Category Archives: Social Costs

Bipartisan Legislation filed to Address Military Gambling Issues

Casino Watch Focus has reported on past efforts to pass provide support to those in the military who experience gambling addiction, sometimes at military ran gambling facilities. Most recently, the Trump Administration pushed a directive to add gambling addiction screenings for military personnel in hopes of identifying and treating those in need. The new provision added to the National Defense Authorization Act carried out the screenings during the medical evaluation phase, but some believe even more can be done. Bipartisan legislation is being introduced by Senators Elizabeth Warren (D) and Steve Daines (R) that seeks to address the issue further and it has the support of the National Council on Problem Gambling. An online source reports:

The *National Council on Problem Gambling*(NCPG), the national organization for people and their families who are affected by problem gambling and gambling addiction, has welcomed the reintroduction of the bipartisan Gambling Addiction Prevention (GAP) Act of 2019 by *Senators Elizabeth Warren*and *Steve Daines*. The GAP Act, drawn up to protect members of the military, is complemented by companion legislation introduced in the House by Representative *Susie Lee*.

*Keith Whyte*, Executive Director of NCPG, commented: “I applaud Senators Daines and Warren and Representative Lee for taking the lead on the GAP Act to address problem gambling in the military. NCPG believes there exists an ethical and economic obligation to protect our troops by preventing gambling addiction.

“Problem gambling is a critical issue that is far too often overlooked. Research reveals that problem gambling uniquely impacts the military. For example, an estimated 56,000 service members meet the criteria for problem gambling, while military members lost $100m on 3,000 slot machines at overseas bases in 2018 alone. Clearly, the Department of Defense holds an even higher obligation to address problem gambling because of the windfall profits they make from gambling.”

Gambling addiction and gambling related problems can pose unique risks to those who serve in the military to go beyond the typical gambling related problems civilians’ experience. Military Times explains:

Warren said the move is designed “to honor the sacrifices service members and veterans make for our country” by helping individuals “get the treatment they need.”

Troops and veterans with significant gambling debts could face difficulties gaining or maintaining security clearances, due to fears that their financial situation leaves them more susceptible to blackmail.

Studies have found gambling addition is connected to a higher risk of suicide attempts, behavioral disorders, and other health concerns.

Complicating the issue are nearly 3,000 slot machines still in operation at overseas military bases, which bring in millions in revenue each year for military morale and recreation programs.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION

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EA Tries to label Gambling-esques Loot Boxes as ‘Surprise Mechanics’ During UK Parliamentary Investigation

Casino Watch Focus has reported on the ongoing studies and investigations into the latest predatory gaming mechanics known as loot boxes. These are digital boxes that can be purchase with real money in video games and they contain random loot that can be used in game. In some cases these are vary rare items that have value in game. Most of the time, however, they are essentially useless items and kids or other gamers are encouraged to buy another box to get the good prize. It’s effectively a slot machine, along with all the psychological bells and whistles designed to get the player to keep paying to open more boxes.

In some cases, these items have enough value that they can be cashed out or soldmaking them exactly like a slot machine. As a result, they have been investigated and studied vigorously over the past year or so and even when some conclude they aren’t outright gambling, almost all conclude they are predatory, addictive, aimed at exploiting children and some have concluded that they lead to problem gambling & gambling addiction.  

Most recently, the UK Parliament’s Digital Culture, Media, and Sports Committee conducted an investigation and they heavily questioned EA, the company most famously known for its loot box controversies involving key games like Star Wars Battlefield II and FIFA. During the testimony, they attempted to rebrand loot boxes and tried to compare this highly sophisticated and psychologically trapping mechanic to surprise toys, like Kinder Eggs, that you can buy in the store. Screen Rate explains:

Kerry Hopkins, EA’s VP of legal and government affairs, went on record during an oral evidence session with the UK Parliament’s Digital Culture, Media, and Sport Committee as saying that the company doesn’t view its microtransactions as loot boxes, but rather as “surprise mechanics.”

It’s a frankly shocking and blatant disregard of much of the research that has gone into the problem of loot boxes, with Hopkins also likening EA’s loot boxes to “Kinder Eggs, or Hatchimals.” The difference? The latter two haven’t been correlated with gambling addiction in research studies, whereas loot boxes have, even if many more studies need to be done to conclusively link the two. EA’s attempted rebranding of loot boxes in the face of anti-loot box stances in the Netherlands, Belgium, and now in the United States is a clear appeal to keep the practice in place in the face of growing hostility.

With EA, it can be hard to separate the fact from fiction, but in this instance, it’s not difficult at all: loot boxes are loot boxes, not “surprise mechanics.” That the publisher is even attempting to assert they’re anything but what they are is an insult to consumer intelligence everywhere, and shows a blatant disregard for ethical concerns, instead prioritizing money.

This level of false equivocation is beyond concerning. EA pushed back against the Belgian Gaming Commission when it concluded their FIFA loot box cards clearly constituted unregulated gambling. Ultimately, they did remove them from the game in that specific country, but they really don’t see a difference in their gambling mechanic and Hatchimals. Video Game YouTuber YongYea, in a rather spirited, yet extraordinarily well reasoned video, properly outlines why this a dangerous false equivocation:

The only similarity between loot boxes and Kinder Eggs is that both involve opening some kind of container to reveal a random reward. But video game loot boxes go layers deeper than that. First of all, unlike Kinder Eggs, video games usually charge an entry fee, normally $60 for the standard edition. With Kinder Eggs there is no entry fee. You buy one or a couple, you get whatever toy inside and that’s that.

Most of the rewards you get out of loot boxes will be completely useless, with a small chance of getting something truly coveted, and that is by design. [B]ecause loot boxes are digital in nature, its parameters can be controlled and adjusted to the developer’s and publisher’s whim at their convenience. We often see games that tweak the odds post-launch, that introduce new roadblocks, add new coveted items that are easier to get or new modes that are easier to overcome by paying, rather than playing.

Then there is also the fact that with Kinder Eggs, opening a container for the little toy inside [is] pretty much the whole game. There’s not much else to it than that. The entire purpose of Kinder Eggs is to get that toy and maybe collect them. In-game loot boxes, on the other hand, act as this sub system that holds a lot of influence over the game itself. Loot boxes often tend to be implemented in such a way that you pretty much have to buy them in order to access the best possible experience for the game you purchased or downloaded. They essentially act as slot machine tollbooths for the product you already bought. Games will often implement intentional issues and roadblocks so that you will have to pay to mitigate them through the purchase of these randomized rewards.

I should also point out that when you open a Kinder Egg, there are no flashy animations or sound effects that are strictly designed to release these chemicals in your brain that give you that addictive sense of anticipation. With loot boxes, on the other hand, every time you open one you’re presented with this spectacle that is not too dissimilar to what you’ll find in casinos, slot machines specifically. That’s because slot machines and loot boxes are designed with the same purpose in mind, to keep those who are psychologically susceptible to gambling addiction and addictive tendencies coming back so they can be milked dry. This is regardless of their mental or financial health. That’s not a priority for these casinos and companies like EA.

Casinos at least have some kind of system where they keep kids away and what have you. The gaming industry, on the other hand, doesn’t seem to [care] about kids whose minds are still developing, who are more susceptible to addiction than adults are. The gaming industry certainly doesn’t care about susceptible adults or implementing monetization schemes responsibly.

The gaming industry cannot even uphold something as simple as an age restriction. As per the ESRB, on their website you can see that any game with real-life gambling must be considered an adult’s only game. Of course, this classification will prevent that game from being sold on most major platforms. But because loot boxes make them so much money, they’re trying to pretend like loot boxes aren’t gambling. That’s how they get around this and now companies like EA are going as far claiming loot boxes aren’t even loot boxes, but rather surprise mechanics. No EA, Kinder Eggs and loot boxes don’t come anywhere close to being the same thing. That’s like saying getting shot with a BB gun is pretty much the same as getting shot with sniper riffle because both involve pulling a trigger that ejects a projectile. This is false equivocation at its finest and this is a classic move from EA and other major publishers.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION

 


UPDATE: Seminole Tribe Ends Payments to Florida After Failed Compact Negotiations: Special Legislative Session Talks Begin

Casino Watch Focus has reported on the recent news that the Florida legislative session would end with no gambling deal in place. The failure to renegotiate a deal has been an ongoing issue. At the core of the problem is that the Seminoles have exclusive rights to table games and certain gambling. Florida has not been enforcing this exclusivity and the courts sided with the Seminoles. However, the Seminoles have been acting in good faith, providing the state with the estimated $300 – $350 million annual payments the original agreement set up for such exclusivity. But now that the legislature has once again failed to stop others from offering designated card games, which is expanding gambling in the state, the Seminole tribe has decided to now stop providing the good faith payments. The Sun Sentinel reports:  

The tribe had warned it would halt the payments, which totaled nearly $330 million last year, because of controversial designated-player card games offered by many of the state’s pari-mutuel cardrooms. The Seminoles — and a federal judge — say the games violate part of a 20-year gambling deal by the tribe and the state in 2010. That deal, in part, gave the tribe exclusive rights to “banked” card games. 

The Seminole Tribe of Florida made good on threats Tuesday by telling Gov. Ron DeSantis it is quitting a long-standing revenue-sharing agreement with the state after negotiations on a new gambling deal went nowhere this spring. 

In a July 2017 settlement between the Seminoles and former Gov. Rick Scott, the state agreed to drop its appeal of Hinkle’s decision and to take “aggressive enforcement action” against pari-mutuels operating banked card games that violate state law. In exchange, the Seminoles agreed to continue making payments to the state until the end of this month. “Unfortunately, there has not been aggressive enforcement against those games, which have expanded since Judge Hinkle’s decision,” Osceola wrote.

Florida lawmakers considered this possible outcome, and mad adjustments the budget, but some believe the financial contribution, and the gambling restriction that comes from Seminole exclusivity, too import to not make an attempt to resolve the issue.   An online source explains:

State Representative Evan Jenne called for negotiations with the Seminole Tribe of Florida to reinstate the annual payments of an estimated $350 million suspended by the tribe after a failure to reach an agreement about the future of gambling in the state. “That’s just too much money to be left out there unaccounted for in our budget,” said the legislator.

Jenne, a Democrat who represents 99th District which include most of Hollywood and Southern Broward, said the suspension of payments from the tribe could have been avoided. “It was something that was a long time coming, it’s been talked about for quite some time it’s been nearly a decade since the compact would, should have been signed,” he said.

“They had a promised of exclusivity when it came to games like that and the state has not done their part in holding up that part of the bargain,” said Jenne.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION

 


Florida Gov Encouraged to Pass Lottery Ticket Warnings

Casino Watch Focus has reported on a Florida Bill that would call for warning labels to be placed on the front of physical state lottery tickets sold, as well as prevent online sales in the future. The warning labels would be visible and warn that playing lottery games constitutes gambling and may lead to gambling addiction. Those in support of using gambling as the means to fund education took issue with the bill and drafted a letter. No-Casino’s John Sowindki addressed the problems with the letter and encouraged passage. Florida Politics reports: 

“The lottery industry would rather pretend that there are no adverse consequences to their regressive and addictive enterprise,” said No Casinos President *John Sowinski*. “Clearly there are.” Sowinski goes after specific points raised in a letter from World Lottery Association President *Rebecca Paul Hargrove* to Gov. *Ron DeSantis.*

Hargrove argues requiring warning labels on the front of lottery tickets threatens education revenues in Florida and sets bad precedent nationwide. “The instant scratch-off games have been around for over 45 years, and sales of these games continue to grow every year,” Hargrove wrote, “but more importantly the sales of these games continue to grow funding for good causes every year.”

Sowinski suggests Hargrove gives up the game in her search for further lottery sales.“Rebecca Paul Hargrove’s letter is basically an admission that if Floridians are properly warned about the addictive nature of scratch-off games and other lottery products, that some will choose to not spend money on them,” Sowinski said, “which is the entire purpose of this good legislation.”

Moreover, Sowinski then brings into question the very nature of raising funds off those that are addicts in the first place. Florida Politics continues:

The legislation requires ticket labels read either “WARNING: LOTTERY GAMES MAY BE ADDICTIVE” or simply “PLAY RESPONSIBLY.”

Sowinski scoffed at the reluctance to warn against dangerous behavior or to demonstrate responsibility.

“The World Lottery Association’s letter never disputes the addictive nature of these games,” he said. “The fact is that gambling enterprises, including lotteries, rely on addicts who spend a high volume of money for a large portion of their profits. That they would object to a simple, truthful warning label is obnoxious.”

The bill has been sent to the Governor’s desk and awaits his action.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


New Federal Legislation to Regulate Predatory Gambling-esque Loot Boxes in Video Games Announced by Mo Sen. Hawley

Casino Watch Focus has reported on the ongoing developments and many efforts by regulatory officials to bring awareness to a new form of gambling aimed at kids and video game players. Loot Boxes are a new gambling type mechanic that has the player pay money to open a mystery box in hopes of winning loot to help them in the video games they are playing. In some cases those items carry real value that can be sold, effectively making them video game slot machines aimed at kids. In other cases, loot boxes are implemented to play on the exact same psychology exhibited when people outright gamble, and regulators and studies agree. A lot of international efforts have been taken, but domestically, the reactions have been mostly to encourage the industry to fairly self regulate and to call for investigations into this gambling-esque video game mechanic that is largely targeting children. However, new federal legislation has now been announced by Missouri Senator Josh Hawley. NBC News Online reports: 

Senator Josh Hawley, R-Mo., is introducing legislation that seeks to ban exploitative video game industry practices that target children like loot boxes and pay-to-win, he announced on Wednesday.

“Social media and video games prey on user addiction, siphoning our kids’ attention from the real world and extracting profits from fostering compulsive habits. No matter this business model’s advantages to the tech industry, one thing is clear: there is no excuse for exploiting children through such practices,” Sen. Hawley said.

“When a game is designed for kids, game developers shouldn’t be allowed to monetize addiction. And when kids play games designed for adults, they should be walled off from compulsive microtransactions. Game developers who knowingly exploit children should face legal consequences.”

There are many strategies for regulating microtransactions and loot boxes. Some places have banned them outright, others have looked at making sure the items cant be sold for cash, thus not being gambling, but a transaction and others have focused on the intent of the loot box or simply the age of those making these purchases. Sen Hawley’s approach is a bit of an amalgam with the emphasis on the age of the player and the legislation utilizes a unique lens, The Children’s Online Privacy Protection Act. An online source explains: 

Called “The Protecting Children from Abusive Games Act,” the bill would specifically seek to protect minors by focusing on games either targeted at, or played by, consumers under the age of 18. Determining what games are targeted at minors would apparently be based upon a number of factors, including the game’s subject matter, visual content, and other indicators similar to those used to determine the applicability of the Children’s Online Privacy Protection Act (COPPA).

For games that meet the bill’s criteria, the legislation would prohibit “several forms of manipulative design.” In particular, the announcement identifies that the legislation would prohibit loot boxes, defined as “microtransactions offering randomized or partially randomized rewards to players.” Further, it would outlaw “pay-to-win” game designs, including both (1) attempting to induce players to spend money to quickly advance through game content that is otherwise available for no additional cost; and (2) manipulating the balance in competitive multiplayer games to give players who purchase additional microtransactions a competitive advantage over other players who do not pay the additional fees.

The proposed legislation would be enforced by the FTC through its authority to curb unfair and deceptive trade practices. In addition, the proposed legislation would empower state attorneys general to file lawsuits against game makers to enforce the act. 

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION

 


Missouri’s Largest Gambling Expansion Proposal Since Casino Legalization Emerges in the House

Casino Watch Focus has reported on the various gambling proposals and changes in the Missouri gambling landscape, but this proposal might be the most shocking. The Missouri constitution was amended to allow gambling on riverboats by the voters back in 1994 and since that time, the qualifications for river boat gambling has drastically expanded. Its started as actual river boats that traveled up and down the rivers for a two hour period, but now no time or monetary limits exist and gamblers walk into full scale buildings up to 25 feet off the river bank (albeit with a tiny amount of river water with a tiny amount of river water pumped underneath them as to technically make them water craft). Even still, gambling has always been limited to the Missouri and Mississippi rivers. Now a bill has been proposed in the Missouri house that is so radical, it’s not an exaggeration to call it the largest and most problematic expansion of gambling the state has ever seen. An online source explains:

“This irresponsible bill would permit slot machines on every street corner where a restaurant, bar, convenience store or truck stop is located,” said Mike Winter, executive director of the Missouri Gaming Association. “These machines look and play just like slot machines. If this bill passes, we can expect to see them in every city, town or community across the state. Missouri could very quickly have more slot machines outside of casinos than inside them.”

“This is not what Missouri voters envisioned when they voted to approve casino wagering in Missouri,” Winter said. “Voters were very careful to restrict casinos to certain locations and to limit the number of casinos.”

The bill would bypass a vote by Missouri residents, who first authorized casinos by ballot initiative in 1994 and also voted to limit the number of casinos to 13 in 2008.

Not only does the bill drastically expand gambling, it seemingly bypassing regulation by the Missouri gambling commission and it leaves vulnerable those people and families who could be most impact by gambling addiction. The source continues:

If passed, the proposed gambling expansion is expected to heavily impact rural areas throughout the state. The same towns and cities that opposed casinos in their communities could suddenly see hundreds of slot machines in family restaurants, convenience stores and other retail establishments.

HB 423 would prohibit anyone under the age of 21 from playing lottery slot machines but oversight would be minimal as compared to the strict rules that regulate casinos. Busy retailers with machines on their premises would be solely responsible for monitoring their use.

“The proposed regulations, security and oversight are simply inadequate,” Winter said. “This gambling expansion would bypass not only our state’s voters but also our strong gaming commission, which establishes and enforces strict gambling regulations in our casinos.”

Missouri casinos and the Missouri Gaming Association provide a full range of programs to promote responsible gaming and to help those who have a gambling problem. Retailers hosting lottery slot machines would not be required to provide similar responsible gaming education.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


Despite Recent Supreme Court Ruling, most NCAA March Madness Gambling will be Illegal and Cost Employers Millions in Lost Productivity

Casino Watch Focus has reported on the ongoing problems that come with the NCAA March Madness tournament each year. Millions is lost to employers through a decline in work place productivity and people continue to gamble away money at unprecedented rates. Most of this gambling is illegal and despite the recent legalization of sports betting by the Supreme Court, that trend will continue. An online source explains:

America has seen a boom in legalized sports betting over the past year, and March Madness betting will highlight that. Nevada certainly remains the top dog, but New Jersey has come on strong. Yet illegal offshore sportsbooks continue to thrive. The American Gaming Association (AGA) set out to determine how much legal versus illegal wagering will take place with *March Madness *betting.

Over the first week of March, the AGA utilized Morning Consult to conduct an online survey among more than 11,000 adults. The study found that some 47 million people will wager on the NCAA men’s basketball tournament, which began Tuesday with the First Four. The AGA found that $8.5 billion will be bet during the tourney, shared by legal and illegal sportsbooks. Legal sports betting continues to expand, but this report found that offshore operations and local bookies will still attract more action than regulated sportsbooks. 

The general legality of such gambling continues to be a prominent issue this time of year as many people view office pools as harmless fun. Unfortunately, it’s anything but and its almost always illegal gambling. ESPN explains:

“Generally, if the office pool charges a fee for entering the pool and awards prizes to the winner(s), then there is a serious question as to its legality. Some states exempt small pools from their gambling laws and regulations,” said Washington, D.C.-based attorney Steven Eichorn of Ifrah Law.

Sports betting is currently legal in only a handful of states, with Nevada the only state permitted to offer single-game wagering, the most popular form. The Nevada Gaming Control Board does not track the amount bet on the NCAA tournament separately, and combines the NBA and college basketball into one “basketball” category on its monthly revenue reports. The spike in action from March Madness is easy to see, though.

In terms of cost to employers, the Charlotte Observer points to a Chicago-based study which says as much as $1.7 billion will be lost by employers in productivity, which breaks down to $109 million lost for every 10 minutes spent following the tournament. They believe there will be over 37 million workers participating in pools with 1.5 million watching games and results online from their desks. ESPN recently quantify the financial impact of just the gambling:

 On the low end, the FBI estimated in 2013 that $2.6 billion was bet illegally on the tournament. On the high end, veteran bookmakers estimate the number to be anywhere from $12 billion to $26 billion. Friendly bracket pools are everywhere, with most everyone betting on the NCAA tournament in some form. But there are bets, and then there are bets. You don’t get to $26 billion with $20-per-sheet office pools.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION