Public Morality and Gambling Policy

Public Morality and Gambling Policy

Public Morality and GamblingPolicyPresentation to the EASG Conference at MalmoByProf Peter CollinsUniversity of SalfordJune 2005

Questions and AnswersQ: Why do Governments, at least in democracies wherethey have to take account of public opinion, so oftenproduce bad gambling legislation?A: Because it is quite difficult and complicated activity toproduce good gambling law legislate for bit not a veryimportant one and therefore politicians and civil servantsdon’t devote the necessary time to thinking the issuesthrough?Q: Why is is it difficult to make good gambling law?A: Because it involves understanding and reconcilingconflicting principles in relation to public or politicalmorality and this creates large opportunities andincentives for groups to promote the economic, politicaland ideological interests by exploiting different appealsto principle

The Normative and The Empiricalin Policy-Making• Normative judgments generally purport toidentify the moral ideals, values or principleswhich ought to guide individual and collectiveconduct.• Moral judgments in politics identify aspects ofthe kind of society which we think we ought tobe trying to create or preserve• Empirical judgments purport to tell us what thefacts are and how they relate to one another• Empirical judgments in politics tell us what willbe the likely consequences of different coursesof action

What good gambling legislationrequires• Governments need to avoid mistakes about theempirical facts – e.g. tourism predictions,optimising tax rates, effectiveness of antiproblemgambling measures• But governments need to avoid mistakes in theirnormative thinking and think through their moralcommitments especially when they encounterconflicts between moral principles• These latter kinds of mistakes are less wellunderstood than the former

Principal Values UnderpinningPublic Policy in Plural Societies*• Security: protection of citizens against foreignaggression; against force and fraud at hands of fellowcitizens; and against avoidable harm, e.g. through illnessor natural disaster• Liberty: individuals should not be prevented from livingas they choose provided they don’t harm others – and towork, to buy and sell as they choose• Justice in retribution and distribution• Maximising Prosperity and Minimising Poverty* = Those that tolerate a diversity of opinions about valuesor normative issues

So what’s the Problem?Why don’t we treat gambling like any other part of theentertainment industry (novels, restaurants etc) and:• Providing there are adequate protections against forceand fraud and health risks• Allow willing buyers to do business with willing sellers• Paying normal taxes• And creating some additional prosperity throughconsumer surplus - and perhaps some export earnings(tourism) and import substitution (discouraging domesticgamblers from going abroad)?

The Problem for Gambling isDemocracy• Democracy is a system of government which forcesrulers (those who make the rules) to conform theirbehaviour to what (majority) public opinion will approveor at least accept• It is the only form of government which accords with theprinciple of political equality and it is in practice moreconducive to the protection and promotion of liberty andthe protection of rights than alternative systems• But it does not guarantee wise or efficient or morallyadmirable decisions and• It allows people to ensure that policy reflects theirown moral preferences

What does Public Opinion Thinkabout GamblingIt is conflicted• Some think that the form of gambling they supply ismostly harmless and provides a lot of pleasure and soshould be treated no differently from any otherentertainment service• Some think gambling is inherently wicked andsubversive of the moral basis of society• Most think it largely harmless but retain somerestrictionist misgivings on the basis that for some it canbe highly dangerous for some and it is not majorenhancer of the quality of life or a major contributor tohigh cultureHence the democratic consensus/compromise: “ “We’llhave some but not too much”

Why does other people’s gamblingmake us nervous?• It offers the opportunity for people to getmoney without working for it• It defies the social law which states thatmoney (income and wealth) must bedistributed according to desert• Like promiscuity undermines the kind ofresponsible behaviour on which thesurvival of society depends (or used to).

Political Sub-Principles which this DemocraticConsensus Introduces and which apply particularlyto gambling legislation• Individuals should be allowed to choose forthemselves how to spend their own time andtheir own money in pursuit of entertainment,even if other people their choices are stupidor wicked or bad for them• Vulnerable individuals, notably children andpotential “addicts,” should be protected fromexposure to dangerous substances andpractices• The democratic rights of sub-nationalcommunities must be decide and secured

Economic Sub-Principles which this DemocraticConsensus Introduces and which apply particularlyto gambling legislation• Fair competition policy must beestablished in respect of awardinglicences• The public economic benefits which comefrom legalising gambling should benefitthe least adavantaged and the flow oftaxation should ensure redistributionfrom richer to poorer not vice versa• Existing interests should not bedisturbed save for good cause shown

Meta-Principles which applyparticularly too gambling• The law should promote stability andpredictability in the industry which it affects• The law should promote respect for itself andbe enforceableN.B These sub-principles are always liable toconflict with each other, with the principle ofpersonal and economic liberty and with thedemocratic principle of majority decision-making:politicians may have to make choices

How Liberalising Gambling LawsTypically Get Made (1)• Government identifies something unsatisfactoryabout the present state of the law: illegalgambling; inadequately regulated gambling;money going offshore; “too much” gambling• Government identifies economic advantages tobe secured from liberalisation: gambling tourism;unresented taxes – gambling privilege taxes,licence fees, prescribed investment

How Liberalising Gambling LawsTypically Get Made (2)Governments identify obstacles to liberalisation:• Many people have moral and/or religious and orcultural/aesthetic objections to gambling andmost people have some misgivings• There are perceived dangers of excessive andcompulsive gambling• Gambling displaces spend on other activites andtherefore damages some existing businesses

Restricting the Availability ofGambling Opportunities• Governments always place some restrictions onthe availability of gambling opportunities toreduce the perceived risk of negative socialimpacts: there is never a free market• These restrictions (unaccompanied by priceregulation) make possible abnormal profits• Governments seek to capture these abnormalprofits by owning the gambling industries, havinghigh gambling privilege taxes, selling licencesfor large amounts of money, or harnessing thecreativity of the private sector to delivering highvalue public interest investments

Consequences for BusinessCommercial success depends in the gamblingbusiness on:• Getting government to allow you maximumfreedom to sell your services with the lowestcosts (incl taxes) and at optimum pricesProhibiting your competitors and potentialcompetitors from operating at all – usually on thegrounds that their business, unlike yours, isterrible for problem gambling

The Singapore Story (1)• Singapore managed the public debate superbly• Made substantial provision for preventingexcessive gambling amongst Singaporeans• Clearly identified its objectives, viz to promotetourism by harnessing the creativity of theprivate sector to the delivery of major tourismenhancinginfrastructure and to preventSingaporeans from gambling abroad• Setting a low tax rate• Running a process which is extremelytransparent and extremely tough

The Singapore Story (2)• There is tension between keeping gamblingspend onshore and preventing Singaporeansfrom gambling too much: if the $100 entry fee isan adequate deterrent Singaporeans willcontinue to gamble on the pleasure boats, atGenting etc. If not or it is circumvented,Singaporeans’ gambling problems will bebrought onshore and two casinos will not beenough• Regional competition may undermine thetourism market• The character of Singapore will change

The UK Story• Addressed problem gambling, remote gambling and establishmentof Gambling Commission quite successfully but failed dismally inintroduction of casino policy• Assumed their legislation would be uncontroversial• Assumed they could have a free market and still not have “toomuch” gambling• Failed to see the necessity for identifying potential public economicbenefits and decide the appropriate tax and other policies forsecuring them• Failed to manage the existing industry’s demand to be protectedfrom competition• Failed to reassure the public about the problem gambling issues,including telling them some problem gambling is the price offreedom – as it is with problem drinking and alcohol

Three Lessons for Europe• There will never be a free market in gambling serviceswhen we have a United States of Europe – unlimitedprize gambling machines will still not be permitted inschool playgrounds and old age homes• Harmonising gambling policy requires harmonising taxpolicy: nationalised monopoly gambling industries, highgambling privilege tax rates, high licence fees and highinvestment requirements are all ways of promoting andprotecting the public interest which from the point of viewof public morality are equally legitimate• All European countries have measures to protect againstproblem or excessive gambling but they have verydifferent ones relating to what forms of gambling arepermitted and what prohibited

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