When Dominic C. decided it was time to stop gambling in 2012, the 50-year-old withdrew $56,500 from his IRA account at Santander Bank to pay back a gambling debt. “That wasn't the first time I used my retirement funds to help pay off casino debt,” he said.

Today, at 56 years old, the accountant completely abstains from any gambling at all and is paying back, under court order, a $187,500 casino debt, plus interest, but without dipping into his IRA, which is currently stable at $175,000.

"I learned the value of time and money the hard way,” Dominic told Financial Advisor. "Joining a support group of gamblers has saved my retirement.”

Older gamblers don’t have the same amount of time on their side.

“You have a chance to recoup your financial life when you’re younger, but if you blow your retirement savings gambling at 60 or 70 years old, it can be harder to find work,” said Arnie Wexler, a certified compulsive gambling counselor. “I know seniors who are working two to three jobs to pay off gambling debts. Others are homeless because they can’t find work. One elderly lady is living in her car.”

One-third of the U.S. population visit a commercial casino, with more than half of those people aged 50 and older, according to the American Gaming Association (AGA)’s State of the States annual report.

“Casinos are becoming day-care centers for some because that’s where seniors addicted to gambling like to be unless they seek help,” said Wexler.

While several of Erika Safran’s clients enjoy playing the lottery or traveling to Atlantic City to play blackjack, the New York-based financial advisor isn’t worried as long as they can account for the amount of money they’re spending.

“My clients report to me how much they spend to win because they can secure a tax deduction for their gambling losses,” said Safran. “When we gather the information they need for their accountants, we read these statements as part of our annual review of their taxes. That's how I determine how much they are gambling or spending.”

To help problem gamblers, Wexler launched a telephone hotline, 1-888-LAST-BET, in 1990. Some 25 percent of those who dial in are gamblers over 65 years old.

“Gambling is entertainment as long as the client has the ability to cut their losses and walk away,” said Safran, founder of the Safran Wealth Advisors.

In the extreme, problem gamblers have been known to engage in criminal activity, max out their credit cards or the credit cards of loved ones.

"I counseled a newlywed retired couple in their 70s where the bride discovered her groom was an addictive gambler," said Wexler. "The wife had to decide whether she would send her husband to jail for maxing out $80,000 in credit card debt in her name without her knowledge or attend 12-step classes to cope with being a friend or family member of a gambler."

None of Safran’s clients who enjoy casinos and other gaming venues are problem gamblers, but if they were, she’d set aside a speculative account specifically for gambling trips and to invest in risky stocks from assets that are left over after priority accounts have been funded. In this speculative, discretionary account, they could spend as much as they want while long-term savings for the next 10 to 20 years of retirement and college accounts for children and grandchildren would be classified as untouchable, priority accounts that are off limits.

“Signs of problem gambling include complimentary rooms at casino hotels, secretly withdrawing money from retirement accounts, using up liquid assets in a speculative account, then dipping into priority accounts or gambling in order to make up losses from previous trips to the casino or racetrack on an ongoing basis, which creates a downward spiral,” she said.

For financial advisors who find their retired clients are detrimentally hooked on card games, state lotteries, casinos and racetracks for the quick fast action, Wexler suggests a simple solution:

“All accounts should require two signatures in order to withdraw money,” said Wexler. “It can be an adult child, spouse or cousin, but requiring a second signature from a family member who is not a compulsive gambler can stop a senior from over gambling.”

Addictive gambling is not a gender-based issue. Problem gambling among older women near or in retirement is increasing in scope and severity, according to the National Council on Problem Gambling.

“Many retired women start to gamble after their spouses die,” Wexler said.

Part of the problem is the proliferation of gaming outlets.

“Before 1978, you had to book a flight to get to Las Vegas if you didn’t live in Nevada, but now you can drive to a casino near you in your own state or you can catch a bus organized by your local senior citizen community center,” said Wexler. “Most racetracks today now also offer slot machines.”

The AGA, which represents casinos, found that casino gambling has become one of the country’s fastest-growing industries, with commercial casinos in the 23 states that license them earning more than $37 billion in gross gaming revenue.

“I don’t think it’s our role as financial advisors to judge how our clients spend their money provided that overspending doesn’t interfere with their financial well-being,” Safran said.

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