Unfolding Dubai's Debt Crisis

Interview by IslamOnline.net. Dec 2, 2009

Unfolding Dubai's Debt Crisis
By Amr Taha, Staff Writer-IslamOnline.net

On November 25, 2009, the Dubai Government asked Dubai World, a government-backed conglomerate, to agree to delay its repayments until May 2010.

With the number is so much unconfirmed, Dubai reportedly owes the world more than $60billion of external debts.

Dubai's economy that has been built on real estate and luxury tourism industries has caused the bubble, fueled by oil boom and unregulated markets soaked in speculation, to burst.

Al-Nakheel, a subsidiary of Dubai World, is due to pay its $3.5 billion Shariah-compliant bonds (Sukuk) in December 14, triggering many to ask with suspicion about possible scenarios if the company defaults on its payments.

IslamOnline.net's Politics in Depth interviewed Dr. Parvez Ahmed, associate professor of finance, Coggin College of Business of the University of North Florida, and a US Fulbright scholar to shed light on the consequences of the crisis, the misuse of Islamic finance, and the way out.

IslamOnline.net (IOL): How far the debt crisis will affect Dubai in the short and long terms?

Dr. Ahmed: With $60 billion debts, Dubai could consider defaulting. The debt is a sovereign [one], borrowed by [Dubai].

There have been other countries that defaulted because of debt. In the case of Dubai, $60 billion is a large amount of money, but not that large compared to other nations who defaulted.

A decade ago, Argentina had defaulted on $ 141 billion. Moreover, the external debt of the United States is $15 trillion. Yet, the United States is not at any danger of default.

There is a concern and a silver lining of the debt crisis in Dubai.

The silver lining is that the situation is not as grave as some commentators said.
Economists will look at the ratio of the debt to the GDP when evaluating the debt crisis of any country.

The United Arab Emirates' debt is relatively smaller than those of the United States, the United Kingdom, and many Western nations.

In Dubai, the debt at a special ratio to the GDP is 37 percent. In the United States, it is 75 percent. The ratio of debt to the GDP in the United Kingdom is 375 percent. In Ireland, it is alarmingly at 960 percent.

Therefore, the United Arab Emirates, in the long run has the capacity to service that debt.

However, in the short run, the danger comes from two sources.

Firstly, if Abu Dhabi will pay off Dubai's debts, Dubai will default and Abu Dhabi will rescue it.

Then, this creates economics of moral hazard; it is created when an economic action has been taken to help defaulting entities, causing systemic problems to the economy.
Will this lead other countries to default on their debts, hoping other countries could help?

In the United States, [economics of moral hazard posed the question] whether it encourages other banks to take risky positions, even wrong, hoping that somebody will [bear the brunt of the risk and help them]?

It creates an unfair situation when banks and financial institutions benefit from their successful risks while they do not have the responsibility for unsuccessful ones.

In the short run, bail out may be beneficial, but in the long run it will create moral hazards. In this way, one could expect what would happen if Ireland defaults.

The second source is that many Western powers, like the United States, the United Kingdom, are facing problems at home, like huge public deficits.

The United States is embroiled in two wars in Afghanistan and Iraq, and it suffers a lot of debt; it is $15 trillion.

In terms of external debt per person, every person owes $930 of debts in the United Arab Emirates while in the United States, every citizen owes $2000 in debt. In Egypt, it is $1000.

IOL: How far has Dubai's debt crisis affected Islamic economy, especially with concerns that Sukuk creditors may not be protected?

Dr. Ahmed: The default of sukuk (Islamic financial certificate or bonds) will deal a severe blow to the development of Islamic finance.

In the middle of 2008, when the world economic crisis hit the world, Islamic products were not affected as other conventional ones.

Therefore, many people, experts, and economists look at the Islamic finance as the solution.

Yet, I found that this assumption is too hasty.

The current situation of Islamic finance is not that different from the conventional one. It is different in form, not function.

When one strips away externalities, the core of Islamic finance is not that different from[those of the] conventional finance, thus subjeted to the same kind of problems facing conventional banks.

In the eyes of the laws, Islamic finance is not very different in terms of the process of default.

Sukuk bonds are subjected to the same standards of default. The difference between Islamic banks and conventional ones is a matter of semantics.

What happened in Dubai put the chill on the transaction of sukuk bonds.
It will affect the Islamic finance industry. Although the Islamic finance has many good sides, it is similar to conventional ones.

This encourages researchers, experts, economists, and businesspersons to find out a more holistic approach of Islamic finance.

It is wrong to focus on one aspect of Shari`ah while neglecting its other aspects. [Many tend] to focus only on issues like riba (interest), with less attention on issues of transparency, fighting corruption, social equality, and the like.

In Dubai, there are many questions about how the money flow — and where it was spent. Much of the investments in Dubai while spectacular appear to be very wasteful.

When people live beyond their means and in an extravagant manner, they really do not due justice to Shari'ah.

The goal of Shari`ah and Islam is to promote justice and equity, not to a small group of people, but to the majority of them.

Many are obsessed with riba, but not sustainable development, equitable development, social equality, transparency, and other issues, whichgives a negative image of Shari'ah.

IOL: What are the options for Dubai to repay its debts?

Dr. Ahmed: The available options are not very good. Default will happen, affecting properties prices.

Dubai's economy is [based] on luxury tourism and real estate. The default will hit economic activities.

This is a great time for big financial centers to develop a much more holistic and sustainable financial market globally.

Many notable Noble Prize laureates, like Stiglitz, called for the restructuring of the world economy.

If the basic problems are not properly addressed, we will see more defaults, and we already saw Iceland defaulting.

IOL: So, in your opinion, what is the way out?

Dr. Ahmed: I think we need fundamental changes.

Firstly, we should understand that the basics of the free capital system are not wrong. At the same time, there has to be much more emphasis on transparency — on how companies are investing their wealth.

Governments will have to take a much more educative role. Agencies (governmental or quasi-governmental) have to take on the responsibility of educating investors.

The Securities and Exchange commissions in the United States usually has that mandate. We need to give these agencies more power, not only in terms of law enforcement, but also the role of educating about markets.

More people are investing in markets and cannot afford big losses. At the same time, if not educated, they could face more problems. Therefore, the government should take the role of educating people about economy, its dangers, and the benefits of investments.

We need robust regulations and governmental actions in regulating the markets.
Secondly, we need anti-corruption measures. There is a fair amount of greed and corruption, especially in the developing economies.

Corruption can be in many forms, like concentration of wealth at the expense of the poor, which could potentially lead to social unrest.

Islamic finance can play a role, if it adds to its portfolio the dimension of fighting corruption, transparency, sustainable development, and social equality.

Amr Taha is a staff writer for the Politics in Depth section of IslamOnline.net. A graduate of the American University in Cairo, he holds a BA in political science with a specialization in international law and international relations. Contact him at politics.indepth [at] iolteam [dot] com

Stop the Looting

An abridged version appears in Islamic Horizons, Nov/Dec 2009 Issue.

There is virtually no major organized opposition to legalized gambling, except from Focus on the Family and similar evangelical Christian groups. Given Islam’s prohibition of gambling, Muslims should work with other concerned organizations to educate people about the ills of gambling and advocate more transparency in lotteries (such as better disclosure of the winning odds). For example, if players knew that the odds of winning the Mega Millions jackpot are 1 in 135 million, would they so willingly part with their hard-earned money? To help publicize such facts, Muslims should support the National Problem Gambling Awareness Week (www.npgaw.org), the National Council on Problem Gambling (www.ncpgambling.org), and HelpGuide.org - Gambling Addiction (http://helpguide.org/mental/gambling_addiction.htm).

Other religions oppose gambling as well. Dianne M. Berlin (vice chair, National Coalition against Legalized Gambling [www.ncalg.org]; coordinator, CasinoFreePA [www.casinofreepa.org]; and founder CasinoFree LanCo), told “Islamic Horizons” that “gambling is a form of theft” And that although the words “gamble” or “gambling” are not used, two of the Ten Commandments address gambling: not to covet other people’s possessions (Exodus 20:17) and not to steal (Exodus 20:15).

Rabbi Jill Jacobs (director, outreach and education, Jewish Council on Urban Affairs [JCUA]) and Noah Leavitt (director, advocacy and policy, JCUA) state that Jewish law virtually condemns gambling. One Talmudic opinion, found in a discussion in “Tractate Sanhedrin,” categorizes gamblers as thieves and thus disqualifies them from giving legal testimony. Maimonides, one of Judaism’s most important medieval authorities, defines gambling as stealing even if both parties agree to the rules of the game, for the winner “takes another's money for free” (“Forward Forum,” 21 Jan. 2005). Rabbi Ovadia Yosef, former Sephardic chief rabbi of Israel, extends this prohibition to state-run lotteries.

The essential problem, according to these thinkers, lies in gambling’s violation of the basic principle of rabbinic commercial law -- the terms of sale must be clear to both the buyer and the seller. In addition, locating casinos or advertisements for them in low-income neighborhoods violates the Biblical precept Ilifnei iver lo titen michshol: "(Do not place a stumbling block before the blind), generally interpreted as a prohibition on tempting a person to do something that she or he knows to be wrong.”

The Qur’anic word for gambling is maysir (2:119 and 5:90); the term often used in Islamic law to denote it is qimar. According to Abu Hurayrah, Prophet Muhammad prohibited gambling (“Sahih al-Bukhari,” no. 4579). In his commentary on 2:219, Abdullah ibn Abbas says “Al-maysir is al-qimar,” and that pre-Islamic Arabs would bet their wives wife and wealth (“Tafsir ibn Jarir,” 2:358). Ibn Abidin states: “Gambling is from the word qamar, ‘that which increases at times and decreases at other times.’ It is called al-qimar due to the possibility that each gambler may lose his wealth to his counterpart, and it is also possible that one may gain from the wealth of the other.”

Protestants have issued explicit prohibitions against gambling, and the United Methodist Church’s “Book of Resolutions” states: “Gambling is a menace to society, deadly to the best interests of moral, social, economic, and spiritual life, and destructive of good government. As an act of faith and concern, Christians should abstain from gambling and should strive to minister to those victimized by the practice.” Judaism takes a “dim view of gambling,” even describing the winner as a moral “loser” (Eliezer Danzinger, “What is the Jewish view on gambling?” www.chabad.org ). Hindu scriptures also prohibit gambling (e.g., Rig-Veda 10:34:13 and Manu Smriti 7:50).

In contrast, the “New Catholic Encyclopedia” describes gambling as “though a luxury (it) is not considered sinful except when the indulgence in it is inconsistent with duty.” The Catechism of the Catholic Church states: “Games of chance (card games, etc.) or wagers are not in themselves contrary to justice. They become morally unacceptable when they deprive someone of what is necessary to provide for his needs and those of others. The passion for gambling risks becoming an enslavement. Unfair wagers and cheating at games constitute grave matter, unless the damage inflicted is so slight that the one who suffers it cannot reasonably consider it significant” (William N. Thompson, “Gambling in America: An Encyclopedia of History, Issues, and Society,” [ABC-CLIO, Inc.: 2001], 317-24).

Even though lotteries are illegal in many (though not all) Muslim-majority countries, variant forms of gambling are commonly found. Legalized and state sponsored gambling traditions date back to colonialism. For example, in 1567 Queen Elisabeth established the first state lotteries; Egypt’s first casino, Casino Opera, opened in 1926; and the French opened casinos in Lebanon. They remain open today, although in many instances restricted to foreigners. After the 1971 Indo-Pak war, Prime Minister Zulfikar Ali Bhutto built a plush casino in Karachi because he thought tourism would expose Pakistanis to “more modern Islamic and non-Islamic views,” (Linda K. Richter, “The Politics of Tourism in Asia” [University of Hawaii Press: 1989]). A military coup toppled him, however, before it was opened.

Wagering upon such inhumane games like quail or cock fights remains common in many Muslim societies. The spending of some Muslim royalty in famous casinos is quite legendary. And many Muslims in North America not only purchase but also sell lottery tickets in through their convenience stores.

The mission of Prophet Muhammad was to be a “mercy to humanity (and other creations.” In this context, Muslims should find common cause with others in opposing the scourge of gambling and increasing normalization of gambling like attitudes in finance and investments.


An abridged version appears in Islamic Horizons, Nov/Dec 2009 Issue.

What lies behind the beaming lottery winners and oversized checks is misery, says Ellen Goodstein (Bankrate.com).

Television commercials and media stories depict winning the lottery as an American dream. But having piles of cash does not necessarily bring happiness, as pointed out by Ellen Goodstein, who cites the following examples: Evelyn Adams, a two-time winner of the New Jersey lottery (1985 and 1986) to the tune of $5.4 million, was reduced to living in a trailer. William "Bud" Post, winner of the $16.2 million Pennsylvania lottery (1988) ended up living on Social Security and food stamps. Suzanne Mullins, who won $4.2 million in the Virginia lottery (1993) is now deeply in debt to a company that lent her money using the winnings as collateral. Willie Hurt of Lansing, MI, won $3.1 million (1989) and within two years was broke and charged with murder, wasting his fortune on a divorce and crack cocaine. Charles Riddle of Belleville, MI, won $1 million (1975); afterward he got divorced, faced several lawsuits, and was indicted for selling cocaine. Eight years after winning $18 million in 1993, Missourian Janite Lee filed for bankruptcy.

The list of broken dreams abides. Most lottery winners learn that sudden money can cause as many problems as it solves. For many, it can cause a disaster because part of the problem is that they buy into the hype. Craig Wallace, an executive of a company that buys lottery annuity payments in exchange for lump sums, told Goodstein: "These people [winners] believe they are millionaires. They buy into the hype, but most of these people will go to their graves without ever becoming a millionaire.” Going broke is a common malady, particularly with smaller-amount winners.

Lottery marketers manipulate the situation to sell more tickets. Each winner is photographed with a 3’x5’ standup “check” and the caption “newest millionaire." In fact, a $1 million purse is really a promise to be paid $50,000 a year before taxes. Lottery winners, however, mistakenly believe that they are indeed “millionaires” and are likely to go on spending sprees. Scott Hankins, Mark Hoekstra, and Paige Marta Skiba (“The Ticket to Easy Street? The Financial Consequences of Winning the Lottery,” working paper, 2008) found that large-lottery winners fare no better with their finances than anyone else. The windfall may temporarily reduce their financial hardships; however, it increases their long-run likelihood of bankruptcy, perhaps induced by living beyond their means. Lottery buyers usually have a higher propensity to “gamble” or “speculate” in other areas of their lives, such as making greater investments in risk-laden investments and stocks.

Lotteries are legal -- and popular -- in all states but Alabama, Alaska, Hawai’i, Mississippi, Nevada, Utah, and Wyoming, and in nearly one hundred countries (including several Muslim majority countries). According to the North American Association of State and Provincial Lotteries (NASPL), American lottery sales in 2008 topped $60 billion, an amount larger than the gross domestic product of nearly 120 countries.

Lotteries are universally regarded as a vice, and most religions view them as sinful. Unlike smoking (which the government actively discourages) and drinking (which the government regulates), neither the state nor the federal government take any meaningful action to reduce gambling. This is perhaps due to an inherent conflict of interest. In 2008, states raked in $18 billion in revenue. For instance, the Iowa Lottery Authority announced on 30 Jul. 2009 that since 1985, when it began operations, it has disbursed more than $2.4 billion in prizes and raised nearly $1.2 billion for state programs. Besides the revenue stream, lotteries are legalized in the name of individual rights. At issue is not the constitutionality of legalized gambling, but the questionable ethics of state governments sponsoring, encouraging, and exploiting its citizens’ vices, to raise revenue.

Although governments also raise revenue from other “sin” activities like the consumption of alcohol, pornography or tobacco, lotteries are perhaps the only vice that governments “manufacture” and encourage, states Richard Whitaker (“State Lotteries and Agency Costs Hidden Costs to Nonparticipants,” American Journal of Economics and Sociology 66, no. 3 [2007]: 533-44). Far from discouraging gambling, some states faced with large budget deficits actually seek to make more forms of gambling available, reports Dunstan McNichol (“U.S. States Push More Gambling to Help Replace Declining Taxes Share,” Bloomberg, 20 Jul. 2009). And yet 2007 lottery sales combined amount to a meager 1.1 percent of state budgets, says the Tax Foundation (www.taxfoundation.org). Do states really have to depend upon this revenue source, given the other negative social consequences of gambling?

Conor Dougherty of the “Wall Street Journal” (10 Aug. 2009) remarks that the present economic downturn has caused casino, slot machine, and lottery revenues to fall for the first time in many of the states that have grown to depend upon gambling as a crucial source of income. In 2008, according to the American Gaming Association, an industry trade group, revenue contributed by commercial casinos to state and local governments was only 5.7 billion, down 2.2 percent. In many states, the decline continues. Eight of the twelve states that allow commercial casinos saw their take of gambling revenue fall in the fiscal year ending June 2009 compared with the same period a year ago, according to data from states and the Nelson A. Rockefeller Institute of Government at the State University of New York at Albany. In a sampling of twenty state lotteries, among them California and Illinois, fourteen had year-over-year drops in revenue for the fiscal year ending in June, according to Rockefeller Institute. The National Conference of State Legislatures reports that lawmakers in at least fourteen states have considered expanding gambling as an alternative to raising property or income taxes. Fired up by lobbyists’ contributions and the assumed voting day advantage politicians are eager to enhance gambling operations. For instance, in his 10 Aug. 2009 op-ed in “The Morning Call,” Tom Knox, Pennsylvania Democratic gubernatorial candidate, asserting his state’s needs for jobs, wrote: “Though most solutions will require a long-term strategy, there is one thing that can be done now to create an immediate demand for thousands of new jobs -- the legalization of table games. The simple act of legalizing table games at each licensed casino will create, literally overnight, the demand for thousands of new employees….Estimates presented to the Legislature predict that table games will create 10,100 new direct employment positions statewide.”

Assuming a tax rate of 12 percent, he claimed that legalizing table games would produce $120-$160 million in recurring revenue. In addition, the currently proposed table game licensing fee of $10 million would produce an additional $120 million, which he said was more than half of the state's entire annual budget for all community colleges. He stressed that the “job creation benefit of table gaming is extremely cost-effective when compared to attempts by the state to create jobs,” citing a 2001 program to create 900 jobs that had cost the state $900,000 and, sixteen months later, the company closed and fourteen jobs were actually lost. In 2002, another $12 million state grant awarded with the expectation of 6,000 new jobs resulted in only 2,000 new jobs. By comparison, he declared that “the legalization of table games would provide substantial job creation without the expenditure of a single dollar of taxpayer money.”

Costs and Benefits of Lotteries

The NASPL, which represents fifty-one North American lottery organizations, argues that lottery profits fund education, healthcare, capital construction, and other good causes. With 1-in-2 American adults reportedly sometimes buying a lottery ticket and 1-in-3 being weekly players, lotteries may have replaced baseball as the national pastime (see “The 1989 Gallup Poll: Public Opinion,” SR Books [28 Jun. 1990], 138). Undoubtedly the players perceive some benefit, which may explain their popularity. Like other games of chance, lotteries thrill participants with risk-taking and the anticipation of an unlikely victory. However, the harm outweighs the good (see Qur’an 2:219).

Lotteries prey upon the most vulnerable, for those with smaller amounts of disposable income spend a greater proportion of their earnings on them, say Charles T. Clotfelter, Julie A. Edell, and Marian Moore (“State lotteries at the turn of the century: Report to the national gambling impact study commission,” working paper, Duke University, 1999). Donald I. Price and E. Shawn Novak found that minorities are more likely to purchase lottery tickets (“The tax incidence of three Texas lottery games: Regressivity, race, and education; National Tax Journal 52, 1999, 741-51). During economic downturns, people increase their spending on lotteries and other risky ventures, even when they cannot really afford to do so, says John L. Mikesell (“State lottery sales and economic activity,” National Tax Journal 47, 1994, 165-71).

People living within fifty miles of a casino have a high probability of becoming pathological or problem gamblers; a casino located within ten miles is associated with a 90 percent increase in becoming a problem gambler, states John W. Welte, William F. Wieczorek, Grace M. Barnes, and Joseph H. Hoffman (“The Relationship of Ecological and Geographic Factors to Gambling Behavior and Pathology,” Journal of Gambling Studies 20, 4, winter 2004, 405-23). According to the U.S. General Accounting Office (GAO), compulsive gamblers are also prone to higher rates of divorce. Nearly 1-in-3 respondents had tried to kill themselves. No other addictive population reaches this figure, report R. Keith Schwer, William N. Thompson, and Daryl Nakamuro (“Beyond the Limits of Recreation: Social Costs of Gambling in Southern Nevada,” 2003 working paper). Gamblers also have a hard time kicking the habit: “Of the 80 participants followed for 12 months, 92 percent experienced relapse” (D. Hodgins and N. el-Guebaly, “Retrospective and Prospective Reports of Precipitants to Relapse in Pathological Gambling,” Journal of Consulting & Clinical Psychology 72, no. 1, 2004, 72-80).

Internet gambling has brought the vice right into homes and within easy reach of young impulsive and vulnerable addicts. Alarmingly, electronic gambling is even more addictive -- the “crack cocaine” of the industry, says the National Coalition against Legalized Gambling’s “Facts about Gambling” (NCALG, www.ncalg.org). According to the GAO’s Dec. 2002 report: “Since the mid-1990s, Internet gambling operators have established approximately 1,800 e-gaming websites in locations outside the United States, and global revenues from Internet gaming in 2003 are projected to be $5.0 billion dollars.” Internet gambling is approximately 4.3 percent of the total $116 billion in business-to-consumer global e-commerce. This growth comes despite the fact that law enforcement officers believe that such gambling can be “a significant vehicle for laundering criminal proceeds.” For instance, on 10 Aug. 2009 the FBI indicted Douglas Rennick, 34, for bank fraud and other offenses stemming from his role in processing more than $350 million for Internet gambling companies [during 2007-09] and operating accounts under false names, relates “The American Chronicle.”

Social Implications

Besides the inherent injustice in any form of gambling, lotteries can have social costs. In his 1995 study, Howard J. Shaffer of the Harvard Medical School’s Division on Addictions wrote: “Gambling is an addictive behavior, make no mistake about it ... Gambling has all the properties of a psychoactive substance, and again, the reason is that it changes the neurochemistry of the brain.” NCALG’s Carl Bechtold noted: “Gambling causes excitement, often leading the participant to forget about outside problems and the stresses of everyday life. Electronic gambling devices in particular offer a seemingly non-competitive diversion from reality. Gambling establishments usually serve and often encourage the use of alcoholic beverages, which further loosens players’ inhibitions. The games themselves are made to satisfy the demands of excitement; and the ensuing ‘loss of control’ is part of the ‘enjoyable’ experience of gambling” (“Tide of gambling yields backwash of addiction,” NCALG White Paper).

Even when not addictive, the ubiquitous promotion of lotteries equate success with luck rather than work, thus undermining a fundamental societal norm, say William A. Glaston and David Wasserman, whose study found that lotteries lead to an increase in crime ("Gambling away Our Moral Capital," Public Interest 123 [1996]: 58-71; see also John Mikesell and Maureen A. Pirog-Good, "State Lotteries and Crime: The Regressive Revenue Producer Is Linked with a Crime Rate Higher by 3%," American Journal of Economics and Sociology 49, [1990]: 7-19), while Ranjana Madhusudhan found that state lotteries contribute to increases in the overall number of gambling addicts ("Betting on Casino Revenues: Lessons from State Experiences," National Tax Journal 49 [1996]: 401-12). In the first eighteen hours of operation on opening day at Pittsburgh’s $780 million Rivers Casino, gamblers wagered an incredible 14 million dollars (Pittsburgh Post-Gazette, 10 Aug. 2009).

Lotteries are also a form of regressive tax, providing states with revenue from non-tax sources. Such revenue is less accountable to public scrutiny, and non-lottery players are willing to view it favorably because it shifts the tax burden to gamblers. Empirical studies, however, suggest that “the [lottery-generated] tax benefit is largely diminished by the above normal spending increases,” writes Richard Whitaker (“State Lotteries and Agency Costs: Hidden Costs to Nonparticipants,” American Journal of Economics and Sociology 66, no. 3 [2007]: 542). Moreover, the poor often bear a disproportionate share of this indirect taxation, although it must be noted that lotteries, unlike taxes, are optional. Nonetheless, given that people have known cognitive biases, lotteries can easily become addictive, in part because players fail to properly asses risk and are lured by cheap tickets and mesmerized by large payoffs, relates Alok Kumar (“Who Gambles in the Stock Market?” Journal of Finance 64, no. 4 [2009]: 1889-1933).

Lotteries and other forms of gambling are increasingly popular despite social concerns and religious prohibitions. Such indulgence is profoundly irrational, for the cost of a lottery ticket exceeds its fair value. Lotteries add very little to a state’s overall revenue. But to be fair, there are some exceptions, as in some states (mostly states in the U.S. northeast) lotteries account for 6 to 8 percent of state revenue. This meager benefit is offset, however, by damages to the society’s moral fabric. Lotteries and other forms of gambling encourage a “get-rich-quick” mentality that induces other forms of risky social behavior. Gambling discourages hard work, encourages greed and materialism, and leads to compulsive gamblers who are more prone to divorce and suicide. Muslim Americans should work with other faith groups to draw attention to the problems associated with gambling, particularly compulsive gambling, that have destroyed countless lives and caused untold misery. A March 2003 NCALG survey found that there are about 2 million compulsive and 6 million problem gamblers in America alone.

Las Vegas casino mogul Steve Wynn (formerly Weinberg) told Charlie Rose on CBS’ “60 Minutes” (12 Apr. 2009) that the only way to win in a casino is to own one, "unless you're very lucky," adding that he has never known a gambler who comes to a casino, wins big, and actually walks away. In gambling, there is only one winner, the house (the gambling establishment), and it ain’t yours.