Gambling control regimes

This chapter explores gambling regulation regimes, looking at the different control structures used, and their effectiveness in serving the public interest. Gambling has always been regulated by public policy, and in whichever way the industry is developing, government regulation is always involved. Regimes of gambling regulation involve both public and private actors and institutions. Public monopolies may be stronger in the area of consumer protection than restrictive licensing, associations-based operations or competitive markets. In considering the choice of regulation regime, policymakers would be well advised not to weigh the pros and cons or the costs and benefits of legal gambling in itself but to consider whether it is the best way to achieve the public interest goals compared to the alternatives.

The total volume of gambling and the prevalence of gambling problems

The total consumption model (TCM) implies that only a small fraction of gamblers account for a very large fraction of all gambling activities and of all gambling expenditures. This does not necessarily mean that every gambler with high gambling expenses has problems, but the probability increases with increasing intensity. Ironically, heavy gamblers are influenced by the activities of those who participate only moderately: the more people take up gambling, the more likely vulnerable individuals will be recruited as well. The importance of total volume of gambling in society is reinforced by the fact that the accumulated harm caused by low-risk gamblers in fact exceeds the harm caused by excessive gambling. Although adaptation theory suggests that harmful consequences recede once the novelty of innovation subsides, every increase in consumption increases the risk of harm.

The history of gambling regulation and the rise of the industry

From its ancient origins in small-scale gaming sites in local communities, gambling in the 21st century has become a global industry and an increasingly standardized pastime across the world. The growth started in the early the 20th century, and accelerated in the past few decades. The history of gambling is a history of regulation. Gambling has always been controlled by political powers and still is in both democratic and non-democratic countries. Islamic and communist regimes have been most negative for moral reasons. Countries dominated by Protestant Christian faith have been critical, because of the value they have placed on work and honesty, even when they have not seen prosperity as a sin. Since the 1980s gambling has been de-regulated in many countries, with the justification that gambling is legitimate economic activity and problem gambling should be the policy target.

Industry strategies and their regulation: marketing, game features, and venue characteristics

This chapter focuses on three industry strategies that can be regulated and used as policy levers: marketing, game features, and venue characteristics. Research on potential policy levers typically measures problem gambling or its intensity as the target variable, often in terms of population effects or risk factors related to game features or venue characteristics. Policy measures in the public interest have the potential to prevent gambling-related problems significantly, but their targets should be considered in view of the context. In some circumstances it is important to prevent abusive marketing practices. In other instances, addictive game features need to be regulated. A large part of those being initiated to gambling do not understand the risks and the real chances of winning. Transparency and honesty, however difficult to affirm, should in all cases have priority over monetary interests, public or private.

The effects of changing availability

Game operators systematically attempt to attract customers and make them spend more money. The availability of gambling in terms of the ease of customers’ access to games influences both the amount of gambling and the problems arising from it. Regulations on game features, controlling access to funds and other inducements, risk awareness tools, exclusion policies, staff training, limit-setting, and marketing restrictions have been proposed as methods to counteract the effect of ready availability. In policy terms, efforts to regulate availability are usually combined with rules on game features and situational elements: when new opportunities to participate are created, game designs and situational characteristics also change, and in some cases policy changes aimed at reducing gambling activity are implemented to lower the risks for those who play.

The range and burden of gambling problems

This chapter discusses the diverse problems—for individuals, families, communities, and society—which are associated with gambling. A public interest approach must assess the global expansion of gambling in the light of the whole range of its problematic consequences.The burden of gambling problems is not limited to the behavior itself; its consequences range from psychological suffering to economic and social damage, extending far beyond the gambling individuals and their immediate sphere of life. Gambling behavior itself does not need to be problematic to cause harm. Research has connected gambling to criminality, as well as other societal impacts ranging from social inequality to environmental questions. Gambling as a governmental solution to revenue needs faces the risk of turning poverty into misery, even for many who do not themselves gamble at all.

Gambling behavior and problem gambling

General population surveys show that gambling is prevalent in many high-income countries. Gambling is not an exclusive activity that only a few people engage in; it has become a popular recreational pursuit, especially in countries where it is legal, accessible, and commercialized. The epidemiological and clinical research reviewed in this chapter indicates that gambling problems tend to be concentrated, though not exclusively, in the most vulnerable and disadvantaged groups, including ethnic minorities, the homeless, the unemployed, the mentally ill, alcohol and drug users, and those who have lower incomes and socio-economic status. Gambling transfers wealth from the most frequent gamblers to owners of the operating companies, to the government authorities, and to the beneficiaries of direct contributions to “good causes”.

The gambling industry: global structures and modern trends

This chapter describes the growth of the global gambling industry in terms of its volume, structure, and the distribution of different types of games in different parts of the world over the past 50 years, especially in the first two decades of the twenty-first century. Globalization of the market through the internet threatens the ability of governments to tax or otherwise harvest revenue from gambling. However, liberalizing regulations on gambling started in many countries before the internet became a relevant medium. Fiscal motives and ideological reasons probably explain the liberalizing trend because it started at the same time that deregulation of financial markets affected the supply of credit and boosted digital transactions. Growth in gambling markets has been greatest in North America, Asia , and Europe. Countries with high overall gambling expenditures tend to spend proportionately larger amounts in casinos and on gambling machines outside casinos.

Summary and conclusions: gambling policy and the public interest

This chapter summarizes the evidence from previous chapters, leading to three basic conclusions. First, gambling has both malign and benign redistributing effects. The benign effects are those that help fund necessary social activities; the malign effects are those that make the poor even poorer and the unhappy even unhappier. Second, gambling is concentrated in a very small group of heavy users, most of whom can ill afford to fund the benign effects. Third, gambling problems reinforce other vulnerabilities. These three conclusions make gambling policy an issue of distributive justice. Evidence shows that prevention of gambling problems, treatment, and harm reduction measures can be successful, if consideration is given to the complexity of the problems themselves. Government revenue and funding toward good causes from gambling create dependencies that may influence policymaking. Gambling regulation should be separated from both of those interests.

Treatment and early intervention services

This chapter looks at the treatment, intervention, and support services for problem gamblers and their families. Research indicates that such gambling disorder is treatable.The role played by the mutual-help organization, Gamblers Anonymous, the importance of help for family members affected by their relatives’ excessive gambling, and the existence of medications that have been used in the treatment of gambling disorder, need to be investigated more systematically. Help for gambling problems may be sparse or non-existent, and even in better resourced countries, treatment availability is patchy and engagement in treatment is low, probably in part due to the secrecy and stigma associated with gambling problems. Gambling treatment services, if properly organized and funded, could make a contribution to reducing gambling-related mental disorder, crime, and the consequent damage to family life.