Gambling, Freedom and Democracy

Peter J. Adams

• Publisher: Taylor & Francis
• Year: 2007
• Print ISBN: 9780415957625
• eBook ISBN: 9781135907280
• Edition: 1
• Topic: Social Sciences
• Subtopic: Criminology
• Index: Social Sciences

As a consequence of the rapid proliferation of commercial gambling in Western-style democracies, governments and communities are encountering a complex array of economic, social and cultural harms associated with this expansion. This book focuses specifically on harms to democratic systems. It examines how people with key roles in democratic structures are vulnerable to subtle influence from the burgeoning profits of gambling. It focuses particularly on the Western-style democracies of North America, Europe and Australasia. It argues that governments have a duty of care to protect their own democratic processes from subtle degradations and that independence from the gambling industries needs to be proactively built into public sector structures and processes. It outlines how a public health approach, harm minimisation strategies and international conventions can provide the base for protecting the integrity of democratic systems.

1
Introduction

In the first decade of the new millennium, several affluent economies have already experienced 20 years of unprecedented rises in gambling consumption. Details in specific countries are not easily obtained and there are large variations in how national consumption data are reported. For example, some calculate net expenditure on gambling differently by excluding reasonable operational costs, but others are affected by inflated estimates of what it takes to deliver the product.¹ Despite these variations, gross estimates give some idea of the scale of current annual consumption. At the upper end, the Canadian theorist, John Ralston Saul (2005) estimated that worldwide expenditures on gambling total around $900 billion per year.² This estimate is most likely an exaggeration, but it highlights the absence of data on global expansion. A more accurate guess could be inferred from official consumption figures including an estimated expenditure in 2004 in the United States of $78.6 billion,³ a Canadian expenditure of $12.4 billion (Statistics Canada, 2005),⁴ a combined $14.2 billion in Australia and New Zealand,⁵ and around $15 billion in the United Kingdom (U.K. Gambling Commission, 2005–2006).⁶ These figures together add up to an annual consumption of more than $110 billion. However, the figures leave out the considerable amounts of money that are expended in unofficial and illegal gambling (e.g., sweepstakes, raffles poker among friends, etc.), as well as unrecorded amounts spent on Internet gambling. When these are combined with less documented but rising levels of gambling in other parts of Europe, Latin America, east Asia, and central Asia, it would be reasonable to expect the annual global expenditure on gambling to be reaching levels above $300 billion. These are high amounts, particularly when they are contrasted with other leading global expenditures. Although gambling does fall well short of the highest expenditure, where in 2003 an estimated $950 billion was spent globally on military equipment and armaments, it does rank at a similar level to another leading global expenditure of an estimated $364 billion in 2001 on pharmaceuticals (Pan America Health Association, 2004).

What differentiates gambling from other large expenditures is the rate at which it is increasing. For example, in the South Pacific gambling expenditure in Australia increased from $4.7 billion in 1990 to $10.5 billion by 2000 (an adult per capita increase from $242 to $505), and in New Zealand, gambling expenditure rose from $0.4 billion in 1991 to $1 billion by 2001 (an adult per capita increase from about $100 to $234). From this increased consumption governments are deriving progressively higher revenues. For example, in 2003 the Canadian government received revenue of $5.1 billion, which was greater than the $5.0 billion received from alcohol and tobacco combined (Marshall & Wynne, 2004). As the global proliferation of commercial gambling continues, it is not unreasonable to expect that over the next 10 years gambling could rank with the highest expenditures in the world.

In most cases, the expansion of consumption is associated with the progressive commercialization and resultant increases in the availability of higher intensity forms of gambling, most important, the introduction of new “continuous” forms of betting. The more traditional noncontinuous forms of gambling such as race betting and lotteries involve significant time delays between placing a bet and knowing the outcome. Continuous forms of gambling, such as casino table games and electronic gambling machines (EGMs), involve very short delays between betting and its outcome, enabling rapid and repeated betting within a short period of time. In many countries, continuous forms of gambling are eclipsing noncontinuous forms. For example, gambling expenditure on EGMs has risen markedly over the last decade in Australia, the Netherlands, and New Zealand to over half the respective total gambling expenditure.⁷ Casinos and EGMs have spread steadily in availability throughout most of the United States and Canada. With the fall of the Iron Curtain, European countries in transition are exploring the revenue capacity of continuous forms of gambling to finance aspects of their development. For example, joint venture partnerships are establishing casinos in Slovenia, Hungary, Poland, and the Czech Republic. Many Asian nations are also intensifying their relationships to gambling. Japan has a long, established relationship to a skill and luck-mixed EGM called pachinko, which is now in widespread use throughout their communities. Large casinos are becoming a more prominent feature in places such as the Philippines and Macao. With its dramatic economic growth, the government of mainland China is beginning to seriously explore the potential of new forms of gambling (Gu, 2000; Hulme, 2005).

It would be expected that with such dramatic shifts in financial and leisure investment, responsible governments would seek to carefully monitor what rapid proliferation might mean for their communities. The change is bound to have major implications for social and financial transactions. However, despite the rapidity of the modern expansion, remarkably little is known yet about how the scale of this increase will affect the way people live in the long term. The majority of research effort to date has focused on population prevalence studies. Little investigation has occurred into the impact of high-intensity gambling on families and communities. Few studies have explored the broader social and economic changes. Little is understood about how the design of new forms of continuous gambling could be varied to reduce their harm potential. Research is only beginning on the addictive processes associated with new forms of gambling and little is understood about effective interventions (Jackson et al., 2000; Raylu & Oei, 2002). The international research on gambling simply lacks adequate information to predict how gambling and social systems will interact 20 years into the future. What is worse, none of the countries embarking on rapid proliferation have assembled adequate processes to monitor the consequent social and economic changes that will occur. It is as if governments around the world have collectively chosen to embark on an unprecedented social experiment—a bold experiment—with little idea of the medium- or long-term consequences of what they are pursuing. How are we to make sense of their bold undertaking? How will it impact the social and economic systems of those who get involved, and what will the long-term effects be on political systems and the foundations of democracy itself? These are concerns that I seek to address in this book.

ECOLOGICAL DEGRADATION

The current international proliferation of gambling can be productively compared to the expansion of other commercial operations that involve the large-scale exploitation of primary resources. Primary extractive industries such as the mining of precious metals, the logging of primeval forests, or the netting of ocean fish species focus efforts on converting a primary resource for which there is a demand into a unitized and transportable product for distribution and sale. Commercial gambling closely resembles these extractive processes. Gambling operations directly exploit systems of financial transaction within a particular context. As with the natural environment, the processes of extraction for gambling interact with a range of interlocking systems. These systems include those that underpin the patterns of social interchange, those that incorporate language and cultural practices, those of legal transaction, those of friendship and kinship, and those complex networks of social involvement that spread across localities and territories. For example, the first installment of a set of EGMs in the main hotel of a small town will connect immediately with the flow of money within that town and affect patterns of social and leisure activity. In time, through consequent increases in debt and problem gambling, family systems will be affected and legal issues will emerge in the form of increases in property crime. In a similar fashion to the way mining and logging interact with the complex systems of the natural world, the introduction of commercial gambling connects into the social and political ecologies within a broader context.

To illustrate this comparison, consider the effects of commercial logging on the primeval forests of Indonesia’s outer islands of Kalimantan. Prior to 1967, little of these extensive tropical forests had been disturbed. They had grown there for millions of years, developing complex networks of vegetation and animal life. Their complexity spread across and between different levels that involve systems in the soil, in the undergrowth, in the growth of trees, and in the overhanging canopy. After 1967, with incentives and encouragement from government, an emerging logging industry focused its efforts on the clear-logging of vast tracts of tropical forest. At the beginning of his long rule as leader of Indonesia, President Soeharto faced a range of severe economic and political problems and logging offered a convenient source of much needed revenue and assisted in his drive to centralize his political power base. There was also pressure for agricultural land to feed Indonesia’s rapidly growing population. Logging began in earnest in 1967, and the harvest doubled between 1970 and 1975. At its high point in 1979, gross foreign exchange earnings were $2.1 billion and the country was the world’s leading exporter of tropical logs with 41% of market share (Osgood, 1994). After the 1980s, the industry shifted to value-added wood products, particularly tropical plywood, and by the late 1980s Indonesia was producing 79% of the global supply. Following this, the pulp and paper industry began to take off and by 2001 it was the largest income generator in the Indonesian forestry industry. What had been one of the most biologically diverse ecosystems on the planet was progressively peeled off the land, leaving little that recognized its economic, biological, and environmental value. Few were ready for the rapidity and scale of this deforestation and it has had serious ongoing consequences, not only in the local context, but also for the global environment. The loss of old-growth forests has led to degradation of a unique biodiversity. The increase in forest fires has polluted the air with toxic fumes and ash, which in turn have made significant contributions to the greenhouse gases that are raising global temperatures.

The social and economic networks in which people build their lives resemble in many ways the interlocking complexities of the natural world. In the tropical forest, major changes to the upper tree canopy of will affect lower vegetation, which in turn affects insect life, which then affects animal life, which then affects lower vegetation, and so on. With groups of humans, changes in the social ecology of a particular community will entail changes within other connected systems. For example, the introduction of new ways of spending money will interact with financial and social systems in ways that have knock-on effects in terms of leisure time and patterns of social involvement. This is particularly the case with gambling. Commercial gambling, as essentially an extractive industry, does not establish its own base and contributes little to establishing the primary resources on which it draws. It progresses by plugging into and exploiting systems of social and economic transactions that already exist. It introduces little into community systems in terms of new materials and new investments. Instead, it latches onto the broader social ecology of human interaction and engages people in changes to the way they spend their money and time.

FEATURES OF EXTRACTION

The parallel with large-scale commercial logging helps identify five salient features that can be usefully transferred into understanding the modern expansion of commercial gambling. The first feature relates to the commercial nature of extractive industries in their early phases of development; the second feature focuses on the development of new methods and technologies for extraction; the third feature focuses on the creation of a frontier society that services the expanding industry activity; the fourth feature focuses on the importance of the relative size and scale of commercial activity; and the final feature describes how resistance to the initial expansion is compromised by the naivete of resident populations.

Commercialization

The nature of primary extraction changes radically when the strategies and disciplines of larger commercial operations are applied. The isolated woodsman felling trees to meet a small local demand for firewood and building materials will have minimal impact on large forests, and business growth will most likely remain very modest. Once a commercial organization moves in, it brings with it the capacity to organize the extraction process on a larger scale. Managers and developers cast their gaze wider than the local scene. In reviewing the needs of more distant markets, they identify a major commercial opportunity and in response they organize new transport systems, enlist an appropriate workforce, and apply the most up-to-date methods of extraction to ensure the constant delivery of wood products to the places that need them. Obviously the new operation will initially require significant investment capital, but this is soon recovered because in the early phases of extraction the target raw material is easily accessed and felling is unimpeded by resistance from a knowledgeable public or a government keen on regulation. The organization, its operations, and its profits grow quickly and the scene soon attracts other similar organizations seeking a share in the success. As with any commercial operation in a competitive environment, attaining significant growth and profit quickly become critical for survival, for without them the organization would be at risk of losing the confidence of its shareholders and being swallowed by its competitors.

As with commercial logging, the main vehicle for the modern expansion of gambling has been the emergence of larger, profit-driven commercial organizations that bring with them the investment capital that enables them to achieve jumps in the scale of exploitation. What started out in many contexts as small-scale forms of gambling such as card games, raffles and church bingo are quickly eclipsed by new and more potent forms offered by larger and commercially more astute firms. They bring with them investment capital that enables them to achieve wider distribution and promote consumption on a scale unimagined by the small local providers. Their commercial success is soon noticed by other organizations that move in to vie for a place in the market by developing increasingly varied and attractive gambling products. As in forestry, increases in competition magnify the importance of the commercial drive for profits. Survival and success grows increasingly dependent on achieving a competitive edge in the market through new products or innovations in forms of delivery. However, the nature of these organizations is not limited to large private firms. In many situations, such as in Canada and the Netherlands, the dominant commercial organization is the government itself, but the dynamic remains the same. Governments run their forms of gambling to maximize a financial return to their own stakeholders, the public. Their products, such as lottery tickets, often compete with those of private organizations, and they, too, seek to create a product niche by introducing new products and forms of delivery.

Refinement in Methods of Extraction

The invention and subsequent widespread use of the gas-powered chainsaw enabled fewer workers to fell increasingly larger tracts of forest. This then led to increases in the commercial viability of larger scale operations. Other devices enabled similar increases in capacity: the helicopter for surveying and improving access, the bulldozer for clearing, new logging trucks and log hoists for handling, and the wood-chipper for reprocessing. Along with the gadgets came refinements in the methods of extraction. For instance, new methods and materials for constructing roads increased vehicle access deep into forested regions; improved techniques for controlled burn-offs enabled widespread clearances; the processing of logs into wood chips simplified handling; and the constantly improving network of road, rail, and sea transport systems ensured that wood products would reach their markets. In a parallel fashion, the rapid growth in commercialized gambling has to a large extent been driven by refinements in technology and methods of extraction. Improvements in telecommunications have enabled the marketing of increasingly grander national lottery products. They have also enabled horse gambling to move beyond the racetrack into shops and people’s living rooms. The extensive use of television, radio, and other media has improved the immediacy of each event. The combination of Internet and credit card technologies has opened up new frontiers for product development, such as the arrival of Internet virtual casinos. However, beside these refinements the impacts of improved technology are perhaps best illustrated in the evolution of the EGM. The EGM has done for gambling what the chainsaw did for forestry. It has enabled widespread and intensive engagement with the product. The EGM is best seen as a gambling supply console. It has evolved into a complex and flexible delivery platform upon which a range of technologies can be employed to maximize consumer engagement and enjoyment.

In constructing an EGM, innovative designers have a considerable amount to play with. They can change the size of jackpots,...

Table of contents

• Routledge Studies in Social and Political Thought
• Contents
• Preface
• 1 Introduction
• 2 Subtle Degradation
• 3 Governments
• 4 Communities
• 5 Freedom in the Media
• 6 Gambling Advertising
• 7 Researchers
• 8 Helping Professionals on the Frontier
• 9 Protecting Independence
• 10 Strategies for Change: Three Ways Ahead
• 11 Facing the Future
• Chapter Notes
• References
• Index