The regional casinos debate

The regional casinos debate: Regeneration and responsible gambling in the UK

Proceedings from the Social Market Foundation Conference, July 2006

This conference considered a series of papers introduced by their authors. Their preoccupation is the advent of "regional" rather than "large" casinos in the UK. However, there are some interesting perspectives that apply to both scenarios and if you want to read a number of short papers which capture the essence of the debate, then this is a good selection.

You can read the full report. A summary of the main points of the papers has also been provided below:

1. Regional casinos as a source of economic regeneration

Author: Brad Smith, former chairman and chief executive, New Jersey Casino Control Commission, 2006

This paper tells the story of how casino licensing and regulation by the New Jersey State authorities enabled Atlantic City to rise like a Phoenix from the ashes of economic decline. There are some interesting parallels with somewhere like Blackpool rather than Newham and the scale sounds "Las Vegas" like. However, the structure of licensing and local taxation that is outlined is of interest. Through this, New Jersey has been able to fund a huge volume of social welfare programmes and build new sports facilities.

It also talks of the indirect employment effects. For every job created in the casino it says that 1.09 jobs are created in ancillary services.

2. What is regeneration?

Author: Jon Ladd, chief executive, BURA, 2006

This paper offers the following definition of regeneration:

"Urban Regeneration is a comprehensive and integrated vision which leads to the resolution of urban and rural problems and which are seen to bring a lasting improvement in the economic, social and environmental conditions of an area."

The paper also features some limited discussion of casinos as tourist attractions.

3. Economic rents and good causes

Author: Professor Peter Collins, Centre for the Study of Gambling, Salford University, 2006

This is an intelligent account of what a responsible gambling policy might look like set in the context of accessible economic theory. The paper's main points are as follows:

  • Banning gambling where it would create jobs for unemployed people would be just as irresponsible as allowing gambling to exist in areas where problem gambling would be the result
  • Many jobs are potentially in ancillary services to gambling, e.g. hotels, bars, leisure etc. - fruit machines are the least labour intensive element
  • Introduces the notion of "economic rents," i.e. compulsory taxation. This is made possible by limiting the number of operators and allowing them to make "abnormal profits" - a proportion of which can be taken for good causes
  • Good examples of success include Biloxi, Melbourne, Cape Town and Singapore, while notable failures include New Orleans and the Australian machine industry outside casinos

4. Perspectives, research and experience from other jurisdictions

Author: Professor Alex Blaszynski, University of Sydney, Australia, 2006

A relatively straightforward proposal for a national framework for the promotion of responsible gambling, featuring:

  1. A gambling prevention programme, embedded in the national curriculum, to illustrate the statistical probabilities of winning, to be taught alongside other personal development issues such as drugs and sex education
  2. An environment that is responsible
  3. Clear linkages with support services - because a small degree of problem gambling is inevitable.

Professor Blaszynski also advocates a strong framework of regulation for operators.

5. Can gambling be healthy?

Author: Professor Corinne May-Chahal, Lancaster University, 2006

This paper introduces some public health perspectives, from the viewpoint that gambling is normal - most of us do it. It advocates the casino as a controlled zone where we can take risks and find excitement or relaxation.

The paper takes the view that the largest body of research has been on problem gambling, which skews perceptions, as the overwhelming majority of gambling is non-problematic. Also a lot of research focuses on adolescent problem gambling, which Professor May-Chahal argues is ill-defined. She quotes some surveys of adolescents asked about their preferred "deviant" behaviour in adolescence. Sex, drugs and alcohol are much more popular with our adolescents than gambling

6. Responsible gambling policies - enlightened self interest

Author: Vicki Flannery, former CEO, Australian Gaming Council, 2006

This paper postulates that the "unregulated growth" of internet gambling requires governments to bring forward gambling reform, or the financial and social benefits that could be generated in the UK will haemorrhage to who knows where and social benefits will probably be lost.

Ms Flannery outlines some unintended consequence of various attempts at responsible gambling polices. One example was an attempt in Canada to limit exposure to gaming machines. The authorities introduced an automated system which limited the time an individual could play on a machine. After two hours and 25 minutes the machine forewarned the individual that it will close down in 5 minutes. At two hours and 30 minutes the machine shut down. Studies have shown that the effect was to initiate a five-minute gambling frenzy where stakes were ramped up and greater risks taken. It did not have the desired effect.

She outlines the following barriers to a responsibility policy:

  1. Lack of clarity of definition of gambling-related harm
  2. Lack of consensus about what problem gambling looks like

She refers to "the Reno Model" as a toolkit for the development of responsible polices and outlines the following three models:

  1. Strict regulatory control of consumer behaviour
  2. Laissez-faire approach - advocates self-regulation, e.g. similar to the UK approach to alcohol
  3. She favours a middle ground - a consumer protection and social safeguard model


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