Casino Industry in Asia Pacific

Development, Operation, and Impact

Kaye Sung Chon, Cathy Hc Hsu, Cathy H. C. Hsu

• Publisher: Routledge
• Year: 2012
• eBook ISBN: 9781136420511
• Topic: Business
• Subtopic: Hospitality, Travel & Tourism Industry
• Index: Business

This single volume gives you comprehensive information on Asia-Pacific gaming!

Casino Industry in Asia Pacific: Development, Operation, and Impact is a one-of-a-kind comprehensive review of the gaming industry in various countries in the Asia-Pacific region. This valuable resource thoroughly details the history, the operational issues, and the impact of casino gaming in Australia, Korea, Macao, and Southeast Asiaand the Pachinko phenomenon in Japan. International authorities discuss crucial issues that involve policy makers and casino developers, allowing industry players a global perspective as they consider various important viewpoints in their long-range planning.

Casino Industry in Asia Pacific is organized into three sections: Development, Operation, and Impact. Chapters in the Development section provide a thorough history of gaming for Australia, Japan, Korea, Macao, and Southeast Asia. Laws and regulations are also reviewed for each location. In the Operation section, each chapter analyzes an important casino operational issue, including regulations, licensing and due diligence, internal control and auditing, and rolling commissions. The last section reviews the economic and social impacts for various regions. Chinese culture and gaming are also examined in detail to illustrate the intertwined relationship between gaming and people's daily life. Extensive bibliographies, helpful tables, and fascinating photographs are also included.

Casino Industry in Asia Pacific discusses:

• casino history and gaming legislation in Australia, Korea, and Macao
  
• Japan's form of gamblingPachinko
  
• gaming in Southeast Asia
  
• suggestions for Asian gaming jurisdictions
  
• casino licensing investigations
  
• accounting, internal controls, and casino auditing
  
• the use of non-negotiable chips
  
• the societal and economic impacts of gaming in Australia
  
• the impacts of casinos in Korea
  
• gaming and Chinese culture
  
  

Casino Industry in Asia Pacific: Development, Operation, and Impact is an essential resource for graduate students, advanced undergraduate students, educators, researchers, gaming policymakers and lobbyists, concerned civic organization leaders and members, casino developers and executives, hotel professionals, travel and tourism professionals, and anyone interested in the gaming industry.

SECTION I:

HISTORY, DEVELOPMENT, AND LEGISLATION

Chapter 1

Casino History, Development, and Legislation in Australia

Helen Breen
Nerilee Hing

Casino history, development, and legislation in Australia can be best understood within the wider context of the development of gambling in Australia. Casinos are a relatively recent addition to the Australian gambling sector, with the first legal casino, Wrest Point, being established in the state of Tasmania in 1973. There are thirteen casinos in Australia, at least one in every state and territory, and each state and territory maintains its own legislation and policies regarding casinos. However, Australian casino history and development needs to be seen against a background of evolving social and economic conditions that affected government policies from the earliest days of European settlement in Australia. Four major historical periods have been identified by the Australian Institute for Gambling Research (1999) in the transformation and redefining of Australian government policy on gambling:

1. The period of early colonization from 1778 to 1900, characterized by selective prohibition of gambling

2. A period of selective legalization from 1900 to the 1940s

3. A period of government endorsement and market growth from World War II (1939-1945) to the 1970s

4. A period of commercialization, competition, and market expansion from the 1970s to the present (Australian Institute for Gambling Research, 1999, p. i)

Using these four major periods, this chapter explains how changing historical, social, and economic conditions created a legislative environment that allowed for the establishment and continuing development of casinos in Australia. However, a few definitions here will help clarify some of the terms used in this chapter. Gambling is defined as the “(lawful) placement of a wager or bet on the outcome of a future uncertain event” (Tasmanian Gaming Commission, 2002, p. 5). In Australia this includes gaming, racing, wagering, and sports betting. Gaming is “all legal forms of gambling other than racing and sports betting” (Tasmanian Gaming Commission, 2002, p. 5). This includes casino gaming, poker and gaming machines, lotteries, football pools, interactive gaming, and minor gaming. Racing, wagering, and sports betting are forms of legal betting on horses, greyhounds, and specified sports events though totalisators and bookmakers (Tasmanian Gaming Commission, 2002, p. 5).

EARLY COLONIZATION: 1778-1900

Government policy on gambling during the early period reflected class-based distinctions. Early Australian colonists brought British gambling practices with them to Australia (O’Hara, 1988). Although a prohibitionist approach to gambling prevailed for the lower classes, gambling among members in private clubs and betting on horse racing were tolerated for their contribution to recreational and social purposes. The wealthy classes saw card playing, billiards, and betting as matters of reputation, civilization, and honor rather than gambling “for mere money” (O’Hara, 1988, p. 246).

In this context, early clubs established themselves as not-for-profit organizations with social objectives. The Australian Club was established in 1838 in Sydney to provide accommodation and leisure facilities for its country and city members. It was a prestigious club with high fees and members were leading political, military, administrative, legal, and church figures (Williams, 1938). In contrast, the poorer classes saw gambling as one of the limited recreational pastimes available to them (O’Hara, 1988). At the far end of the social scale were convicts. Some convicts were transported to Australia for gambling crimes, and many used food and clothing as their gambling stakes (Cumes, 1979). Popular gambling among the lower classes included dog, cock, and rat fights, cards, dice, two-up, and coin games.

Horses were important for transport and communication in the colony. The popularity of horses gave horse racing a certain degree of respectability (O’Hara, 1988). In the state of New South Wales (NSW), organized horse racing was established by 1810; by the mid-1800s, racecourses, club facilities, and numerous sweepstakes based on horse racing were well established (McMillen, 1996). The first Melbourne Cup, Australia’s premier horse race, was run in 1861.

The growth of gambling was not without opposition. The growing urban middle classes and rising evangelical Protestantism (Inglis, 1985; O’Hara, 1988) opposed the growth of gambling. The values of emphasizing the industrial work ethic and distrusting idleness saw gambling, especially by the working classes, as “a vice which distracted people away from the virtues of industry” (O’Hara, 1988, p. 104). Although the moral reform movement was successful in influencing antigambling legislation (Inglis, 1985), it had less success in reducing participation in gambling, both legal and illegal. All colonies passed laws between 1876 and 1897 to prohibit gambling in streets, shops, and private houses, but prosecutions were few and far between (O’Hara, 1988). Government objectives were aimed at trying to prevent gambling among the lower classes while turning a blind eye to gambling by the upper classes. As such, they reflected class privilege and the conservative moral principles of the time (Australian Institute for Gambling Research, 1999).

SELECTIVE LEGALIZATION: 1900-1940s

During the first half of the 1900s, government policy on gambling shifted from a class-based prohibitionist approach to selective liberalization that clearly linked gambling to social benefit. The Gaming and Betting Act 1906 NSW and similar legislation in other Australian states placed restrictions on lower-class entertainment (e.g., closing betting shops, restricting betting to racecourses, and licensing racecourses) (O’Hara, 1988). Despite this, horse racing and trotting continued to grow with betting made more efficient with the mechanical tote after 1911 (Watts, 1985). Elite gentlemen’s clubs still operated. Illegal betting shops and private bookmakers continued, although more cautiously (O’Hara, 1988).

The introduction of the state-run Golden Casket lottery in Queensland demonstrated that the state could be an effective gambling operator, with revenue used in a morally defensible way to relieve pressure on state funds and provide social benefits (O’Hara, 1988). It was so successful that in 1920 the Queensland government took over its operation from local charities and directed all profits to the Motherhood, Child Welfare and Hospital Fund (Selby, 1996). State lotteries were later introduced in all states and territories.

By the 1940s, bingo also had gained popularity. Clubs, hospitals, ambulance organizations, and the Catholic church operated bingo for charitable causes. Regulations on hours of play, number of games, and prize money were introduced to contain its growth (O’Hara, 1988). The first half of the 1900s saw state, church, and charitable involvement as gambling operators strengthened the legitimacy of gambling. Gambling gained new respectability through association with welfare purposes, attracting middle-class participation, particularly by women (McMillen, 1996a). Lotteries and bingo increased public access to gambling (Selby, 1996).

It was within this context of increased legitimation and public exposure to gambling that NSW clubs became established as major leisure institutions and gained the first foothold on machine gaming in Australia. Poor facilities in hotels and improved economic standards fueled public demand for better leisure facilities. The nonprofit status, membership requirements, and social aims of clubs were instrumental in gaining preferential treatment compared to hotels by officials and legislators. Police and public officials allowed NSW clubs to serve liquor outside hotel trading hours and operate illegal poker machines (Caldwell, 1972). Resulting profits improved club facilities and services, increasing their social benefit and popular appeal. The link between gambling and social benefit was being firmly established in government policy. Gambling for social purposes was seen as acceptable to a population who viewed gambling as an integral part of Australian popular culture (Australian Institute for Gambling Research, 1999).

GOVERNMENT ENDORSEMENT AND MARKET GROWTH: WORLD WAR II TO THE 1970S

Between the 1940s and 1970s, government policies on gambling continued to emphasize social benefit, although attention turned toward controlling illegal gambling operations, primarily in bookmaking and gaming machine operations. State-run totalisators provided the solution. Betting on horse races was officially restricted to on-course bets with licensed bookmakers. However, Painter (1996) argued that a thriving illegal off-course betting industry has always accompanied organized racing in Australia. By the 1960s, all Australian states had established government-operated off-course betting shops and totalisators called the Totalisator Agency Board (TAB).

Government moves to stamp out illegal gambling justified the spread of legalized commercial gambling in Australia during the 1950s and 1960s. The 1960s saw legalized gambling operations restricted mainly to state governments and not-for-profit organizations. Crime control and efforts to remove corruption added further legitimacy to legalized gambling. This was accompanied by the morally defensible purposes of raising revenue for churches, charities, governments, and not-for-profit organizations. Among the latter were NSW clubs, which gained the legal right to operate poker machines in 1956 (Hing, Breen, & Weeks, 2002).

In 1956, NSW clubs were successful in gaining exclusive legal rights to machine gaming operations, with the stated official justification focusing on characteristics that differentiated clubs from profit-focused, openly accessible hotels. These characteristics, including the social benefits provided to members and the community, restricted access to clubs and their poker machines, and the fact that poker machine profits did not accrue to individual business owners, were used as factors justifying exclusive gaming machine concessions. The importance of the clubs’ not-for-profit status, membership requirements, and social role was clear when the Gambling and Betting (Poker Machines) Act 1956 NSW was passed. The community benefit rationale for clubs was very important (Hing et al., 2002).

From 1956 to the 1970s, the evolution of the NSW club industry was characterized by exponential growth in the number of clubs and club members, and increasing appeal to working-class people. Mackay (1988) identified privileges underpinning the appeal of clubs, including more liberal trading hours than hotels, exclusive rights to operate machine gaming, and the introduction of a superior form of social drinking (Mackay, 1988). Thus, Australian gambling policies by the beginning of the 1970s were characterized by government ownership of the lotteries and TAB, tight regulation or restriction of private operators such as clubs and bookmakers, and prohibition of machine gaming in all jurisdictions except NSW clubs (McMillen, 1996b).

COMMERCIALIZATION, COMPETITION, AND MARKET EXPANSION: 1970S TO THE PRESENT

Economic pressures and social instability in the 1970s forced governments to rethink existing policies and find new stimulants for economic growth. Social, technological, and economic factors encouraged this transition (McMillen, 1996b). Social changes, such as increased leisure time and community affluence, along with economic trends such as the growth of tourism, made gambling more attractive to private investors. New technology enhanced management and control of gambling infrastructure and provided stable profits and taxes through predictable returns. The economic pressures of a series of recessions, cutbacks in federal funding, and an ideological move toward economic rationalization forced impoverished state governments to review policies and find new ways to stimulate growth. Although state government reactions to these developments varied, they all legalized new forms of gambling during the last decades of the twentieth century (McMillen, 1996b).

Competition for gambling dollars saw a fall in the popularity of lottery tickets but a rise in the number of new lottery products such as Lotto, soccer pools, Powerball, and instant lottery. Both government and commercial providers operate lotteries. Australia accounts for slightly less than 2 percent of world lottery sales, yet Australian lottery gamblers have a high frequency of gambling. Over half of lottery gamblers buy lottery products once a week or more (Productivity Commission, 1999).

The monopoly on gaming machines enjoyed by NSW clubs for twenty years ended in 1976. Other states and territories were deterred by pressure from ...

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Contents
• About the Editor
• Contributors
• Preface
• Section I: History, Development, and Legislation
• Section II: Operation
• Section III: Gaming and Society
• Index