The Rise of Casino Gaming: A Historical and Ethical Perspective

---

Casinos were classified as a Class III type of gambling by the National Gaming Commission which enabled state governments to have a say in the operations and the implementation of casinos on Indian preservations. This made it difficult for Native Americans to go forth with building casinos in their given areas. As of lately there has been an emergence of commercial casinos throughout the United States which are built on non-Indian reservations. Currently there are 22 states that contain commercial casinos that rival the Indian regulated casinos American Gaming Association.

This industry has seen a lot of growth over the years, and with the push from Governor Cuomo, New York will soon be added to the list of states that will offer commercial casinos Robinson, A gambling addiction is a very serious illness which has caused many individuals to lose their jobs, homes, and even loved ones over their inability to cope with this disease.

There was a problem providing the content you requested

Even though gambling addictions have not received as much attention from the media as the tobacco and the alcohol industries, gambling addictions may instigate the abuse of these two substances. This was the same scenario that Arelia Margarita Taveras found herself in. In , Taveras sued six of the New Jersey casinos for 20 million dollar racketeering charges Msnbc. In a short span which resulted in sleep and food deprivation, she managed to lose nearly 1 million dollars of money that she did not have. Her gambling addiction forced her to dip into her personal business accounts which her illegal actions forced her to face jail time.

It creeps up on you, the impulse. Even though there is no concrete evidence that pinpoints gambling as the predominant reason behind the increased crime rate in newly developed casino locations, many studies that have examined casino locations conclude that there is a direct correlation between these two types of behaviors. The reason why many people have a hard time associating gambling with an increase in crime is that there is lag period as to when this spike in crime tends to occur, allowing people to speculate that there must a be another factor causing this rise in crime.

As seen in Exhibit 1 , crime tends to decrease in number after a casino has been opened, but once several lag periods have followed, the crime rate skyrockets to numbers higher than pre-casino opening. Of the top ten cities with the highest poverty rates, six of the cities have access to a nearby casino in the area Exhibits 2 and 3. Casinos often times are viewed as a short term fix to the economic problems of a city by offering quick and direct benefits much like stated by governor Cuomo, while the disadvantages tend to present themselves later on.

Amid all the ethical dilemmas that haunt this industry casinos offer benefits that are very hard to resist, which range from increased employment opportunities to additional tax revenues for state use.

Casinos present clear economic benefits, but the opposition is still fierce, arguing that the wrong people are reeling in the profits attained from the casinos. This issue boggles the minds of the general public, but in essence it is a byproduct of the capitalistic system that is in place in United States much like the destruction of local business by casinos. Big changes to the American business system would need to occur to help solve these two problems as it would fall on the shoulders of the federal government to establish new regulations.

The gambling industry is simply one of the many on the long list of participants in this capitalistic approach. Even though many view casinos as destroying local businesses in a sense the casinos are destroying each other. Casinos face fierce competition amongst each other, as the construction of more state-owned casinos put a heavy financial dent on the Native American owned casinos.

As the war to reel in gamblers continues on, the benefits remain clear as nearly one million people are directly and indirectly influenced by the gaming industry Exhibit 4. Even though the hourly wage is still considered very small in comparison to the salaries earned by casino CEOs, the jobs offered in casinos require very little experience or skill thus offering such high salaries to untrained individuals provides opportunity for many non-college graudates.

It is not the salary that has many current casino employees worried, but the fact that in the next four to six years they might have to reapply for their jobs all over again according to Revel Casino Jacobs, This is intended to eliminate some of the current older personnel who are not capable of performing as some of their counterparts and to encourage casino employees to move up the ranks as management staff is exempt from this shifty strategy.

There seems to be a simple solution, continue doing a good job and you are safe.

Business of addiction: How the games industry is learning from casinos

The biggest appeal of casinos is the revenue attained by the local government in the form of taxes. The tax revenue attained from these casinos helps to fund some of the local initiatives such as: While certain schools are skeptical of ever receiving casino tax benefits in the long run, other schools view the funds received from casinos as their primarily lifeline. A few schools in St. Louis might be forced to cut jobs or resort to other means of saving on money if this tax lifeline was ever cut off as casinos constantly try to reduce their tax charges Piper, There is no doubt that many organizations benefit economically from the revenue allocated from taxing casinos, but an increase in casino taxes would help to highlight the importance of casinos to the American public from all their benefits to local communities.

The ethical issues that have hindered the gambling industry propose the question if the world would be better off without it? When gambling is implemented in an areas, it increases the number of individuals who attend gambling anonymous clubs, which further supports that casinos help to create and further propagate gambling addictions. The least advantaged members of society constitute the population of individuals who live below the poverty line, and as mentioned earlier casinos are built in cities that use them to address their financial problems.

If the losses that occur in casinos come at the expense of a few individuals, and the poor benefit by attaining jobs and financial relief then Rawls would not have a problem with the institution of gambling. Even the issue of increased crime in casinos areas can be viewed as a way of distributing money to the least advantaged members of the society. Many opponents of gambling argue that it takes advantage of those individuals with a gambling problem, as a sizeable portion of revenue comes from the losses of the addicts.

But what Robert Nozick would be interested is in how the casinos come about attaining their revenue and could their actions be viewed as justifiable? Moreover, the lack of progress on casino legalization in Japan has shifted the North Asia focus and capital allocation to Korea [ 8 ]. As a result, the number of Chinese gamblers visiting Korean casinos surpassed that of Japanese high-rollers for the first time in [ 25 ]. Henderson [ 26 ] argued that casinos in the twenty-first century are regarded as a core element of multifaceted leisure environments capable of drawing international visitors.

McCartney [ 4 ] stated that the main direction for future Asian casino markets is integrated casino resort development because the integrated casino resort can present the casino in a more sustainable format to government and local communities. In response, the Korean government proposed developing a new integrated casino resort in Yeongjong Island, which is within walking distance of the Incheon International Airport and can be reached in three to five minutes by shuttle or by the maglev train from the airport.

The Incheon International Airport is one of the largest and busiest airports in the world and serves as the main hub for international air transportation and cargo traffic in Asia [ 27 ]. The integrated casino resort can also be reached in a one-hour drive from Seoul, the capital city of South Korea, as well as by one to two-hour flights from many cities in China and Japan and a four-hour flight from all the major cities of Northeast Asia.

Figure 1 presents the map of the flight routes of Incheon International Airport. Because the goal of this paper is to understand the perceptions of Korean government representatives regarding the integrated casino resort, we employed in-depth interviews to obtain a wealth of information and insight into the phenomenon. We approached thirty Korean government officers and industry professionals and were able to interview nine participants including six government officers who were involved in the integrated casino resort project and three casino industry professionals.

Previous research suggested that the number of respondents is not a major consideration in qualitative research [ 28 ] because qualitative research methods are often concerned with garnering an in-depth understanding of a phenomenon, creating categories from the data, and analyzing relationships between categories [ 29 ]. Therefore, even a small sample is justifiable in qualitative research because generalization in a statistical sense is not a goal of qualitative research [ 28 ]. Creswell [ 30 ] also recommended that up to 10 people would be an ideal number for a qualitative phenomenological study to find patterns.

The first group of participants was three individuals from the Korean Ministry of Culture and Tourism. This organization has the authority to control the entire casino industry in Korea, including granting a casino business license. The second group of participants included three local government officers from the City of Incheon, where the new integrated resort is located. The third group of participants was composed of three members of the Korean Casino Association to gain opinions from a non-governmental perspective. All government representatives were senior managers and had over ten years of work experience in the field.

These individuals cannot be identified, as we promised confidentiality. To ensure the anonymity of each group, separate interviews for each group were scheduled for three different periods. The interviews were conducted via Skyp e messenger between February and April The interviews were recorded using Gom Player, a computer video recording program.

Interview questions were developed based on the literature review. However, a lack of sufficient amount of research on Korean integrated casino led to designing more open-ended question for the interview. The average interview was approximately one to one and a half hours. We followed coding procedures suggested by Creswell [ 30 ] and Carcia [ 31 ], including 1 storing and organizing information into files converted from word processing programs, 2 searching for themes from all the stored documents, and 3 attaining cumulative knowledge to find categories and subcategories.

Data were analyzed using NVivo10 qualitative analysis software. The interview texts were entered into NVivo10 and similar words and phrases were grouped into respective themes. The two separate results were, then, compared to ensure similarities. As the next step, we analyzed transcripts once again to access the fit of each category to the data and to relate those categories and subcategories to their conditions, consequences, and interactions [ 32 ].

Finally, these categories and subcategories were refined once again, and findings were identified. Because this research involved interviewing non-English speakers, the study instruments were created in English and then translated into Korean. To establish face validity, the interview questions were reviewed and refined by the Hospitality Research Center at Anyang University in Korea.

The original interview texts recorded in Korean were translated into English by a professional translator. The translated texts were reviewed by a hospitality faculty to confirm the translation was adequate and appropriate. After data analysis, the same Hospitality Research Center reviewed the interview transcripts to determine whether the identified categories and subcategories fit the data and the interpretations were trustworthy. The research center agreed with the findings and interpretations. Analysis of the data enabled us to develop three categories, six themes, and subthemes and contexts.

The three categories include 1 perceptions of the integrated casino resort in Korea, 2 factors contributed to award a casino license, and 3 government regulatory policies. Table 2 presents a summary of the categories and main themes identified from the data analysis. All participants said that the integrated casino resort plan in Korea made sense as evidenced by the exceptional success of Macau and Singapore.

They believed that this integrated casino resort would be the next gaming venue in Asia Table 3. Specific comments are as follows:. As we can see in Las Vegas and other parts of the world, the industry trend is integrated casino resort. These destinations not only followed the traditional way of gambling operations but also developed a unique way of attracting international visitors by offering various non-gaming amenities.

Incheon has a great potential to grow as an international tourist destination and will be a next Las Vegas type of gaming venue in Asia. While Macau can be a great place to gamble, it is overly depending on gaming. The gaming alone cannot attract a lot of visitors. Since this integrated casino resort benchmarked the successful examples of other countries, it would work very well and has competitiveness of being a gaming and entertainment landmark in Asia.

Other factors contributing to the success of the integrated casino resort plan include a good location and the well-established infrastructure the city of Incheon offers. A specific comment on this is as follows:.

Particularly, considering the locational benefits that Incheon international airport provides including the size of transportation and number of visitors, it is an ideal place for foreign investors. The government representatives mentioned that the government paid particular attention to the Debt Ratio and Debt to Equity Ratio when they reviewed the bid applications. This is because the government wanted to avoid any possible risks associated with working with foreign capital, particularly with national tourism development projects such as the integrated casino resort.

Specific comments on this theme are summarized in Table 4. The third theme related to the importance of business ethics in Korea. The Korean government has applied even stricter business ethics standards to foreign investors due to the negative public perceptions of gambling as well as unpleasant experiences with foreign investors in the past. Therefore, the trustworthiness of the participating companies was one of the most important factors in Korea because the government considered foreign investment companies as a partner conducting business with the Korean government.

Specific comments are presented in Table 5. Several important factors contributed to a business license decision, which included a viable investment project, a viable long-term business plan, and a plan for reinvesting capital gains to the local community. Specific comments are summarized in Table 6. The fifth theme involved government policy and regulation changes, which provide a better business opportunity for foreign investors. The Korean government recently has changed a casino business-related law from posterior judgment to prequalification.

In the past, a company had to build a casino first and then apply for a business license. Under the current law, a company can apply and obtain a business license before building a casino, which reduces the risk of conducting casino business, including the current integrated casino resort.

The creation of ‘Free to Play’ addictive games

However, a government representative raised a concern regarding the new law that. For example, a foreign investor might file a bankruptcy on purpose if the economic condition or the business competition gets severer. Or a local investor might participate in the bid with a fake paper company for the purpose of money laundering.

Addictive 'free to play' games

The participants also commented that the government has committed to continue to invest in and support the tourism industry. Table 7 provides the summary of specific comments. The sixth theme related to the public perception toward casino gaming and its impact on government policy. The participants expressed their concerns about negative public perceptions toward casino gaming.

These perceptions impact the government policies and regulations. The respondents commented that for the industry to grow, the industry needs to change negative public perceptions. The summary of comments is presented in Table 8. The results of this study identified three categories and six main themes.

The three categories include perceptions of integrated casino resorts in Korea, factors contributing to awarding a casino license, and government regulatory policies. The projection of a massive growth of Chinese tourists to Korea indicates that Chinese visitors will play a critical role in the success of the integrated casino resort. The increased regulatory scrutiny from the Chinese government provides even greater opportunity for the integrated casino resort to cater to the Chinese high rollers who currently prefer to stay away from Macau.

However, one issue relating to the target market seems to be a heavy reliance on Chinese visitors. While it is important to focus on Chinese high rollers and Chinese visitors, the long-term viability of enticing a diversity of visitors from other Asian nations is critical. It is also important to have a contingency plan responding to uncertainties involved with the Chinese government due to possible political conflicts between two nations.

Such incidents actually happened recently when the Chinese government banned travel agencies from selling group tours to Korea in protest of Korea allowing a US missile defense system. As a result, the Korean tourism industry has suffered a great depression [ 33 ]. Another important issue is increasing regional competition. While integrated casino resorts in Macau and Singapore have continued to evolve, Japan is in the process of developing legislation to create a market structure for integrated casino resorts.

If fully developed, integrated casino resorts will be introduced in six regions, and Japan will have the potential to be one of the largest gaming markets in the world [ 34 ]. To remain competitive and sustainable from the increasing regional competition, the integrated casino resort in Korea must develop competitive products and promotional strategies.

One possible strategy would be using the popularity of Korean pop-culture in its promotions and offering products that are superior in terms of amenities, prices, gaming choices, and the image of honest games of chance. The findings of the second category pertained to how the Korean government regulates its business licensing decisions. Swafford [ 35 ] found that a respectable reputation, tourism catalyst, partnerships, capability for economic development, and social issues were the five main factors the Singapore government considered important when making a business license decision.

The findings of the current study indicate that while the Korean government weighed these factors as important, the Korean government seemed to put more weight on the financial integrity and health of foreign investors and high ethical business standards. Perhaps these two factors are considered important because the Korean government has experienced several unpleasant fraud schemes involving foreign investors.

Since then, the government has tried to avoid any possible risks associated with working with foreign capital, particularly with national development projects such as the integrated casino resort. The findings indicate that satisfying all the bidding requirements is necessary but does not seem to be sufficient to obtain a business license in Korea. It is equally important to understand the unique political, social, and cultural knowledge of the host country to enter the gaming market in Korea. Such a partnership allows companies to gain a competitive advantage by sharing resources as well as better understanding the local culture, the industry, and the political circumstances.

To provide better business opportunities for foreign investors, the Korean government recently changed a casino related law from posterior judgment to prequalification. This change reduces the risk of conducting a casino business, including the current integrated casino resort. However, the participants expressed their concerns about negative public perceptions toward casino gaming.

The current study found several reasons relating to the negative public perceptions. Casino gaming is illegal in Korea, so the majority of Koreans are not exposed to casino games. Therefore, Koreans do not regard casino gaming as entertainment activities; instead, they think of its association with social problems.

While the Korean casino industry has made greater effort to minimize such negative perceptions of gambling, there has not been much improvement. The industry professionals felt the industry needs support from the government as the industry plays a key role in destination promotion and economic development, but they noted that the government policies and regulations have not improved much.

The business of addiction: how the video gaming industry has learned from casinos

As a respondent stated, it might take some time to change the negative perception of gambling in Korea, yet continued efforts in changing the public perception and attitude are necessary. Vong [ 36 ] indicated that without public support, it will be difficult for policymakers and casino operators to push through reforms and policies for further growth of the casino industry. Such efforts can help to mitigate the negative perceptions of casinos through reinvesting operating profits into the local community.

The Global Market Advisors [ 37 ] confirm that the impacts of casino gambling are not a passive phenomenon and can be significantly modified by the government and industry practices [ 38 ]. The analysis identified three categories and six main themes. The three categories include perceptions of the integrated casino resort, factors that contributed to awarding a casino license, and government regulatory policies. The study found that the government representatives and industry professionals viewed the integrated casino development as a great venture with great market potential due to its ideal location, welldeveloped infrastructure, and an increased volume of Chinese tourists to Korea.

However, negative public perception toward the casino industry remains as a challenge. We conducted this study focusing on the perspectives of six government representatives and three industry professionals. Therefore, the perceptions and opinions of these respondents might not be directly linked to the decision the Korean government made. Therefore, the findings of this study must be interpreted with caution. Second, this study is limited to understanding the perceptions and opinions of several government representatives and the industry professionals through using qualitative inquiry.

The government decision-making process can change depending on the composition of the decision makers, public opinions, investment proposals, and development plans. Perspectives from the Government Representatives and Industry Professionals. J Tourism Hospit 7: This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Select your language of interest to view the total content in your interested language.

Guidelines Upcoming Special Issues. Aug 29, Abstract This study explored perceptions of the integrated casino resort development in Korea and factors associated with a business license decision from the perspectives of the government representatives and industry professionals.

A brief overview of the Korean casino industry Since the legalization of casino gambling to foreign visitors in , the Korean casino industry has grown steadily under the strict government regulations. The map of flight routes of Incheon International Airport.

• Quran: Oxford Bibliographies Online Research Guide (Oxford Bibliographies Online Research Guides)
• Jessicas First Prayer (Illustrated)
• The Rockett Review: Then and Now
• Sir Cyril Black
• Praying Your Way to Breakthrough: Back to Basics
• Taken at the Flood V1
• Bronco of 96