Dallas When financial planner Doyle Brown works with clients, he wants them to be informed as much as possible about their assets and to be involved in planning to build wealth.
He can't take that approach with one client. For her, it's best not to show her the money.
That's because she's literally rolling the dice with her financial future.
"When her husband passed away, she went through $175,000 in inheritances in about a year and a half, most of it through gambling," said Brown, a certified financial planner at Comprehensive Planners of Nevada Inc. in Reno.
Twenty-five years ago, legalized gambling was rare confined to Nevada and Atlantic City, N.J., a few race tracks and two or three state lotteries.
Today, some form of gambling is legal in 47 states, according to the National Council on Problem Gambling. And it's becoming more widespread.
"As legalized gambling becomes increasingly common in our society, problem gambling and its attendant financial nightmares also will become more common," according to "Helping the Problem Gambling Client," a booklet published by the National Endowment for Financial Education and the National Council on Problem Gambling.
The booklet is one of three for financial planners and families of problem gamblers. It focuses on the financial issues surrounding problem gambling and is made available to gamblers support organizations and professionals who treat problem gamblers.
The game is spreading
While there's no surge of financial planning clients with gambling problems, it is something that planners need to be aware of, said Brent Neiser, director of collaborative programs for the Englewood, Colo.-based endowment, which provides personal-finance education to consumers.
"It's a simmering problem," he said. "There's nothing that says people have to get to it now, but it's a fact that many people have this problem."
What exacerbates the problem is how easy it is to gamble these days, experts said.
For the first time, Virtgame.com Inc. in San Diego, an online gambling system, has received the go-ahead from the Nevada Gaming Control Board to distribute sports wagers on the Web.
Nevada residents will be able to legally place bets 24 hours a day on football games, horse races and other sports on Web sites operated by Coast Resorts Inc.
And on Nov. 7, Arkansas residents will vote on a proposal to legalize casino gambling.
"Because gambling is starting to spread out with Indian gaming, the state with their lotteries, the riverboat gambling the pervasiveness of it the availability of Internet gambling, I think the number of people who can succumb to the gambling fever will increase," Brown said.
Heading off disaster
Financial planners can play a crucial role in heading off financial disaster, experts said.
"The main substance that problem gamblers use is money, and if anybody is going to pick that up, a financial planner may be in a position to do so," said Keith Whyte, executive director of the National Council on Problem Gambling in Washington, D.C.
But they have to know what red flags to watch out for.
Brown said he started wondering about his client after she began giving odd reasons for wanting to withdraw money from her investment accounts.
Chris Cooper, a certified financial planner at Chris Cooper & Co. in Toledo, Ohio, had a client who ran up $40,000 in credit-card bills buying lottery tickets. His family income was only about $25,000 a year.
He didn't want his wife to know about his problem, so he tried to withdraw his pension benefits to repay the debt.
But that's when Cooper put his foot down and had him declare bankruptcy.
That's not the best solution for a problem gambler, said Sue Cox, executive director of the Richardson-based Texas Council on Problem and Compulsive Gambling.
"It is often recommended that they do not declare bankruptcy because that is considered just another bailout, and after the bankruptcy, the gambler often returns to gambling," she said.
Instead, she said, gamblers should be forced to repay their debts.
The differing opinions over having a problem gambler declare bankruptcy highlight a key point for financial planners: Dealing with a client who's a problem gambler may call for strategies that are counter to traditional planning principles.
"Everything that a financial planner has to do with a gambler in order to make the plan work is contrary to everything we do with other types of financial planning," said Sandra Stone, a certified financial planner in Boca Raton, Fla., who has clients with gambling disorders.
For example, financial planning works best when clients are involved in decision-making and are fully aware of where their assets sit.
"With a gambler, the decision-making and the day-to-day knowledge of their assets and investments should be separated from them," Stone said. "The gambler has to delegate the money management to somebody else."
While planners may see their clients as fiscally self-disciplined because they're seeking out their services, the gambling demon could strike later in life, Cooper said.
"You might have someone who is young and who has never been a gambler and becomes one when they're 65," he said.