Are seniors gambling away their retirement?

By Liz Pulliam Weston

For most of her life, Gail Eastman was prudent about money. She saved regularly from her schoolteacher paychecks and, over 40 years, built up a nest egg of nearly $300,000 to supplement her pension.

Then she won a $10,000 video keno jackpot at an Indian casino near her Phoenix home. A few weeks later, she won $7,000.

Those two wins set off five years of compulsive gambling, as the now-retired teacher spent almost every available hour -- and every dime of her savings -- trying to recapture the excitement.

"I would be talking to someone, but I really wouldn't be there," said Eastman, 64. "I'd be thinking about when I could get back to the casino."

In the end, the only thing that stopped her was realizing that she'd have to risk her home if she wanted more cash to gamble. With her savings gone, her only choices were a home-equity line of credit or using the money earmarked to pay her mortgage.

"I didn't want to lose my home," Eastman said. "I'd seen people do that, and they lived in their cars."

A high-risk group

There's some controversy about whether compulsive gambling is becoming more common among seniors now that gambling options -- from state-sponsored lotteries to online games to full-scale casinos -- are so much more prevalent than they were even 10 years ago.

What's not debatable is how devastating such a compulsion can be. Retirees on fixed incomes have far fewer options to replace the money they lose gambling.

"They can't recoup," said Don Hulen, executive director of the Arizona Council on Compulsive Gambling and himself a former gambler. While some can return to work, few can replace sums accumulated over a lifetime. "Sometimes they call our hotline after they've taken the pills to commit suicide. One guy called who had a gun to his head."

For most seniors, gambling is problem-free

Of course, most seniors can gamble without serious repercussions, and it's certainly a popular pastime among the over-65 set. One recent study, led by University of Pennsylvania addiction researcher David Oslin, found 70% of the seniors questioned had gambled in the last year. Nationally, about 50% of all adults admitted to playing the lottery and about 25% had recently visited a casino.

A study by the state of Florida found that retirees comprise 34% of regular casino visitors, defined as those who made four or more trips a year. Many casinos send buses to senior centers to pick up potential gamblers for the day, and retirees who participate say they enjoy the camaraderie, the safe setting and the occasional thrill of winning.

"The majority by far go there, have some fun and lose a few bucks," Hulen said. "Then they attack the cheap buffet."

But the University of Pennsylvania study found that more than one in 10 seniors were "at risk" gamblers -- defined as those who wagered more than $100 in a single bet or more than they could afford to lose, or both.

The study, published in the American Journal of Geriatric Psychiatry, didn't attempt to define how many of these "at risk" gamblers were actually compulsive about their habit. Previous studies put the pathological gambling rate at 1% to 2% of the general population. That compares to an alcoholism rate of about 4% among all adults, and 0.24% among seniors, according to the National Institute on Alcohol Abuse and Alcoholism.

As with alcoholism and other addictions, compulsive gambling can be stopped with appropriate treatment, including in-patient centers and 12-step self-help groups. Gamblers Anonymous, which operates on principles similar to Alcoholics Anonymous, has meetings in most areas.

An easy problem to hide

Identifying truly pathological gamblers isn't easy, however. They can successfully hide their compulsion for years, which allows them to go through their money without friends or even family catching on. Unlike alcoholics or addicts, there are few physical or behavioral signs of the underlying problem -- no tell-tale breath, track marks or run-ins with the law.

"Nobody knows you're a gambler," said Joe Kessler, 75. "You blend in."

Kessler, a retired New York businessman, said he kept his gambling secret from his wife for years. He tapped their $250,000 in retirement savings on the sly, and avoided using credit cards for cash advances "because she would have found out."

"After we retired, she would volunteer at a hospital," Kessler said. "I would wait until she left early in the morning and then run down to the casino."

Warning signs of compulsive gambling

The fact that Kessler used retirement money to fuel his habit is a classic sign of compulsive gambling, Hulen said. Others include:

• Cashing in life insurance, draining savings or tapping home equity to gamble.

• Preoccupation with gambling and getting money to gamble.

• Loss of control over the time spent gambling, or the amounts spent.

• Repeated, unsuccessful attempts to cut back.

• Lying to others to conceal extent of gambling.

• Inability to meet financial obligations due to gambling.

• Committing crimes for gambling money.

• Feelings of guilt or shame because of gambling.

Even when others know about the problem, intervention can be difficult. Adult children may be reluctant to speak up for fear their concern will look like greed about future inheritances. And the problem gambler is likely to insist that he or she has everything under control.

"It's an addiction," Eastman said. "You're in a fog. . . . I didn't realize what I was doing."

Road to recovery

Many seniors gamble to block out pain or problems, such as declining health, loneliness, boredom or the death of a spouse. Others, like Eastman, say they gamble for the thrill.

"A lot of women are 'escape' gamblers, but I don't believe I was escaping," she said. "It's an adrenaline rush."

Chasing the excitement first led Eastman to drain two savings accounts worth about $30,000 each. Then she started cashing out more than $200,000 invested in annuities.

"I always saved. I was so careful about my money," Eastman said. "It's hard to look back this late in my life and see what I lost."

Eastman placed her last bet more than two years ago and entered an intensive outpatient treatment program to help her quit. She now spends her time going to movies, reading and socializing with friends -- although she still feels the tug when she drives by one of the many casinos near her house.

"I don't think I'll ever find anything quite as exciting as gambling," she said, a little mournfully. "But that's OK. I can get back to being the person I was before."

Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board.