Bo J. Bernhard, Ph.D.Director of Research

International Gaming InstituteUniversity of Nevada, Las Vegas

First, a quick history: First, a quick history: Government and Gambling in Government and Gambling in Las Vegas (Bernhard, 2010)Las Vegas (Bernhard, 2010) In its short history, Las Vegas has banned gambling twice – and legalized it three times.

The most recent (1931) legalization: led by non-gaming business interests interested in economic multiplier effects with expanded gaming/tourist offerings – during a historical chapter when the local economy was desperate.

Since that time, Las Vegas’ gaming regulatory structure has become admired (and mimicked) as a worldwide “brick and mortar” model.

Government, regulation, and Government, regulation, and gambling in Las Vegas gambling in Las Vegas (Bernhard, 2010)(Bernhard, 2010) Early regulatory challenges: the mafia The gambling mafia cleanup:

happened for a number of reasons: 1) Kennedy-era federal reform (RICO statutes), but more importantly, 2) the Corporate Gaming Act of 1969, and then 3) Nevada regulatory approach to background investigations

Today’s regulatory Today’s regulatory challengeschallenges The mafia problem has been solved –

at least if 21st-century gaming regulations are employed effectively. Anti-gambling groups no longer claim

that the mafia will take over if gambling is legalized.

The major regulatory concern today: how do we minimize harm to those who have problems with gambling?

Problem Gambling in the Problem Gambling in the Western World: Western World: A Brief HistoryA Brief History “Let the gambler suffer this

persecution. Lay upon him the biting lash of public odium. Let him be conscious that… there can be no tolerance and no courtesy for a vice so foul as his. Let the gambler know that he is watched, and marked; and that… he is loathed. Let the man who dares to furnish a resort for the gambler know that he is counted a traitor to his duty, a murderer of all that is fair, and precious, and beloved among us. Let the voice of united, incensed remonstrance be heard – heard till the ears of the guilty tingle” (1835:17-18)

Today: a kinder, gentler approach to the problem gambler.

Responsible Gaming (RG): A Responsible Gaming (RG): A Brief HistoryBrief History From ad hoc efforts… … to more rigorous, systemic, research-

based approach. The Reno Model (Blaszczynski,

Ladouceur & Shaffer, 2004): research rather than noble intentions, data-driven approaches rather than intuition or advocacy

The UNLV International Gaming The UNLV International Gaming Institute’s GlobalScan: Around Institute’s GlobalScan: Around

the RG worldthe RG world

But first, before we go around the But first, before we go around the world, a warning: world, a warning:

Globalization is not easyGlobalization is not easyThe cultural challenges of globalization are familiar to the gaming industry. Example: the MGM (Not-) Grand Opening, 1994. Lesson? Pay attention to culture!

AustraliaAustralia Australia: arguably the global gaming

jurisdiction whose scope and profitability are most endangered by problem gambling (PG) issues.

Australia has a long history of dealing with PG controversies – politically and culturally.

Today: two staunchly anti-gambling activists hold key positions of power (Senators Fielding and Xenophon), and have used their positions strategically in order to have the PG issue heard. Local Culture Note: the unintended consequences of

problem gambling policy (Bernhard and Preston, 2008)

The latest: mandatory “pre-commitment” limits for all gamblers?

CanadaCanada State ownership of gaming = political

vulnerability

2001 class action lawsuit on behalf of problem gamblers in Quebec, others have followed

Against this backdrop, a strong response: the world’s most pro-active, progressive, and well-funded approach to problem gambling and responsible gaming. Approximately USD $100 million

annually spent on RG

A Shining Canadian A Shining Canadian Example: Example:

Nova ScotiaNova Scotia The world turns to Nova Scotia: a history of devotion to thoughtful, informed, research-based responsible gaming (RG) policy. Using technology to encourage RG:

The Responsible Gaming Device Informed Player Choice System Balance: card use is mandatory, but all features are voluntary – patrons need never use them if they choose not to.

Features: My account, my time limit, my money limit Less of a burden upon customers than previous attempts, and addresses many of the concerns (e.g., optional vs. mandatory) expressed by operators.

Multiple research evaluations (including one at UNLV): a positive step for responsible gaming and for the industry.

China and MacaoChina and Macao In the world’s most dynamic and rapidly-

growing gaming industry, the responsible gaming (RG) issue has reached near-crisis levels

RG is far behind in this region, and this threatens the industry – an troubling example of expanding first, with RG coming later (or never).

In fact, some of Macao’s current challenges: RG in nature “Corruption” vs. Problem Gambling (“evil” vs.

“sick”) Restrictions on visas stem from concerns

about problem gambling in mainland China, and in neighboring Hong Kong.

IndonesiaIndonesia “Old school” approach to

problem gambling Those who gamble “too

much” are dealt with harshly Punishment is public caning

Meanwhile, Singapore ships wait in international waters -- with ferries to transport Indonesian gamblers to them.

““Internet-land”…Internet-land”… US government debates in December, 2010

Senator Reid: for many years, the technology, regulation, and safeguards were not advanced enough for his satisfaction -- but today, they are. Careful evaluation of international best practices

Possible way forward: legalization plus significant responsible gaming programs

Australia: concludes that their online gambling ban actually causes more harm, and should be lifted. Gary Banks: World Bank economist believes costs

of prohibition outweigh the benefits Possible way forward: legalization plus significant

responsible gaming programs

Norway and SwedenNorway and Sweden Both jurisdictions: very aggressive

approaches to PG/RG Norway: Norsk Tipping (state owned lottery)

sets daily loss limits on all players Limits: USD$85/day, USD$350/month Industry revenues down 90%! USD$27.5B

USD$2.5B “Most stringent gaming machine rules in the

world”

Sweden: Svenska Spel analyzes how players place online bets, uses algorithms to diagnose problems.

SingaporeSingapore The Singaporean government required that

applicants for its two gaming licenses submit highly detailed and rigorous plans for the management of “social safeguards” – without which it was likely that gaming never would have been legalized. These included: A demonstrated track record on social responsibility; a

mandatory $100 entry fee for Singapore residents; exclusion policies that allow individuals, families, and “third parties” (including regulators and police) to ban gamblers, ban on all Singaporeans who have declared bankruptcy or have been on the welfare rolls; prominent problem gambling educational strategies; strict bans on casino advertising; limits on credit; mandatory system allowing Singaporean residents to voluntarily set up loss limits.

Culture note: architecture

South KoreaSouth Korea

Like many jurisdictions, South Korea turned to gaming to help solve desperate economic problems (in the Kangwon Province) Kangwon Land: the most profitable casino in the world? Also, very aggressive RG practices

Treatment center in parking lot! Limit on days/month Employee identification of problem gamblers

Demonstrates that the RG and profitability can peacefully co-exist Culture note: Bo’s mistake!

TaiwanTaiwan Perhaps the next gaming hotspot in Asia September 27, 2009: Penghu residents

voted “no” (60-40%) Culture note: in exit polls, residents of Penghu

expressed fears that gambling would “change their culture” and harm families.

Hence, RG is a vital issue up front – as in Singapore.

This is potentially a “third way” jurisdiction (like the internet, like Singapore, like South Korea, like Nova Scotia) that will likely embrace strong RG policies and legalized gambling.

United StatesUnited States US National Council on Problem

Gambling list of best practices: to take care of problem gamblers in a given jurisdiction, there are five key areas of consideration (you need “Peter”!)

Prevention Education Treatment Enforcement Research

Conclusion: Lessons from history Conclusion: Lessons from history and geographyand geography Greece can benefit from careful study of

successes and failures elsewhere in the gaming universe

Historically: the policy choice = prohibition or legalization?

Today: Prohibition, legalization, or “third way” of “legalization with safeguards”?

Our understanding of PG and RG have advanced dramatically – because of this, legalizing today is not the danger that it once was.

What kinds of safeguards? Use best practices from other jurisdictions – but with attention to local culture. A “glocal” approach is best.

Please stay in touch – I enjoy Please stay in touch – I enjoy e-mail conversations!e-mail conversations!Dr. Bo Bernhard

University of Nevada Las Vegas

bo.bernhard@unlv.edu