Current Trends in the Gambling Industry - Assignment Example

Q1: Identify at least 3 stakeholders; discuss their primary issues and factors affecting their involvement in the gaming industry. Analyse cooperation strategies between these stakeholders which might result in mutual benefits. State governments State governments are involved as regulators, operators and beneficiaries of gambling taxes. This presents conflicting interests as the governments have to regulate the industry and yet support it at the same time. State governments have a responsibility to implement regulations and to supervise the gambling industry’s applications of the gambling regulations. There is always a conflict in the double role of governments as the regulatory authority over gambling and the collector of gambling revenue. There is pressure from the supply side in that the gambling industry fiercely protects its business interests, lobbies governments and campaigns to minimize regulatory limitation on gambling commerce. On the other hand, governments attempt to set restrictions for individuals who would like to gamble, smoke and drink, but at the same time need protection from gambling away all their money. Players Many people, Australians included, have accepted the unusual game of gambling. In the past, gamblers mostly used to be men because of the nature of the game, which was predominated by horse racing and playing cards. But recent changes such as the introduction of machines and use of lottery type gaming have changed the social setting of the game in that gambling now continually attracts the participation of women. Presently therefore, gambling attracts players from all levels of the society. Youths have particularly become interested as are the distributions of people across the ethnic divide. Communities Communities are associated with gambling two ways. First is that they can be recipients of the economic benefits of gambling such as employment, funding of projects, improved social amenities and so forth. Second, communities also bear the social costs associated with gambling such as problem gambling and crime. It can be noted that some problem gamblers resort to crime in order to support their habit, and this may lead to establishment of undesirable businesses. Cooperation strategies between the stakeholders Some state governments are continually capitalizing on gambling due to the game’s perceived benefits. For instance, gambling is effectively a national pastime in China, especially in Macao. The involvement of governments through licensing and operating some facilities attracts players – who become assured of government protection. Players also need protection from the government so that they do not gamble all their money away. The benefits that accrue from gambling such as taxes are used to improve public facilities such as health care and infrastructure for the benefit of communities. Gambling also directly provides employment to the community, and this strengthens the relationship between state governments, players, and the community. As the government regulates and supports the gambling industry, the community enjoys the gains such as employment and other improvements that come as a result of the activities of gambling operators. This cooperation ensures that the community is not subjected to the adverse consequences of gambling such as crime and problem gambling, which governments strive to shelve. Q2: Macao’s gambling revenue grew 40% to US$5.1 billion in 2004, and consequently is poised to become the major gambling enclave in the Asia Pacific region. Evaluate the opportunities and threats facing Australian casino’s resulting from the growth in gambling activity in Macao Opportunities The growth of Macao as major gambling destination presents a number of opportunities and threats to Australia’s gambling industry. The growth of the gambling industry in Macao can largely be attributed to the fact that the industry relies largely on tourists rather than local residents. This presents an opportunity for Australia to develop its industry in order to attract players from countries such as China, the United States and even Europe. The trend in Australia is that the gambling industry is mainly dominated by local players. There is therefore an opportunity to expand the industry to reach the international market. The fact that gambling is not so popular among the local residents of Macau means that they have not realised the benefits of the industry in as far as development is concerned. Australia needs to develop knowledge infrastructure and foster economic development and improvement in other facilities such as health care using the proceeds from the gambling industry. This can be achieved by increasing the popularity of the electronic gaming machines which are popularly known as poker machines or pokies to people both within Australia and in other countries. Threats Australia faces a number of challenges from the flourishing Macao gambling industry. Macao is considered a major destination only second to Las Vegas in terms of gambling. This means that Australia still has a lot to do to attract international players into her cities particularly for gambling. The major challenge lies in expansion, redevelopment, and installation of modern facilities to match those in Macau. Further, gambling operators based in Australia need to diversify their products and services to match the needs of the international market. Australia also needs to develop better leisure and recreational facilities for both local residents and tourists in order to enhance her gambling market potential. Importantly, Australia should tailor brand marketing to suit the needs of visitors with interest in gambling. Q3: What are the future trends and issues of the gambling industry in Australia with the steady growth of internet gambling? With the steady growth of internet gambling, the gambling industry in Australia is expected to experience mixed reactions. Focus shift from land based gambling to internet operators Land based gambling operators are likely to lose control of some share of their market as some consumers opt for internet gambling. Since internet gambling is not clearly regulated, there is likely to be unfair competition as internet gambling operators enjoy the benefits of being virtually everywhere unlike land based operators who operate from fixed stations. Increase in variety of gambling products with the introduction of the broadband cable The growth of internet gambling in Australia means that a wide range of gambling products are brought directly into the homes of consumers, thus increasing the popularity of internet gambling even more. One of the factors that will greatly promote this in Australia is the introduction of the broadband cable, which is expected to facilitate easy access to the internet. With this facility, internet gambling operators will be able to introduce online betting activities and thus compete in the international market. Increased competition – particularly favouring internet operators The growth of internet gambling also means that there is likely to be an expansion in the type of gambling services and products delivered by the new technology beyond what land based gambling operators have to offer. This is a challenge to land based operators to also offer innovative products, thus increasing competition and productivity. As more gambling services are offered, there is likely to be an increase in the rate of gambling, for instance, gambling operators are more likely to focus on services such as continuous lotteries and instant Keno. The incorporation of adult content in gambling products also raises the prospects of the gambling industry in Australia. Active role of government in regulating internet gambling Internet gambling has always been a regulatory responsibility of the Australian government. In fact, the Internet Gambling Act of 2001 makes it illegal for Australian residents to gamble domicile online gaming sites. Since there is an indication that internet gambling can be a larger revenue earner for the government, it is likely that the Australian government will be more proactive in the regulation and taxation of the industry. This is likely to foster competition in the gambling industry as a whole. Increase in adverse social impacts Internet gambling is likely to increase the adverse social impacts of gambling such as problem gambling. But it can be expected that with stiff regulations and taxation of internet gambling activities, the government is likely to rein in the industry and thus ensure that the adverse consequences associated with internet gambling are mitigated. Possibility of money laundering Even though to date no links have been identified between known money laundering syndicates within Australia and terrorist organisations, the possibilities for the use of money laundering methodologies such as gambling remain high. It is likely that terrorist networks in the region will explore such an option for financing their activities while avoiding the existing legislative controls. Gaming and gambling has been known to be one of the popular ways through which money is smuggled into Australia, and as the popularity of the industry increases, it is likely that money laundering cases will highly increase. Q4: Gaming Machines provide for the most popular form of gambling in Australia and most gamblers who develop gambling problems become addicted to gambling machines. Discuss the popularity of gambling machines AND detail how the development of these machines has contributed to problem gambling Gaming machines have become the most popular form of gambling for a number of reasons as highlighted below. Entertainment: Gambling using gaming machines has been recognised as favourite pastime activity of many people. Club managers therefore provide gaming machines to tap this opportunity. Challenge: Gamers see gaming machines as the opponents to beat. Players play to beat the odds, that is, records set by others using particular machines, therefore increasing the popularity of gaming machines. Escape: Gaming machines are perceived as a popular escape from the day to day challenges of work or other issues. People are tempted to use gaming machines as a way to relax and utilise their chances of winning free from the hassle of involving other people. Addiction: Addiction is one of the factors that motivate players to use gaming machines. Due to the enticing nature of the machines, players always feel the urge to use them time and again. Urge to win money: Gaming machines, especially electronic ones are known to attract players to play more and more in order to win. Availability: Gaming machines are easily available at casinos, licensed hotels and other recreational areas. This makes them popular among the patrons as a pastime and relaxation activity. How the development has led to problem gambling Problem gambling arises when the gambling activity causes harm to the players involved in gambling or to their family, friends, or community. One of the reasons why the development of gaming machines has led to problem gambling is that most gaming machines, especially the electronic ones are more addictive than other gambling activities. The reason for this is that they are easier to play and can be used in seclusion. This translates to more popularity, hence a higher likelihood of problem gambling. When people spend most of their time in clubs and casinos playing with gambling machines, they fail to attend to other important duties, such as their family upkeep. The economic implications of using gaming machines are higher because the player can play in seclusion and thus spend more. This may not occur when players get involved with their friends, who may advise them against overspending. Further, since electronic gaming machines may not involve the use of hard cash, players may not make out the consequences of their spending on their pockets. Moreover, when players spend so much of their time in seclusion with the gaming machines, this affects their interaction with their families, friends and community as a whole. Q5: Briefly outline the historical development of the casino sector in Australia. Explain how this development has responded to the socio-economic and political environment/ impacts of gambling industry (pros and cons) Expansion of the casino industry in Australia has increasingly followed the American approach, but the third wave differs in that there are new Australian casinos located in major cities, drawing patronage from local residents, not tourists as is the case in the United States. This has resulted into a condition in which particular casinos act as monopolies where they operate. For instance; Star City had exclusive rights for New South Wales until 2007, and Crown operates in a 150 km radius of Victoria. Advantages of the gambling industry With the casino setting in Australia, the government has intervened to ensure that benefits of the industry are enhanced while its negative impacts are mitigated. This it does by regulation to ensure that operators adhere to the casino policy and that adverse social impacts of the industry are minimised. State governments intervene because of the belief that casino development may spur economic growth and because they also need to eliminate the adverse impacts of the industry such as links with crime, problem gambling and so on. Australia has grown to be one of the first nations regulating gaming on the internet and this makes it one of the regions with high potential for future business growth as the idea protects casino gaming from unfair competition The presence of a high number of gaming machines presents an opportunity to reap the benefits of gambling. State governments in Australia generally agree on the broad objectives of gambling policy as maximizing revenue and minimizing social impacts while ensuring product integrity. Disadvantages Gambling in Australia increases the propensity of risks such as crime and problem gambling. There are also costs associated with the industry; for instance if a gambler wins A$ 20 after investing A$ 200 in the game, this has a significant impact on the player and others in the same situation. Problem gambling requires that interventions programmes such as counselling facilities be put in place to help the affected people. In addition, problem gamblers are likely to end up being bankrupt and do not actively participate actively in their daily job activities. Further, gambling is associated with many criminal activities, some of which are committed by problem gamblers as they seek for money to put in the game. Read More

The benefits that accrue from gambling such as taxes are used to improve public facilities such as health care and infrastructure for the benefit of communities. Gambling also directly provides employment to the community, and this strengthens the relationship between state governments, players, and the community. As the government regulates and supports the gambling industry, the community enjoys the gains such as employment and other improvements that come as a result of the activities of gambling operators.

This cooperation ensures that the community is not subjected to the adverse consequences of gambling such as crime and problem gambling, which governments strive to shelve. Q2: Macao’s gambling revenue grew 40% to US$5.1 billion in 2004, and consequently is poised to become the major gambling enclave in the Asia Pacific region. Evaluate the opportunities and threats facing Australian casino’s resulting from the growth in gambling activity in Macao Opportunities The growth of Macao as major gambling destination presents a number of opportunities and threats to Australia’s gambling industry.

The growth of the gambling industry in Macao can largely be attributed to the fact that the industry relies largely on tourists rather than local residents. This presents an opportunity for Australia to develop its industry in order to attract players from countries such as China, the United States and even Europe. The trend in Australia is that the gambling industry is mainly dominated by local players. There is therefore an opportunity to expand the industry to reach the international market.

The fact that gambling is not so popular among the local residents of Macau means that they have not realised the benefits of the industry in as far as development is concerned. Australia needs to develop knowledge infrastructure and foster economic development and improvement in other facilities such as health care using the proceeds from the gambling industry. This can be achieved by increasing the popularity of the electronic gaming machines which are popularly known as poker machines or pokies to people both within Australia and in other countries.

Threats Australia faces a number of challenges from the flourishing Macao gambling industry. Macao is considered a major destination only second to Las Vegas in terms of gambling. This means that Australia still has a lot to do to attract international players into her cities particularly for gambling. The major challenge lies in expansion, redevelopment, and installation of modern facilities to match those in Macau. Further, gambling operators based in Australia need to diversify their products and services to match the needs of the international market.

Australia also needs to develop better leisure and recreational facilities for both local residents and tourists in order to enhance her gambling market potential. Importantly, Australia should tailor brand marketing to suit the needs of visitors with interest in gambling. Q3: What are the future trends and issues of the gambling industry in Australia with the steady growth of internet gambling? With the steady growth of internet gambling, the gambling industry in Australia is expected to experience mixed reactions.

Focus shift from land based gambling to internet operators Land based gambling operators are likely to lose control of some share of their market as some consumers opt for internet gambling. Since internet gambling is not clearly regulated, there is likely to be unfair competition as internet gambling operators enjoy the benefits of being virtually everywhere unlike land based operators who operate from fixed stations. Increase in variety of gambling products with the introduction of the broadband cable The growth of internet gambling in Australia means that a wide range of gambling products are brought directly into the homes of consumers, thus increasing the popularity of internet gambling even more.

One of the factors that will greatly promote this in Australia is the introduction of the broadband cable, which is expected to facilitate easy access to the internet.

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