efforts to stop or control one's market activity (e.g., drawing on accounts previously declared off limits, contradicting or changing limit orders on losses or gains).
5. Restlessness or irritability when attempting to cut down or stop market activity, or when cash is accruing in one's account.
6. Involvement in market activity to escape problems, relieve depression, or distract oneself from painful emotions.
7. After taking losses in the market, continuing to take positions or increasing one's position as a way of getting even.
8. Lying to family members and friends to conceal the extent of involvement in the market.
9. Committing illegal acts, such as forgery, fraud, theft, or embezzlement, to finance market activity.
10. Jeopardizing significant relationships, one's job, or educational or career opportunities because of excessive involvement in the market.
11. Relying on others to provide money to relieve a desperate financial situation caused by gambling in the markets.

Because of the financial risk inherent in market gambling, the addictive nature of trading, and the easy access to markets these days, some experts believe that problem gamblers should never invest. These experts view the stock market as a breeding ground for compulsive gambling, and the New York Stock Exchange and the NASDAQ as the largest casinos in the world. It is estimated that $11 trillion was traded on the various exchanges last year alone, but only 5 percent of this amount was for non-speculative investments (Problem Gamblers and Their Finances-A Guide for Treatment Professionals, National Endowment for Financial Education and National Council on Problem Gambling).

Gambling as a Defense

Compulsive gambling is not generally considered a valid defense to any criminal act performed by the gambler. Some courts, however, have allowed compulsive gambling to be offered as a mitigating factor in sentencing or disbarment proceedings. Unfortunately, most cases that have utilized the disease of compulsive gambling as grounds for action are unreported because they were not appealed. Legal disciplinary cases are unusual in this regard because most of these cases are reviewed by the state's supreme court. In fact, of 107 cases reviewed by this author, 87 cases involved lawyers. In attorney disbarment proceedings, state courts and bar associations typically refuse to allow compulsive gambling as grounds for a defense because, they argue, the primary goal in disciplinary proceedings is not to punish the individual lawyer, but to protect the integrity of the profession.

In every reported case of attorney discipline where a defense of compulsive gambling was raised, the lawyer was disbarred for a substantial period of time. However, proof of a causal connection between a gambling addiction and professional misconduct can be a mitigating factor that justifies a sanction less than disbarment. Further, a record of recovery and rehabilitation for an addiction, including gambling, should be considered a compelling mitigating circumstance in disciplinary proceedings.

In the event that lawyers or their clients are confronted with a case requiring a compulsive gambling mitigation defense, the elements of such a defense should include the following six Rs:

1. Remorse-Demonstrate evidence of regret for past misdeeds.
2. Repentance-Show changes for the better made in light of one's past misdeeds.
3. Restitution-Detail and structure plans for repayment of debt or illegally obtained funds (in accordance with the Gamblers Anonymous fourth step, during which the compulsive gambler would set up a pressure relief group meeting and make a plan).
4. Rehabilitation-Outline the terms and types of treatment plans utilized.
5. Recovery-Delineate the type of lifestyle changes implemented to prevent a relapse or a return to criminal acts.
6. Resentment-Commit to not harboring any animosity towards the prosecuting agency or official.

It is crucial that you document commencement of the six Rs before the case is presented in court, which requires the compulsive gambler to begin the process as quickly as possible.

Paul R. Ashe is a lawyer and past president of the National Council on Problem Gambling. He is currently an investment banker and president of the Florida Council on Compulsive Gambling in Orlando, Florida. He can be reached at PRAChief@aol.com.

The author of this article has granted permission for reproduction of the text of this article for classroom use in an institution of higher learning and for use by not-for-profit organizations, provided that such use is for informational, non-commercial purposes only and any reproduction of the article or portion thereof acknowledges original publication in this issue of GPSolo, citing volume, issue, and date, and includes the title of the article, the name of the author, and the legend "Reprinted by permission of the American Bar Association."

Where to Turn for Help

Any lawyer can obtain a list of local resources from your local lawyers assistance program, your state's Council on Compulsive Gambling, the National Council on Problem Gambling (800/522-4700 or ncpg@erols.com), or Gamblers Anonymous International Service Office (213/386-8769 or isomain@gamblersanonymous.org).

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