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CHAPTER SEVEN: CASINO-SPECIFIC FACTORS
7.1 Great care must be taken when drawing on the research evidence discussed in this report to consider the likely impacts of casino development in Scotland. To begin with, there are significant differences, in terms of cultural and political climate, between British and international casinos. In addition, significant variation between different types of casinos exists, as has been pointed out already in this report. Such factors mean that comparisons are not straightforward. More detailed consideration of these casino-specific issues is provided in the rest of this section.
Differences between British and International Casinos
7.2 British casinos have traditionally provided a very different kind of gambling experience to their counterparts in America, Australia, Canada, New Zealand and South Africa - in short, in every jurisdiction where the majority of research on casinos has been produced.
7.3 The current gambling climate in Britain was established by the 1968 Gambling Act, which effectively designated city-centre casinos as exclusive members-only clubs and limited the facilities within them. A membership requirement that meant individuals were only allowed entry after first applying for membership and then waiting first 48, later 24 hours for admittance; a semi-formal dress code and a generally patrician atmosphere meant that the venues were not attractive to large segments of the population.
7.4 Facilities offered within casinos were also limited by legislation restricting the number and types of games available, the provision of live entertainment and the consumption of alcohol (which was not allowed on the gaming floor). In addition, casinos were not allowed to advertise or promote their services in any way, and were not allowed to offer credit. Rules on numbers of machines meant that table games dominated the facilities offered in British casinos. It was only in 2005 that new legislation (which will be fully implemented in 2007), began to reduce these restrictions by increasing the number of jackpot machines allowed in casinos to 20 and abolishing the membership rule.
7.5 However, as a result of these restrictive policies, casinos have traditionally not been particularly popular in Britain, with only around 3% of the population visiting them (Sproston et al 2000). However, as the new legislation comes into effect, these numbers are likely to increase and it has been estimated that participation may reach around 10% (Pion Economics 2006).
7.6 In contrast, casinos elsewhere represent a far more commonplace form of leisure: in the U.S., around 27% of the population are regular visitors (Welte et al 2002). International casinos have traditionally been open to all, operating without dress codes and membership requirements and allowing free movement between drinking and gambling areas. In addition, they are dominated by electronic gambling machines, which account for around 70% of their turnover. These machines are particularly popular among women and, as was discussed in Chapter Five, have been associated with a 'feminisation' of problem gambling.
7.7 In addition, many casinos in America, Australia and Canada, are located in rural or 'site specific' settings, rather than urban ones which is typical of the British scene. Many Americans, Australians and Canadians expect and are willing to drive to casinos - or, indeed, to other forms of entertainment. In contrast, in Britain, which is more densely populated and where entertainment is more concentrated in urban venues, this 'culture of the car' is not as widespread, and public transport more commonly used in night-time leisure travel. In this sense, calculations about the effect of casinos in other countries that are based on a 50 mile / 30 minute drive zone may be less applicable in this country.
7.8 Not only this, the geographical location and resident demographic profile of many of the casinos which have been the focus of international research is quite different from the proposed Scottish casinos. In particular, many Canadian casinos are located in relatively rural communities, some of which are also tourist destinations for significant numbers of visitors, which is quite different to the situation in Scotland. For example, the broad area of the Central Belt, where the proposed casinos would be situated, is densely populated and also contains pockets of high deprivation.
7.9 Overall, it could be said that the culture of casino gambling has been quite different in Britain than elsewhere in the world. However, it is likely that this will change as the liberalisation of restrictions on casinos begins to attract greater numbers of younger and female players .
7.10 The quite considerable differences that exist between British and international casinos may mean that the findings from one do not map onto the other in straightforward ways. However, as the U.K. moves towards the model existing elsewhere international research is of increasing relevance.
Demographic Profile of Casino Gamblers
7.11 Discussions of gambling in general are often taken to include casino gambling. However, casino patrons have a slightly different demographic profile to other gamblers. The results from the British Prevalence survey show that casino gamblers have higher levels of income and education and are of a higher social class than other gamblers. Income was directly related to participation, with 7% of the highest income group playing table games, compared with only 1% in the lowest income group (Orford et al 2003). In fact, the survey found that casino gambling was the most popular form of gambling for individuals form the highest social class (professional occupations), and the least popular form for those from the lowest social class.
7.12 This is similar to the international evidence, which shows that casino gamblers are slightly better educated than other types and more likely to have white collar jobs. As mentioned in Chapter five, a survey of U.S. casinos found that a majority of patrons were also predominantly white, with similar percentages of males and females, and were slightly older than the general population, between 31-60 years old ( NORC 1999; Baxandall and Sacerdote 2005).
7.13 The 1996 British casino study, which had a much larger sample of patrons, did not find income to be a particularly significant factor in the demographic profile of players. However, it did find that regular casino players made up a slightly different demographic group to those who did not gamble regularly, and had much higher rates of problematic play. Those who visited at least once a week were more likely than the others to be male, aged over 40, retired from work and separated from their partners. They were also much more likely to be non-Caucasian: a highly significant finding was that problem players were three times more likely than non-problem players to be of Asian-Chinese ethnicity.
7.14 As we saw in Chapter Four, this study suggested that there were two distinct groups who experienced problems with casino gambling. One was this core of older, single, retired and frequently Chinese men who visited regularly. The other was a group of single, younger unemployed males, aged 30 or under, who visited less regularly, and whose primary gambling activities were outwith the casino.
7.15 International studies have found similar correlations between heavy playing, ethnicity and low income. For example, although lower income Americans gamble less often in casinos, when they do, they bet more heavily. A national survey found that individuals in the lowest quintile group gambled twice as heavily as those in the highest group in absolute terms (i.e. not just relative to income), as did blacks and Hispanics compared with whites (Welte et al 2002).
7.16 Although the British research does not make the type of gambling explicit, it is likely that the individuals in these studies primarily play table games, as until now, EGMs have been extremely sparse in British casinos. However, internationally, females are beginning to experience increasing problems with machine gambling. In addition, many of these problems are found with the machines in casinos (O'Neil 2006). It is likely that the increased numbers of machines in British casinos will also see a rise of females experiencing problems here.
'Locational Structure'
7.17 It has been pointed out already that casinos are not homogenous, but are distinguished by a range of factors, including, crucially size and geographical location, which can result in very different impacts.
7.18 Large resort casinos generally incorporate a range of leisure facilities such as restaurants, hotels and cinemas, as well as business and conference facilities, making them attractive destinations for tourists. In addition, they are often located in out-of-town areas, in 'site-specific' venues. In contrast, smaller casinos offer fewer facilities, with less potential for attracting tourists. These are often located in more urban or suburban environments, from where they draw a greater proportion of their customers.
7.19 People are generally more willing to travel to larger, resort-style casinos. A survey of visitors to U.S. casinos found that around 90% of visitors had travelled more than 50 miles to the largest casinos, and 57% to the smaller ones ( NORC 1999). Large casinos received around 15,000 visitors per day, smaller ones 5,000. Larger numbers of locals patronised the smaller venues. This clearly demonstrates that small casinos are patronised in greater numbers by locals, while larger ones attract more people from outwith the immediate area.
7.20 Bill Eadington has argued that the 'locational structure' of casinos is crucial in determining the ratio of overall social costs to economic benefits. He notes that the social costs of casinos tend to be exported to the areas where the gamblers who play them live, so that those which draw on large non-local markets tend to be associated with low social costs locally, and those which rely on locals as their primary customers are associated with high local social costs. Rural and destination, site specific casinos are therefore associated with the lowest social costs, since customers for those generally tend to come from beyond the casino's own jurisdiction. However, urban or suburban casinos tend to draw large numbers of local residents to them, and so social costs remain within the community, where the gambling facilities themselves are located. As he puts it
"Jurisdictions that are able to become net exporters of gambling services - by attracting a high proportion of their customers from outside the region - will be able to generate considerably greater incremental local economic benefits than those jurisdictions whose casinos cater predominantly to local clientele. In a similar fashion, casino markets that cater primarily to tourists or other nonresidents will experience less visible negative social and political impact than those whose customers are their neighbours" (Eadington 1999: 188).
7.21 However, Eadington also notes that there is also an extent to which they may simply retain locals who would have travelled outwith the region to gamble anyway. In this scenario, social costs are no higher, since those individuals would have still 'brought their problems back' to the local community, as it were, as well as leaving the profits in a neighbouring jurisdiction (Eadington 1993).
7.22 It should be noted, of course, that this does not mean that some casinos are less likely to generate negative social impacts, such as problem gambling, than others. It simply means that regional casinos are more likely to disperse such impacts beyond the immediate region in which the casino itself is located. Any related costs would be transferred elsewhere - beyond the local area, the region, or even perhaps the country.
Transfer Effects
7.23 There is very little research on the impacts of casinos in neighbouring jurisdictions. However, the little that does exist is ambiguous. When casinos opened in Iowa, nine of the twelve counties adjacent to them reported increased bankruptcies ( NGISC 1999). However, when problem gambling increased in Niagara after the opening of a casino, researchers found that problems remained within the city, and did not spread further throughout the province (Room et al 1999).
7.24 The size of a casino may be important here. If small casinos in urban areas are patronised by large numbers of locals, their impacts are likely to be concentrated and retained within the local area. However, larger casinos and/or casinos in rural areas which attract large numbers of visitors from non-local jurisdictions are likely to 'export' any negative impacts with their departing visitors.
7.25 Distance is also likely to be a factor. Most gamblers do not travel more than 50 miles to visit a casino. Of those who do, the casino tends not to be the main purpose of their visit. One of the few studies of casino patrons' travel behaviour found that individuals who travelled outwith their state to a neighbouring casino jurisdiction in the U.S. tended to be older, single people, whose casino visit was only an incidental part of a leisure trip (Hinch and Walker 2003). If this scenario were applicable to Scotland, it is unlikely that a casino development in England would attract many Scottish visitors who had travelled specifically to visit it.
Size and Games
7.26 In the current British context, issues of locational structure relate to the difference between regional, large and small casinos, which will provide quite different gambling environments. Regional casinos will be allowed up to 1250 Category A machines, offering unlimited prizes and accepting large stakes. It is not clear how many, or to what extent, the machine provision in these venues would be taken up by Fixed Odds Betting Terminals ( FOBTs), which are associated with high risks of problem gambling, although it is almost certain that they would be offered. These very large resort or 'destination' casinos provide a range of facilities such as restaurants, bars, cinemas, shopping and entertainment, which create an entire leisure experience of which gambling may be only one aspect. They will intend to attract the majority of customers from outwith the local population, and will especially target large numbers of tourists.
7.27 Large casinos will be permitted up to 150 Category B machines with maximum jackpots of £4,000, and small casinos will have up to 80 Category B machines. All three will be allowed to offer betting, and Regional and Large will be allowed to offer bingo. Regional casinos would expect around 4,000 - 5,000 visitors per day; large 1,500 - 2,000 and small around 500 (Pion Economics 2006).
7.28 As noted earlier, electronic gambling machines [ EGMs] are particularly associated with a range of risk factors for problem gambling, possessing high event frequency and opportunities for continual re-staking. A recent, unpublished survey by Mintel for the Association of British Bookmakers has revealed dramatic increases in the use of FOBTs by problem gamblers. The research examined patterns of gambling participation amongst betting shop visitors, and found that, between 2004 - 2005, the use of FOBTs among problem gamblers had escalated 12% to 40%. Given that FOBTs are likely to be introduced into casinos in the near future, this is a trend which should be watched closely (Europe Economics-Mintel 2006).
7.29 However, accessibility becomes an issue here, as the Australian experience of EGMs has shown. Among the major forms of gambling, gambling machines are frequently one of the most accessible, in that they can be widely dispersed in a range of locations which people may pass by in the course of their everyday activities.
7.30 Casinos can be the least accessible, in that many are situated in areas which individuals must travel to using some form of transport, whether in out of town locations (as is common internationally) or in urban centres (as is most often the case in the UK). The time and effort involved in making the series of decisions and transport arrangements that are required to actually to get to casinos tend to work against impulsive gambling. Although they typically have very large numbers of them, the machines that are located within these casinos are also, by definition, less accessible.
7.31 Many commentators have pointed to this relative lack of accessibility (compared with other forms of gambling) as a 'protective factor' working for casinos, meaning that they do not encourage impulsive gambling to the same extent as other, more accessible forms. At the same time, the Australian experience with EGMs that are located outwith casinos has been held up as an argument against convenience gambling.
7.32 While it is certainly true that the worst problem gambling is associated with machines which are widely dispersed throughout communities. However, this does not exonerate casinos, which are also associated with harms. The fact that widely dispersed machines pose the greatest risk does not mean that those in casinos pose no risk. Research clearly shows that these machines are associated with high rates of problem gambling wherever they are located, as are casino table games, which are unique to casinos themselves. Any potential 'trade off' between, on the one hand, large numbers of machines, and on the other, less accessible and relatively regulated locations, is likely to be complex and has not yet been adequately addressed by researchers.
7.33 To date, the best available evidence only shows that casinos located away from population centres are associated with the least negative social impacts relative to economic benefits for the surrounding area, and those in more densely populated urban areas, the highest ones.
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