Transcript Document

Policy making, social responsibility
and the gambling industry
Professor Jan McMillen
Director
Australian Institute for Gambling Research
University of Western Sydney
Background themes
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Canada & Australia: common principles
– Federal systems, state/provincial authority over
gambling, varied approaches
– Historical nexus between gambling legalisation &
charitable/welfare funding
– Strong emphasis on regulation, social issues
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Differences
– Australian gambling legalised since 19th century
– Primarily government-run, prohibition on private
ownership until 1970-80s
– Privatisation, commercialisation introduced market
imperatives, problem gambling (machines,
casinos)
– 2000-1 per capital loss $942, almost 4% HDI
– 80-85% gamble regularly, 2.1% have problems
Regulatory rationale
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The traditional role of government to regulate
– Commercial gambling as a privilege, not a right
– Control over market entry, probity of operators
– Crime prevention, consumer protection
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To generate revenue
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replacing illegal activities that incur policing costs
revenue for welfare, public infrastructure
increasing leisure and recreation facilities
job creation (= ‘illusory” – PC 1999)
To mediate social costs
– perception that gambling is a questionable activity
– problem gambling, social harm
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Emerging challenges to national sovereignty
– Global telecommunications technology as the
Factors that influence gambling
policy
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The economic power of industry
– Revenue imperative, ‘invisible’ form of taxation
– Inter-regional rivalry
• leakage of gambling expenditure
• investment opportunities
– Special treatment for some industries
– Growth is supply driven (not consumer demand)
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Policy learning
– learning from other jurisdictions
– from past policy failures
– from research, community backlash
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Relevant policy instruments, mechanisms
– choice of policy options/design, convenient policy
process
The Gambling Regulatory Cycle
1. Regulatory liberalisation
3. Community concern,
industry pressure, information
can lead to regulatory reform
2. Proliferation of gambling
& impacts
What works: lessons from Oz
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Casinos:
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Control over market entry, regional monopolies
Licensing & regulation of gaming staff
On-site 24 hr government inspectorate
Parallel surveillance systems, override on CCTV
Police squads, undercover, ban on criminals
Auditing of cash transactions
Gaming machines (clubs, hotels):
– Venue licences, restricted to certain venue types
– Licensing of key staff
– Centralised monitoring systems, auditing
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What doesn’t:
– Proliferation of gaming machines
– Wagering & sportsbetting:
• inferior regulatory standards, fragmented, inconsistent
Lessons from Australia (cont’d)
 Crime prevention
– Deterrence, detection, sanctions
– Proactive policing at minimal public cost
• Internal casino/venue crime
– hidden ownership
– theft, counterfeiting
– cheating (card counting)
• Community crime
– Crime displacement
– Problem gambling related crimes = inadequate data
• Money laundering
– Star City scandal, regulatory reforms
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Prosecution, enforcement
– Patrons, staff
• Criminal prosecution, licence withdrawal
Crime prevention (cont’d)
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Licence withdrawal rarely used against venues
– but publication of breaches, sanctions
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Problem gambling crimes
– tendency of the courts is to impose jail sentence
– problem gambling is accepted in rare cases as
‘mitigating circumstances’, leniency in sentencing
– mandatory counselling not successful
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Liability for problem gambling
– Tendency has been to find individual liability eg
• the Katoomba-Reynolds, Lane Cove cases
• the O’Malley’s case
• the Star City case
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Self-regulation, commercial approach is deficient
– evidence of social costs/problems from PC’s
national inquiry, state research
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Problem gambling – regulatory reforms
– Gaming machines = major source of problems
• 10-14% of regular machine gamblers have problems
• 2.1% gamblers generate 33% of total gambling revenue
• NSW: 104,000 machines in clubs & hotels
– 2.55% = highest national prevalence of problem gambling
• Western Australia: no machines outside Perth casino
– 0.70% = lowest national prevalence of problem gambling
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Restrictions on consumer access
Away from shopping centres
‘Cap’ number of machines (venue, region, state)
CIS requirements – demonstrate community benefit
Consumer information, signage, brochures
Controls over advertising and promotion
• No external advertising, not to focus on ‘winning’, etc
– Controlling the gaming environment
• Lighting, ATMs, gaming not to dominate venue, multiple
facilities
Internet gambling - regulatory issues
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Legislative and regulatory inconsistencies
between states/territories
– inadequacies of regulation, loopholes
– detection, control of illegal activities
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Integrity of the games & consumer protection
– who sets the standards? are they enforceable?
 Social impacts (eg underage gambling, problem
gambling)
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Is prohibition a viable option?
– Commonwealth response: prohibition of gaming,
proliferation of wagering/sportsbetting
– who will enforce a ban?
– limitations of national sovereignty, state laws
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Disputes with USA & other nations are likely
over sportsbetting/wagering
Developments in the UK
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Principle of ‘non-stimulation’, restricted
markets until 1990s
– Privately owned National Lottery introduced
commercial industry practices, uneven playing
field
– Internet bookmakers moved offshore to tax
havens
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Gaming Review 2001 (Budd Report)
– proposes major liberalisation of gambling
• introduction of gaming machines
– in theory, growth is to be balanced by responsible
gambling policies
– Regulatory regimes not defined
– Currently subject to industry lobbying
The way forward
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Avoid policy lag
- policy learning - be proactive, not reactive
- avoid trend to devolve initiative to industry
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A coordinated policy using all regulatory
resources
– review of legislation, range of regulatory options
Needs a ‘whole of industry’ approach,
consistency (not ad hoc, incrementalism)
 Collaboration, policy input by community
groups , local authorities
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– consultation re licensing criteria
– more specific regulations, application of appropriate
sanctions
– clarify offences & liability
Blueprint for gambling regulation
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Separate structure of institutions involved
 Allocation of roles and functions: who should
do it? How should it be done?
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policy development by parliament
control of all gambling by independent regulator
enforcement separate from policy & control
adjudication shared by control authority & courts
fund administration by independent trust, board
Defined,accountable processes for
implementation and enforcement
 Avoid conflicting principles & objectives
 Open, consultative & informed processes
 The guiding principle = the broader public
interest