REMARKS TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON THE SOUTH AFRICAN NATIONAL GAMBLING BILL William R.Eadington, Ph.D. Professor of Economics Director, Institute for the Study of Gambling and Commercial Gaming University of Nevada, Reno September 19, 2003

CREDENTIALS AND RELATED PROFESSIONAL BACKGROUND Founder and Director of the Institute of the Study of Gambling and Commercial Gaming, University of Nevada, Reno (1989 to present) Board Member, National Council on Problem Gambling (1983 to present) Vice President, Nevada Council on Problem Gambling (1997 to present) Board Member, Centre for the Study of Gambling, Salford University (U.K.; 1994 to present) Board Member, Australian Institute for Gambling Studies, Australian National University (1995 to present) Member, Academic Team on Policy Directions in South Africa (precursor to National Centre for Gambling Studies),

STRATEGIES FOR PROMOTING RESPONSIBLE GAMBLING There are two general approaches that can be taken: –Establishing constraints on operators and customers that inconvenience everyone to attempt to protect the relative few who are problematic or pathological gamblers, and –Identifying and isolating those who are problematic or pathological gamblers (P&PGs), and restricting their choices and freedoms in the context of permitted gambling

ILL-ADVISED EXAMPLES OF THE FIRST STRATEGY IN THE PROPOSED BILL Prohibiting discounts or complementary services to be offered by licensed gaming operators –For the majority of non P&PG customers, they are not allowed to be approached on commonly used marketing practices Limiting the hours of operation of licensed gaming facilities –No evidence this works at all => illegal operations Prohibitions of ATMs or other cash-dispensing machines in a gaming complex –One unintended consequence might be increased crime –No evidence this is going to mitigate costs of P&PG

OBSERVATIONS ON RESPONSIBLE GAMBLING POLICY Policies that are implemented for the specific purpose of mitigating the costs associated with problem and pathological gambling (P&PG) should indeed reduce such costs There is no or little evidence that any of the strategies put forward in the proposed Bill will actually reduce the costs associated with P&PG It is clear that many of the constraints suggested in the proposed Bill will have significant costs on established gaming operators and their customers, leading to, in some cases, closure of operations and loss of jobs

REASONABLE APPROACHES TO RESPONSIBLE GAMBLING POLICY Constraints placed on everyone to attempt to benefit the few P&PGs should be evidence based, not done just for the sake of “doing something” It is foolish to put such constraints into statute, because statute is very difficult to change, especially when later evidence suggests such change is called for Regulators should be given the responsibility to shape and monitor responsible gambling strategies based on the relative benefits derived, and costs incurred, with such measures

IDENTIFYING AND ISOLATING P&PGs This approach is consistent with the existing practice of self-exclusion practices Modern player monitoring technology can be expanded to set of systems that can effectively exclude certain players Regulators could establish systems of “gamblers’ licenses” that could be revoked by self-exclusion or for cause Such a system could provide the basis for monitoring and evaluating the benefits and costs of the second strategy

OTHER AREAS OF CONCERN The existing casino industry made substantial investments under the 1996 Act with an implicit understanding that the rules in place under that Act would apply to their projects Changing the formula for the number of casinos and the conditions under which casinos operate would violate that implied contract Government policies that are intended to attract investment for the purpose of job creation or economic development should not change the rules midstream –Implications are for other industries as well