© Copyright 2010, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I Nelson Rose, www.GamblingAndTheLaw.com
Jurisdictions vary wildly in the rules gaming operators are required to impose – on players.
The most common is a minimum age, and even this is not universal. Certainly, there is no agreement on when a person is old enough to make his or her own decision about gambling.
The legal fiction is that below a certain age, everyone is incompetent. Then, at the exact second of their 18th or 21st or whatever birthday, they become competent.
The legal term for this is an irrebutable presumption, at least when it comes to minors. An underage MIT card-counter cannot go to court and prove he is competent to play blackjack.
(The presumption is rebutable for everyone who has automatically become legally competent simply by being alive enough years, though the procedure for having an adult declared incompetent is difficult.)
Government draws an arbitrary line, because it would be too costly to hold hearings to decide each individual’s actual competence. A rule is created, which may protect a majority of the population, but harms a significant minority.
We know, for example, that many near-adults are completely competent, just as there are many people way past the age of majority who should never be allowed to place a bet.
Many jurisdictions put the burden on the online gaming operator to not only know the rules, but determine which of their players fall under that irrebutable presumption.
Some landbased jurisdictions go further, imposing strict liability: There casino operators are fined for letting a minor make a bet, even if the child had a false I.D. and looked much older than his or her actual age.
Governments regulating online operators seem more forgiving, fining sites for allowing underage players only if there were inadequate safeguards in place.
The other side of the age barrier, the adult declared legally incompetent, is so rare that it is not an issue. But the temporary incompetence of a patron, caused by excess drinking or drugs, is a growing legal and political problem for landbased operators.
Internet operators cannot see glassy eyes or smell liquor on their players’ breathe. But incompetence can be caused by internal psychological factors, that can be detected by anyone. A person who refuses to leave a slot machine, even to go to the bathroom, will be asked to leave. An Internet poker site that detects a player playing nonstop for 24 hours will conclude the player is a bot. But what if the online game is slots or roulette, and the player is losing?
Computer programs are becoming sophisticated enough that it is possible that regulators will start requiring online operators to recognize when a compulsive gambler has gone on tilt. Governments in Australia are already experimenting with programing slot machines to stop operating when they have detected an out-of-control problem gambler.
Governments have always acted to regulate participating in gambling, usually by making it illegal. But now that gambling is becoming legal virtually everywhere, legislators and regulators are toying with imposing restrictions on players, that have to be managed by operators.
The danger with this social engineering is that it is usually not being done by scientists, but rather by people with good intentions, but no actual knowledge.
In Pennsylvania, for example, there’s talk of resurrecting 2007’s House Bill 783, which would require casinos to send statements each month to reward-card patrons, telling them how much they had won, or lost, gambling. In 2008, more than 60 members of the legislature signed on as co-sponsors. This will probably help some borderline problem gamblers. But, think of the risks. I am sure that there will be increased domestic disputes, even violence, when wives and husbands open letters from casinos stating how much their spouses have lost gambling.
The law of unintended consequences should warn all policy-makers to think through what else might happen if a player protection is created.
Governments are experimenting with gaming devices that tell players how much money they have lost and how long they have been playing. Will players bet less? The government of Nova Scotia conducted a study, which indicates this does work. But the study was done, in part, because there were reports that the same machines in Australia actually increased the amounts some players wagered, in attempts to break even.
Machines of all types are being modified in the name of responsible gaming. ATMs are being removed from casino floors, VLTs are being slowed down, and Internet gaming sites are allowing players to set daily loss limits.
Even Nevada has decided that some devices are too enticing. In 1988 and 1989, Universal was ordered to retrofit 11,000 slot machines programmed to show near-miss jackpots on the payline. Regulators ruled that it was O.K. to have lots of winning symbols artificially bunched to appear above and below the payline. But players were being misled if the machine was programmed to show a winning symbol or two on the payline, when there should be only blanks.
Of course, all gambling requires near-misses. In fact, even after the Universal decision, Nevada regulators allow slot machines to have many jackpot symbols on the first two reels, and only one on the third reel, of a three-reel machine.
The distinction may make sense, at least with entirely mechanical slot machines. The theory is that a player could tell the true odds, by playing enough games. Of course, in this day of electro-mechanical or pure video gaming devices, it would probably take more than a lifetime to see all the combinations, particularly in a game with a separate bonus game, such as “Wheel of Fortune.”
But it is the job of regulators to draw lines, and they decided in Nevada that it was simply going too far to allow slot machines to show symbols on the payline that were not truly random. Players had to be protected from games that seemed more winnable than they actually were.
Lawmakers often dabble in social engineering when they are first discussing legalizing gambling. But this makes counter-productive restrictions the most difficult to change, because they are in statutes. It took years to eliminate the mandatory early morning closings of casinos in Atlantic City, the $500 loss limit in Missouri, and the four-hour cruises in Iowa, even when both operators and regulators called for changes.
Why would government agencies ask that player-protections be lifted? Because they did not work.
Closing casinos at 4:00 am weekdays, 6:00 am weekends, might have prevented Atlantic City patrons who had too little sleep, and too much to drink, from gambling. But it didn’t stop them from getting behind the wheel, and all at the same time.
Missouri’s $500 loss limit was almost impossible to enforce. In fact, it created a black market in gaming chips, with big losers willing to pay almost anything to buy chips from other players to remain in action.
My personal favorite “player-protection” was the four-hour cruise. I saw players split 10s at blackjack when they were told it was the last hand, just to get the most action. And whose idea was it that the best way to handle a compulsive gambler was to lock him in a riverboat casino for four hours, even when the boat was docked?
Internationally, the goal of most governments in the past was to import money won from foreigners, and export social problems.
Casinos often excluded local residents, requiring patrons to show their passports at the door. I played in casinos in Communist Hungary with West German deutsche marks, because the government wanted to squeeze this hard currency out of the underground economy and discourage all but the richest locals from gambling. Even dress codes acted as an efficient barrier to limit play to foreigners.
Internet gambling can be the ultimate border-town gaming operation. An extremely small jurisdiction can import players from everywhere in the world, and might even bar its own residents, to make sure the social problems fall elsewhere.
With the spread of casinos open to local residents, governments had to begin worrying about protecting their own citizens from gambling unwisely and too much.
One of the most restrictive regimes began in England in 1968. New casinos could only be opened if the proposed operator proved there was unmet demand. They were operated as private clubs; players had to register in person 48 hours in advance, before they were allowed to make a single bet. Casinos could have only two — literally two — slot machines.
Casinos could not advertise, or extend credit. They could take checks, and they were required to process them through the patrons’ banks, even if the player won enough to redeem them. This was done with the express purpose of embarrassing players for writing lots of checks made out to casinos, as if bankers read their customers’ checks.
The regulations went so far as to prevent players from making bets that the government thought was unwise. In London I was told I could only double down at blackjack if my first two cards totaled ten or eleven, even though, as an amateur card-counter, I knew there were times to double down on other hands, like soft 17.
The People’s Republic of China has gone the furthest in imposing regulations on casino patrons. The casinos of Southeast Asia are probably the only operators in the world whose fortunes depend more on the restrictions imposed on their customers than on regulations from their own governments.
The PRC changed its rules in 2003, allowing mainlanders to travel to Macau without having to be part of a group. The first western-owned casino, the Sands Macau, opened in 2004, and took only eight months to recover its $260 million cost.
But, in 2007, residents of Guandong, the province bordering Macau, were suddenly limited to one visit every three months. The impact was immediate, on the 250,000 people who were crossing the Zhuhai-Macau border every day, and on the casinos. I was teaching Gaming Law at the University of Macau and had a student who lost her job: She had been in charge of a casino’s frequent visitor program.
No one knows exactly why the PRC is continuously changing its visa requirements for visits to Macau. It may be that, having allowed mainlanders to easily gamble in Macau, the Beijing government is embarrassed by reports of increased embezzling by government officials.
Of course, the strict rules the PRC imposes on its citizens’ gambling will only work so long as Internet access is restricted. Once residents can easily make bets online, it won’t matter what type of rules China tries to impose on players to protect gamblers from themselves.
© Copyright 2010. Professor I Nelson Rose is recognized as one of the world’s leading experts on gambling law, and is a consultant and expert witness for governments and industry. His latest books, Internet Gaming Law (1st and 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials, are available through his website, www.GamblingAndTheLaw.com.