Gambling Regulation – Whose Responsibility Is It?

Rows of Casino Slot Machines

Malgorzata Anna Carran explores who should be responsible for regulating gambling.

When individuals enter an online or a land-based casino or a betting shop, they want to try their luck, perhaps win some money but primarily they want to relax and have some fun. No individuals would want to spend all of their time on a gambling website or in a gambling venue or ruin themselves financially while in there. Gambling providers don’t want that either as, after all, that loses them valuable customers. So, what causes some people to risk their home or their last penny on the red or the final bet that they surely can’t lose and yet, which typically does not convert to the miracle win, and who should bear the brunt of the responsibilities for that? The answer to this question is very complex and as elusive as ever but in the extensive debates that permeates academic discourse, the role of one player is often underestimated.

The supporters of John Stuart Mill’s libertarian approach will point out that the main responsibility should lie with the adult consumers who choose to engage in activities known to present risk to cause gambling disorder. As long as individuals are given or can access the right information to enable them to take an informed choice, they should be allowed to do as they please. The trouble with this argument is the simple fact that those who succumb to a gambling disorder are often no longer capable of making an informed and reasoned decision and their choice somewhat stops being free. But the negative consequences of addiction go well beyond the individuals themselves and extend to their families, social circle and the society as a whole. This shifts the focus onto the gambling industry and the role they play in minimising gambling related harm. Gambling operators vary in sizes and commitment to players’ protection but they all are subject to regulation that requires them to offer gambling in a ‘socially responsible’ manner. This includes the requirements to offer tools to players to monitor their behaviour, to take ‘time outs’ when needed or to self-exclude themselves entirely, and to set time and financial limits. The industry also must advertise responsibly and must prevent those who are underage from being able to engage in prohibited gambling. Compliance with those requirements vary but even assuming strict adherence, they seem to offer only rather limited protection. Monitoring tools are voluntary and at-risk individuals are not typically known for their risk averse attitudes. Gambling operators do not have the right to impose self-exclusion on an unwilling gambler and direct interventions are not as easy as it may seem due to the data protection legislation. The best age-verification methods do little to prevent underage access if adults purchase lottery tickets or betting slips on behalf of their children or allow them to play using their online gambling accounts, and the concept of ‘responsible advertising’ is generally a contradiction in terms. Perhaps surprisingly, there are only few requirements that contribute to the development of gambling games that are inherently safe. It can’t of course be forgotten that first and foremost gambling operators are businesses aiming to make a profit, but this creates a tension between the responsibilities that gambling operators have to their players with their responsibilities to their shareholders.

This brings us to the final party – that of the law and policy makers. Long gone are times when Las Vegas was viewed only as the City of Sins and gambling as an unnecessary evil that needs to be contained and suppressed. More and more jurisdictions opt to liberalise regulatory regimes and to portray gambling as a legitimate adult pastime, consumption of which may be stimulated by commercial advertising. Faith is placed in robust regulation that is positioned as an effective counterbalance to liberalisation. The appeal of this trend is easy to see. The economic benefits that accrue to the treasury from gambling taxations are substantial and the absence of ‘nanny state’ rules towards gambling wins many political votes as well. In the United Kingdom, the liberalisation of the gambling industry occurred with the passage of the Gambling Act 2005 that came into force in September 2007. Gambling has stopped being seen as a vice that was permitted but only to the extent of unstimulated demand but otherwise discouraged and contained. Instead it became a legitimate entertainment that only needs to be regulated in order to ensure that it is offered lawfully, is not associated with crimes and disorder and that children and other vulnerable individuals are protected from gambling related harm but development of which can be driven by market forces. The ‘demand test’ that previously limited the number of gambling opportunities has been removed, commercial advertising has been permitted and the regulator must now ‘permit gambling’ subject only to the licensing objectives. This represented a major transformation of the regulatory approach adopted by the UK policy makers towards gambling but the consequence of such a shift extends well beyond the mere proliferation of gambling opportunities. The ‘normalisation’ effect that is an inherent feature of liberalisation of any industry subtly but invariably alters how gambling is perceived by the society and what influences individuals’ decisions as to what types of entertainments they choose to engage with. This may lead to more varied groups of populations becoming attracted to gambling that it has traditionally been the case, may undermine existing restraints or prevent development of new ones that typically limited gambling engagement, may desensitise individuals to the influence of gambling advertising, and it may increase the intensity of gambling engagement amongst existing plyers. Over time, this may lead to more people, including the current generation of youth, finding themselves vulnerable to the risk of gambling related harm or may cause those who already developed a gambling disorder to experience their issues more intensively and be less able to overcome their problems.

I am not convinced that regulation alone is capable of counterbalancing those effects of liberalisation. After all, while it is true that everyone has a free choice of whether to engage in gambling or not, this choice is materially affected by the social environment of which culture, religion and legal framework constitute an inherent part. Regulation remains important but social norms and behaviours have a tendency to follow their own paths. It seems to be quite naïve to think that liberalised gambling industry would be prevented by regulation from pushing boundaries in what is or is not permitted in their drive to create a more attractive (and more profitable) and more engaging (and more potentially addictive) games. Because of that, I think, it is important not to underestimate the law’s influence and accordingly, the responsibility for prevention of gambling related harm needs to be equitably allocated to all players and not only to the individuals and the gambling industry.

Malgorzata Anna Carran, City Law School, City, University of London, UK

Gambling Regulation and Vulnerability is available now. Carran Gambling

Read chapter 1 free on elgaronline.

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