Chapter 3. Gambling Regulation

legalized gambling has almost always been CHAPTER 3. GAMBLING accompanied by the establishment of a REGULATION1 corresponding regulatory regime and structure. Over the past quarter century, legalized gambling GOVERNMENTS SET THE RULES in America has undergone a rapid expansion. Much of gambling regulation is focused on Once an infrequent experience tinged with the policing functions that differ little from exotic—a trek to the distant Nevada desert once community to community. The most immediate was a common requirement for those seeking of these is ensuring the integrity of the games casino gambling—it has since become a offered, a function often valued most by the common feature of everyday life, readily proprietors of gambling establishments accessible in one form or another to the vast themselves. In the popular imagination, the majority of Americans. As it has grown, it has “con” man forever hovers in the shadows of become more than simply an entertaining gambling; and, in truth, without the stern pastime: The gambling industry has emerged as presence of independent regulators, it would an economic mainstay in many communities, require little effort to conjure methods of and plays an increasingly prominent role in state conflating “games of chance” with outright and even regional economies. Although it could deception. Thus, to the extent that governments well be curtailed or restricted in some assume a general responsibility to shield their communities, it is virtually certain that legalized populations from fraud, regulation is the most gambling is here to stay. effective means of ensuring that such legal Despite its increasing familiarity, nowhere is gambling as does exist is fair and honest. gambling regarded as merely another business, A second area of government concern is crime, free to offer its wares to the public. Instead, it is especially organized crime. Fairly or not, the target of special scrutiny by governments in Nevada’s casinos were once closely linked in the every jurisdiction where it exists, including even popular mind with organized crime, a bias given such gambling-friendly states as Nevada. The substance by repeated federal and state underlying assumption—whether empirically investigations and prosecutions of casino owners based or not—is that, left unregulated and and operators. Because of the volume of cash subject only to market forces, gambling would transactions involved in casino gambling, and in produce a number of negative impacts on society order to minimize any resulting potential for and that government regulation is the most money laundering, casinos must comply with appropriate remedy. Thus, the authorization of requirements regarding the reporting of these transactions. All of the evidence presented to the 1 Regulating Casinos Gaming: A View from State Regulators by Commission indicates that effective state Michael A. Belletire, Administrator of the Illinois Board. This regulation, coupled with the takeover of much of document was developed for the NGISC at the request of the the industry by public corporations, has Commission’s Subcommittee on Regulation, Enforcement, and the Internet. Direct contributions to the content and topics discussed in eliminated organized crime from the direct the document were made by the following individuals: Steve ownership and operation of casinos. DuCharm and Dennis Neilander (Nevada), Frank Catania (New Jersey), Chuck Patton (Mississippi), George Turner (Colorado), Mel Fischer (Missouri), Jack Thar (Indiana), Jack Ketterer (Iowa), Hillary Crain (Louisiana), and Mac Ryder (Illinois). This chapter also benefited from state reports submitted directly to the GAMBLING AND THE PUBLIC INTEREST Commission. For example, see New Jersey Casino Control Commission, Casino Gambling in New Jersey: A Report to the In addition to these relatively well-defined National Gambling Impact Study Commission (January 1998) and Mississippi Gaming Commission, Regulating Gaming in policing functions, a broader and far more Mississippi: Policing an Unprecedented Phenomenon: A Report to important role for government regulation is the National Gambling Impact Study Commission (1998). Gambling Regulation Page 3-1 National Gambling Impact Study Commission Report determining the scope and manifestation of industry is not monolithic; each segment— gambling’s presence in society and thus its lotteries, Native American casinos, convenience impact on the general public. In this sense, gambling, and so forth—comes with its own regulation can be broadly defined to include the particular set of issues, concerns, and interest political process by which the major decisions groups, one result being that the respective regarding legalized gambling are arrived at, the regulatory structures and objectives often differ corresponding legislation and rules specifying considerably from segment to segment. Further, the conditions of its operation, and the direction the dynamism of the industry as a whole requires given to regulatory bodies. Through such means continuous adaptation on the part of regulation: as specifying the number, location, and size of In addition to a rapid pace of expansion, gambling facilities; the types of games that can technology continues to produce new and be offered; the conditions under which licensed different forms, often directly aimed at any weak facilities may operate; and so forth, governments links in government restrictions and regulation. have considerable control over the benefits and costs legalized gambling can bring with it. These Far more worrisome than these factors, however, measures can be as simple and straightforward as is that most government decisionmaking has attempting to prevent underage gambling or as been chasing rather than leading the industry’s ambitious and contentious as promoting growth and evolution and has often focused on traditional social values. less-than-central concerns, to the neglect of the larger public interest. One of the more damning If this basic responsibility is to be adequately criticisms of government decisionmaking in this met, government decisions regarding the areas is the assertion that governments too often introduction and regulation of legalized have been focused more on a shortsighted gambling would best be made according to a pursuit of revenues than on the long-term impact well-defined public policy, one formulated with of their decisions on the public’s welfare. specific goals and limits in mind. While governments have established a variety of Not unexpectedly, the results of decisions regulatory structures, it is not at all clear that regarding legalizing gambling often produce these have been guided by a coherent gambling results that surprise even the officials responsible policy or even that those making the decisions for making them. And not all of these results are have had a clear idea of the larger public purpose positive. Without constant adaptation to this they wish to promote. Generally, what is missing changing industry, time alone will produce a in the area of gambling regulation is a well mismatch between the stated goals of thought-out scheme of how gambling can best be government regarding gambling and the actual utilized to advance the larger public purpose and effects resulting from its decisions. Given the a corresponding role for regulation. Instead, rapid accumulation of decisions regarding much of what exists is far more the product of gambling, most of the respective governments— incremental and disconnected decisions, often and certainly their respective communities— taken in reaction to pressing issues of the day, would be well-served by a thorough review of than one based on sober assessments of long- their public policy toward gambling. This review term needs, goals, and risks. should focus on determining the specific public purpose regarding legalized gambling and an There are a number of factors contributing to this assessment, in that context, of the existing gap between measures actually taken and any regulatory structure in its entirety: laws, rules, guiding public purpose, however conceived. One agencies, and so forth. The objective of this such factor is the existence of multiple review is to identify what changes, if any are decisionmakers: Federal, state, tribal, and local needed, with a goal to maximizing the benefits officials all have a say in gambling policy, and and minimizing the costs. coordination among any of them is far more the exception than the rule. In addition, the gambling Although wide-scale legalized gambling is a relatively recent phenomenon, the large number Gambling Regulation Page 3-2 National Gambling Impact Study Commission Report of jurisdictions involved, operating under many business enterprise involving gambling.”5 Other different conditions, has produced a useful federal laws add to these measures, such as the variety of experience for other communities to prohibition on the inter-state transportation of draw on. By examining this variety of positive wagering paraphernalia.6 and negative experiences, governments can draw the appropriate lessons from the successes and One of the best known federal measures is the Racketeering Influenced and Corrupt mistakes of others and thereby reduce the need to 7 experiment on their communities. Organizations statutes (RICO). Enacted in 1971 under the Crime Control Act, the RICO were aimed at combating “the infiltration of organized crime and racketeering into legitimate REGULATING GAMBLING organizations

Load more