Marketing, Gambling, and the
Socioeconomic Impacts: The
Canadian Context
 Today’s Agenda
 Current Zeitgeist and Marketing of Gambling PPT
 Group Gaming Presentation # 2
(ALGC, 2011; CDC, 2009; Williams et al., 2011)
1
CURRENT
ZEITGEIST
(ALGC, 2011; CDC, 2009; Williams et al., 2011)
2
 The western view of gambling has changed from gambling
as deviant and immoral to gambling as leisure
entertainment, a form of adult play. The causes of this are
unclear, but are probably related to




It has been some time since the public has been exposed to the harmful impacts of
gambling
Because we now have more disposable income and more leisure time (similar to the
aristocracy historically)
The weakened authority of the church, usually the main critic.
The gradual increase in pervasiveness of gambling opportunities.
 In modern Western democracies, our current attitude
toward gambling is very similar to our current attitude
toward drinking alcohol:


Excessive gambling, like excessive drinking, can lead to addiction.
There should be some controls to minimize the harm, but it should be legal and available to
the general public.
(ALGC, 2011; CDC, 2009; Williams et al., 2011)
3
 Gambling is now organized on commercial principles. The commercial
orientation, technology and style of the U.S. approach has strongly
influenced the objectives and character of global casino development, in
large part due to the investment strength of American casino
corporations and the market structure of international tourism.
 Fair amount of research now on the regulatory and administrative aspects of
cost-benefit analyses.
 Lot of economic justification for gambling (creates jobs; good way of raising
money for good causes; keeps money from leaving the jurisdiction)
(ALGC, 2011; CDC, 2009; Williams et al., 2011)
4
Canada
(ALGC, 2011; CDC, 2009; Williams et al., 2011)
5
A Few Important Developments
1969 Law permitting federal and provincial governments to operate lotteries of
any size
Quebec first to set up lottery in 1970, but end of 70s all provinces join in the
sweepstakes.
Federal government and provincial governments fight over lottery jurisdictions
1979 Ottawa withdraws from lotteries in return for receiving an annual inflationadjusted cash payment from the provinces
By 1985 then Prime minister Brian Mulroney amended the Criminal Code to
place all forms of gambling (except horse racing) solely under provincial
jurisdiction.
This same amendment allowed provincial governments to run VLT’s & slot
machines, which helped to set the stage toward allowing for further delegation
of the management of casino’s to private companies
6
(ALGC, 2011; CDC, 2009; Williams et al., 2011)
Let their be gambling…
All provinces introduce either VLT’s or slot
machines (Manitoba 1989 – B.C. 1997)
All provinces except N.B., P.E.I. &
Newfoundland introduce permanent
casinos (Alberta 1980 – B.C. 1998)
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
7
Alberta Gambling Venues
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
8
9
(ALGC, 2011; CDC, 2009; Williams et al., 2011)
The Most Common Activity
Associated with Problem
Gambling?
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
10
Monies Generated in Alberta
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
11
Where Do the Revenues Go?
 Other than licensing fees that go to the
government, revenue from charitable gaming goes
to charitable and religious groups conducting the
gaming
 The Alberta government’s portion of net proceeds
from EGM’s, slot machines, electronic bingo and
ticket lotteries are placed in the ALBERTA
LOTTERY FUND.
 In 2010-11, approx. 1.4 billion was placed in this
(ALGC, 2011; CDC, 2009; Williams et
fund.
12
al., 2011)
Allocations
Aboriginal Relations.............................$116 million
Advanced Education and Tech...............105 million
Agriculture and Rural Development .........43 million
Children and Youth Services....................63 million
Culture and Community Spirit ................148 million
Education ..............................................114 million
Employment and Immigration ..................12 million
Environment ...........................................0.5 million
Health and Wellness..............................450 million
Municipal Affairs.......................................26 million
Solicitor General and Public Security .......35 million
Tourism, Parks and Recreation................23 million
13
(ALGC, 2011; CDC, 2009; Williams et al., 2011)
Gambling Availability (2008-09)
CANADA
ALL
IN
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
14
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
15
CASINO’S
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
16
EGM VENUES
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
17
HORSE TRACK VENUES
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
18
Player Banked Poker Rooms
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
19
Lottery Tickets Total Venues
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
20
(CDC, 2009)
NET GAMING REVENUE
21
(CDC, 2009;)
Distributions to Problem Gambling /
Responsible Gambling
22
Quebec
57
B.C.
58
Atlantic
59
Prairie
65
Ontario
68
50
55
60
65
70
Percent agreement with statement ‘gambling is an acceptable activity’
23
Ontario
34
B.C.
43
Prairie
48
Quebec
49
Atlantic
60
0
10
20
30
40
50
60
70
Percent agreement with statement ‘more restrictions on gambling needed’
24
Is it enough? Problem Gambling in
Canada
3.2% of Canadian adults are affected by
moderate to severe problem gambling
(Williams, 2009).
2.2% of youth aged 15–24 are affected by
moderate risk or problem gambling
(Huang, 2007).
Where does the money come from?
Top 10% of spenders account for the majority of gaming
revenues. Yet very little is known about the
socioeconomic characteristics of these individuals.
– A portion of these people are wealthy ‘high rollers’. In Las
Vegas high-rollers account for 5% of gamblers but generate 40%
of total revenue. High rollers account for a smaller portion of
revenue in most other jurisdictions.
– In Canada, roughly 33% of gambling revenue comes from
problem gamblers. Proportion derived from problem gamblers
also dependent on the type of gambling: highest for EGMs
(60%) and casino gambling, lowest for lotteries (20%).
SOCIOECONOMIC
COSTS/BENEFITS OF
GAMBLING
Economic Benefits of Gambling
In 2010, the gambling industry in Canada sees the full time employment of
128,000 people, as well as 283,000 indirectly. Wages not high, however,
1/3 compensation comes from tips.
Increased government tax revenues or direct gambling revenue (a voluntary
tax that prevents involuntary tax increases).
Significant revenues for charities.
Increased revenue and employment to complementary industries (hotels,
tourist facilities)
Increased property values (although this also means increased rental costs)
May repatriate gambling money flowing outside the jurisdiction.
(Maple Gambling, 2011)
Economic Costs of Gambling
Displacement or cannibalization of competing industries
– particularly certain gambling industries: horse racing, bingo
– some demise of entertainment and amusement industries (bars,
restaurants, etc.)
– Some demise of general merchandise
Increased infrastructure costs (roads, sewers, police,
utilities, etc) due to increased tourism
Economic costs due to increased problem gamblers
– Absenteeism and loss of productivity; embezzlement
– Costs of police, trials and incarceration
– Health and treatment costs
3 Ways to Economic Benefits

Inflow of money or resources from outside the
jurisdiction.

Creation of something of value that adds to
wealth of the jurisdiction (because of its intrinsic
wealth) or increases the value of other things in
the jurisdiction.

Increasing the number and frequency of
monetary transactions between individuals so
that more people can benefit from the existing
wealth within a district.
Social Benefits of Gambling
Positive social effects due to positive economic effects (e.g.,
employment, govt revenues)
Gambling as an enjoyable leisure activity; a form of adult play. This
is how it has always been seen in Chinese culture.
– The pleasure of fantasizing about being rich
– The pleasure of being intoxicated (gambling as a high)
– The pleasure of escape (gambling as theatre). Perhaps for some it is an
effective way of handling stress.
Gambling may provide social support to isolated older adults.
May encourage an entrepreneurial, risk-taking spirit. Provides players
with an opportunity to demonstrate strength of character and
commitment to valued social codes such as risk-taking, courage and
honesty.
Gambling & Crime
Legal gambling has a dampening effect on illegal gambling and
corruption.
– In western Canada illegal gambling still extensive in the four largest
cities—Vancouver, Calgary, Edmonton, and Winnipeg; less so in
medium-sized cities and a minor concern in rural areas (Smith &
Wynne, 1999)
– A small portion of laundering money is laundered in casinos
– Mostly sports betting with a bookmaker, unauthorized poker clubs,
unlicensed VLTs, and offshore lottery sales (Smith & Wynne, 1999)
– (if govt offered competitve odds it would drive out all illegal gambling)
– In Ontario, there are illegal gaming venues offering blackjack, poker,
roulette; patronized because they offer services not available elsewhere
(prostitution; house credit; drugs)
Illegal gambling will always exist if it has a competitive edge (more
convenient, better odds, different games, house credit,
drugs/prostitution, tax-free winnings)
Social Costs of Gambling
Undercuts work ethic?
Corrupting influence on society because it promotes
materialism and hedonism?
Creates divisions within society because of different
attitudes and religious beliefs about gambling (e.g., intratribal divisions in many tribes that established casinos)
Corrupting influence on governments and nonprofit
sector. Their dependency on the revenue blinds them to
the fact that 1/3 of this money comes from problem
gamblers.
Gambling Increases Prevalence of Problem Gambling
Roughly 3.2% of population in Canada is a problem
gambler, which represents a significant increase from
20 years ago.
–
–
–
–
–
–
–
depression
suicide
bankruptcy
Crime
Work or school problems
Health problems
Problems with Family or Friends
Problem gamblers impact their families with all
of the above, plus:
– Spousal abuse or divorce
– Child neglect
– Modelling of gambling to children
Impact on PG prevalence rates tend to take a
few years, then stabilizes, then perhaps
decreases.
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
35
Do the social and economic benefits
outweigh the costs or vice versa?
The answer depends on the circumstances
of the jurisdiction
Depends on whether the gambling patrons are tourists or locals.
– If locals, then most of the economic ‘benefits’ represent
cannibalization of other industries and no ‘net’ increase in
wealth to the jurisdiction. If tourists, this represents a true inflow
of new wealth.
– If locals, you increase problem gambling prevalence rates in
your own populace. If tourists, the ‘problems’ go home with the
tourists.
Depends on the type of gambling (i.e., some forms like lotteries create
very few problem gamblers, other forms, like VLTs create high
proportions of PGs and very few employment benefits).
Depends on where profits go…
Employees local or not
Owners local or not
Profits reinvested locally or on other
projects elsewhere
Depends where the supplies are purchased from
(gambling equipment, furniture, food, hotel
supplies)
Depends where the taxes and revenues go
(taxes/revenues going to the jurisdiction or
federal/provincial level; tax money reinvested in
the region?)
38
(ALGC, 2011; CDC, 2009; Williams et al., 2011)
Winners
Las Vegas
90% money from visitors
owners local and reinvest in other local operations
problem gamblers go back home
not a manufacturing or agricultural region so a lot of money spent on
supplies from elsewhere
Atlantic City
Similar to Las Vegas
Many U.S. Native casinos
Native casinos also do not pay federal tax, so revenues stay on site
Tourist-restricted or tourist-dominated venues around the world (e.g., France,
Vietnam, Macao, etc.)
Large, destination-style casinos on Canadian border (Windsor, Niagara Falls) that
draw significant portion of patronage from U.S.
Losers
Everywhere else
Marketing Gambling: How do they do it?
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
42
Marketing: Two Factors
Situational factors:
– Foundational characteristics that induce first gambling experiences (i.e.,
location of outlet, number of outlets, use of advertising).
Structural factors:
– Any gaming device/design that exists outside the individual that may
facilitate the maintenance of a gambling behaviour.
– These devices not only maintain a behaviour, but in fact may make a game
addictive.
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
43
Race Tracks
Marketing “mystique” – getting closer to the
bourgeoisie
A taste of the good life
Today this mystique has fallen
Now racetracks are marketed through intrinsic
association or proximity of play
(ALGC, 2011; CDC, 2009; Williams et al., 2011)
44
Casino’s – Situational
Vacation destinations
VIP Services
Free food / drink
Sin City
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
45
Casino’s – Structural
Gambling environments are created to intensify the impact of ones
experience through casino or venue design which deliberately
manipulates sensory and cognitive influences.
Intense visual and auditory stimuli enhanced to the maximum.
Lights and sounds pervade casinos and are used to saliently signal
wins and rewards.
Casino’s typically do not have clocks, windows, passage of time is
downplayed.
Excess to alcohol, which has a direct neurochemical effect leading
to altering judgment and increasing risk-taking.
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
46
Payment Characteristics
Suspension of Judgement and Cashless
Gaming
– Cash turned into vouchers: misinterpret value of
money
– Smart Card: isolated play, no interruptions
– Alternative argument “May also encourage
responsible gaming” … I know how much I can spend
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
47
Bet Sizes and Bill Acceptors
Conflicting evidence regarding bet sizes
Meanwhile bill acceptors may cause:
• Un-interrupted play
• De-value money
• Isolated play
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
48
Cash / Credit Display
Conflicting evidence
Structurally the argument is that if the gambler views
money disappearing on the EGM screen as opposed to
credits, the gambler is likely to:
– Bet less
– Stop themselves when losses begin to add up
– Less likely to chase losses… But now we can switch to either
or…?
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
49
Playability Characteristics (Structural)
Bonus Game, the game within the game
– The idea behind the bonus game is to increase
playability and ultimately give the gambler an illusion
of control.
– As such, the gambler believes that they have more
ability to bring about a win, manipulated through...
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
50
Stop Buttons
Gamble Buttons
Touch Screen
– Essentially, the bonus games along with
the latter features brings us to the
Near Miss
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
51
Psychology of Familiarity

Other technological advances
in EGM machines have also
played into the hands of the
structural marketing
technique known as
“psychology of familiarity.”

This speaks to playing on one
machine more than the other.

Beyond the obvious attraction
to the common, novel,
(socially and culturally)
Parke and Griffiths (2007)
hold that gamblers may fall
victim the psychology of
familiarity because...
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
52
Psychology of Familiarity

EGM gamers trust in an international symbol (celebrity) – thus
jackpots maybe be higher, “I won’t be ripped off.”

Experience , gamblers believe they have an added advantage
because they have knowledge of the game (i.e., price is right, wheel
of fortune), which directly affect the EGM game.

Fun – the newer games are more interactive, music is hip,
humorous, ect.

Ultimately, in addition to the newer games being played more,
gamblers supposedly may not be affected by their losses as usual,
and continue to play despite mounting losses.
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
53
Psychology of Familiarity
1. Fear Factor
2. Price is Right
3. Monopoly
4. Wheel of Fortune
5. Simpsons
6. Spider Man
7. King Kong
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
54
Event Duration
 Event duration simply refers to how fast is
the event (i.e., reel speed).
 Hence, the faster the event, the more opportunity
their is to win or lose.
 EGM machines today and their speed can be
manipulated by the gamblers, the faster you hit
the bet button, the faster your money goes,
increases, or the closer you are to hitting the
jackpot or entering into the bonus game.
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
55
Payout Intervals
Closely related to event duration, is the
payout interval.
Research tells us (operant conditioning)
that humans are prone to seek rewards.
Hence, the casino industry produces high
rates of response via random and variable
ratio schedules.
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
56
Chance Ideology
Lotteries
Upward mobility!
Regressive tax…
Escape your life/job!
Could you imagine?
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
57
Summation
 Empirical evidence does exist revealing that games that
offer a fast, arousing span of play, frequent wins, and the
opportunity for rapid replay are associated with problem
gambling.
 In essence, if we look at addiction and understand to be
highly related to the pairing of reward and the speed by
which we can receive an award
 It might would be foolish to disregard the structural
characteristics of EGM machines and their role in the
development of a gambling problem...
 Or would it?
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
58
Group Task For Movie Emersion (using the movies, readings, lect
material, and your opinions)
1.
Create a written statement declaring whether you are for the current gambling
ethnos (culture) or want to sanction or modify it. Need to declare reasons and
evidence for why?
2.
Afterwards, it is your group’s job to lobby other groups to support your position. In
order for your group to do this – the group(s) you lobby must have more than 50%
of “their” group agree with your group’s position (collects votes/signatures).
3.
Be prepared to discuss your case in front of the class / at the beginning of next
class; along with declaring which groups are in favour of your stance.
4.
The group with the best argument / coupled with having a minimum of at least two
supporting lobby groups wins.
5. Remember the groups you lobby and get support from have to make sense
with respect to your declaration and theirs. If their support doesn’t make sense in
relation to your declaration.
Support will be withdrawn!!!
(ALGC, 2011; CDC, 2009; Williams et
al., 2011)
59