Keith Whyte on the hidden harm of foreigner-only casino policies [Podcast]

Keith Whyte, foreigner-only casino policies

Keith Whyte, Executive Director of the National Council on Problem Gambling (NCPG) talks with Asia Gaming Brief’s Asia Editor Felix Ng about foreigner-only casino policies and how effective they really are in tackling problem gambling amongst the domestic population. We also discuss the merits of various entry-restriction models deployed across Asia.

Interview transcript

Felix Ng  00:08

Hello, and welcome to an Asia Gaming Brief podcast. My name is Felix Ng, and today I’m joined by Keith White, Executive Director of the National Council on Problem Gambling, based in Washington DC in the USA. I reached out to Keith as I wanted to get his thoughts on the so-called foreigner-only casino policies that have been adopted across quite a few Asian countries over many, many years, supposedly to reduce gambling harm amongst its citizens.

So I’m keen to hear Keith’s thoughts as to how effective this type of policy is to reduce the social and financial harm that comes with problem gambling. Or are we just simply forcing the problem across the border, or through the internet out of sight out of mind? Keith is one of the most widely respected experts in the field of problem gambling and having been with the NCPG since 1998, he’s written numerous articles and studies on gaming issues, and I’m hoping to get some of his perspectives on this subject. Keith, welcome, and thanks for joining us today.

Keith Whyte  01:07

Oh, thank you, Felix, for having me.

Felix Ng  01:10

So, the foreigner-only approach to casinos. I see it a lot in Asia, but I think you mentioned that it actually is elsewhere in the world as well. But I guess the main question is, is it effective in stopping gambling harm?

Keith Whyte  01:27

I think as you said, it both can be seen as driving the problem across the border, or driving the problem underground. In either way, a foreigner-only approach can lead at times to the host country government ignoring, or minimizing, gambling problems in their own society, because they assume that the problems have gone elsewhere, or in some cases are driven underground. So that contributes sometimes to public health policy that is atrophied because there’s the perception that, of course, gambling addiction isn’t here. And I think that can sometimes have some negative effects.

Felix Ng  02:07

I’m just thinking of three places, just off the top of my mind that have this foreigner-only casino policy. So you have South Korea, you have Nepal, and Vietnam. And I think in a lot of cases, you see these citizens on mass traveling to other countries, sometimes it could just be a skip and hop across the border.

Or maybe in South Korea’s case, a lot of them end up going to the Philippines. What I’m thinking is, when you’re a tourist, and you’re going into another country, for the purpose of gambling, would it be likely that you’ll gambling more, because you’ve got this pent up demand, you haven’t been able to gamble for so long. Now you’ve taken this trip, and you’re like, oh, I’m going bring, all my money and gamble.

Keith Whyte  02:52

We certainly think there can be a binge effect. You know, if you have all this pent up demand, on an individual level, you know that the individual is eager, desperate to gamble, if they’re so interested in gambling, that they’re willing to travel across the border, and spend that money and do everything they have to do that. And they may blow it all out, because they’ve only got a weekend, you know, to get in their game.

It rarely, I think, leads to moderation. And so with the people though, of course, you bring your problems back with you home. And as there’s more and more Asian countries which have domestic availability of casinos, or other forms of gambling, both legal such as the lottery or illegal, you know, online, it means that, that addiction, that was always still present in society, now becomes perhaps even a little bit greater, because you’re coming back with your gambling problem to your home country, but that doesn’t mean you’ve stopped your gambling or you stopped your addiction.

Felix Ng  03:53

So that’s when you maybe move into some illegal underground channels to gamble. Right? And that’s definitely concerning, because the whole point of it, of these, these policies was to minimize the harm, but now we’re actually just driving them into places that potentially they’re not being monitored, and they’re not receiving the right amount of help from governments.

In the example of South Korea, there is actually one casino, Kangwon Land, that does allow locals to gamble there.  It is in a very remote mountainous region and I’m guessing, they put it in that region because it’s not something that you can just come off work at the end of the day and go for a gamble. It’s something you’d probably have to do on the weekend or you’d have to take some time off. What’s your thoughts on that? Do you think that that is an effective way?

Keith Whyte  04:45

Well, there are some features that by limiting accessibility, you may in a surface level, you may try and minimize problems. If you make it harder for people to get there, or if you put limits, for example, in entry fee/ levy, like they have in Singapore, or you remove even ATM machines from the casino floor, these are all measures that are designed to make it a little bit harder for people to gamble.

But of course, the more likely you are to have a gambling addiction, the less than these features matter. Gamblers and addicts will always find a way. So then, they seem fairly ineffective at really reducing gambling addiction, they may paradoxically, reduce recreational gambling, because people who don’t have that thirst, that desire to gamble, those simple barriers that are erected may prevent them from taking the three hour train ride up to Kangwon.

But someone who is an avid gambler, and especially someone who’s an addicted gambler may hop on that train at every opportunity. And so some of these structural and physical barriers may not be as effective. And it’s important to remember, Las Vegas is surrounded by a desert, you know, Macau is an island, Atlantic City is an island.

So there’s been a long history in almost every society of trying to physically isolate gambling, partly because it was seen as so attractive, that people would do anything to get there, partly because it was seen as undesirable. So these casinos were often placed in remote or inaccessible locations, even surrounded by a body of water. And it is a means of maybe protecting the rest of the population from the evil influence, if you will, of gambling.

But now, of course with modern transportation, and of course modern technology, those old physical barriers are increasingly ineffective at protecting either the gambler themselves or the community at large.

Felix Ng  06:43

And is there a kind of an aspect of: “Well, since I’m here, I might as well make the use of the most of my time.” At least in the Singaporeans case, they have to pay an entry fee to go in. “Well, I’m already down S$100 so I might as well try and win my money back. I might as well spend the whole day here, because I’ve already paid $100. I mean, it’s a lot of money to get in there.” Japan is looking to adopt possibly a similar model.

What’s your thoughts on that kind of middle ground where, yes, locals can go in, they do have to pay a fee. And, I think also, if you’re on welfare, or you’re receiving government help you’re also barred from playing at the casino. But you know, is that kind of the golden standard that we should be looking at?

Keith Whyte  07:33

I’ve been lucky enough to be able to advise both the government of Singapore and the government of Japan on their casino policy. And the one thing that’s very important to know is that an entry levy for locals is not a Responsible Gambling feature. You know, it’s not intended to deter gambling addiction.

There are lots of policy reasons why governments would adopt this entry levy, but it is to dissuade casual gamblers you know, it’s to dissuade people who aren’t serious gamblers, because of course, the more serious a gambler, the more potentially addicted gambler, the less salient an entry fee is.

People with gambling addiction are not price sensitive at all. And it’s almost there’s almost a reverse effect or revenge effect. And that people with a gambling addiction will end up paying that levy many, many, many times over and over again, I wouldn’t call it a tax on people with gambling problems.

But it has, in some ways, that impact. You know, and this is an unintended effect, of course of an entry levy. So when you look at preventing gambling, addiction an entry levy is not effective. There are other reasons why governments may have an entry levy, and that there’s lots of justification for other reasons, but not necessarily to curb gambling addiction.

Felix Ng  09:01

Could it be possible that if you’re curbing the casual gamblers, with recreational gamblers that, they don’t have the chance to become problem gamblers, because they just, they just haven’t even built up the habits in the first place? I mean, could that be a reason?

Keith Whyte  09:15

Oh, absolutely. And the entry levy may well discourage people from going to the casino in the first place. Those are people who are at much lower risk. But certainly if you reduce the number of people who gamble, you’re likely reducing the amount of people who may develop gambling problem in the future.

The entry levies are much less effective for people who have already initiated their gambling, and especially again, people who are progressing on that path to develop an addiction. There are a lot of ways to additionally deter a gambling addiction development. And so these are policies that are much more common around, for example, alcohol, where you would do youth education, you do a lot of awareness training.

And so relying on measures at the point of entry to the casino is unlikely to be very effective for people who have serious problems. It’s really when you pull the lens back, if you will, and you start to look at a broader public health approach, though those policies are likely to be much more effective in deterring gambling addiction on a societal level.

Felix Ng  10:25

We obviously come from markets, me in Australia, you in the US, where locals can come in, we can gamble. And at least in Australia’s case, and I’m sure for the US there are a lot of programs designed to monitor and make sure people are not experiencing harm. And if they are, then there’s ways to help them. I don’t see this as much in Asia, like I see, obviously, a self exclusion program in the Philippines.

I think they added about 200 in the last year, which doesn’t seem like a very large number for the amount of people that are there. The question is, if more and more countries, especially in Asia are now considering allowing locals into casinos, I mean, Japan’s thinking about it as well, what would be your kind of golden ticket your solution for the model that they should be adopting?

Keith Whyte  11:18

I do think the Singapore approach is an excellent model. It is a broad public health campaign, that is also coupled with aggressive responsible gambling regulation for the casinos. I believe Japan is going to adopt a very similar model, in that they’re not going to place too much reliance on entry levy, we’re going to place a lot more reliance on broad public health campaigns and strict Responsible Gambling measures regarding things like credit, regarding things like employee training.

I think there’s going to be a lot of apps and technological solutions in Japan. And so this is that modern, balanced approach where you have, you’re trying to talk to everybody on a public basis to try and raise awareness that gambling addiction is preventable and treatable. And then for those who choose to gamble, you have a comprehensive set of protections that the casino is required to offer, including limit setting, and as you mentioned, self exclusion, employee training, and other features that are designed to minimize harm.

And I think that is one of the reasons why you’re seeing it now in some of these newer jurisdictions is that there is less stigma now about gambling. And that as you said, at the start, having a foreigners only gambling policy implies that it’s not safe or it’s not okay, for our citizens to gamble.

And so, perhaps it’s not really much of a public health approach, because it’s seen as a little bit taboo, now that those foreigner-only policies are changing now that more people across Asia have more exposure to gambling in their own countries, we hope that the public health approach will follow, so now there’ll be a little bit more permission, a little bit more discussion, to talk about gambling addiction, to talk about it openly and remove some of that damage, shame and stigma.

And also to make sure that you’re protecting, you’re putting responsive gambling measures into place, because again, if you are a country that only allows foreigners to gamble in your casinos, you might not have very good responsible gambling measures in place, because, they go back home. And again, there’s historical precedent. In Las Vegas, for most of its history, there were very few responsible gambling measures in place, because the attitude was, these people are going to come and then leave their money, and they’ll go back home, and they take their problems with them.

Now, Las Vegas, up to 30 percent of their revenue comes from a locals market and they’re much more conscious about the negative impacts from gambling, because it stays home in their own community.

Felix Ng  14:08

That’s actually all the questions that I wanted to run by with you, I thought it was very insightful discussion. And I think for Asia, there’s still a little bit of work to do in terms of getting governments to actually start talking about gambling and gambling addiction. I think for a lot of parts in Asia, it’s still, as you say, a taboo subject. It’s something that it’s pretty much political suicide if you’re going to bring casinos into your locale.

But I do see this changing. So I’m interested to see how things progress within Asia. And I think that perhaps we can look at Las Vegas and we can look at Australia and other countries throughout Europe to see kind of how they do it and try to figure out you know, how can we minimize the harm to our citizens whilst maximizing the financial pros of having a casino in a resorts business.

Keith Whyte  14:58

Absolutely it’s striking that balance. I would say you can’t maximize revenue unless you minimize costs. Because at the end of the day, the costs of gambling addiction are going to be borne by not just the individuals and their families, but also by the community, the society at large.

Bankruptcy and addiction, and crime costs fall on government as well. And so it makes sense as we think about a more modern sustainable gambling policy, to have a little bit more active discussion about those costs and benefits. But now I think there’s an opportunity to look at it in a more holistic way.

And again, as much as there are lessons to be learned all around the world. You know, we look at Singapore, as a leader, I think Japan is going to do some very interesting things. And that will influence especially global multinational companies, who have a great program, perhaps in Australia, you know, can they bring it into a new jurisdiction and adapt to that culture? So I think it’s a fascinating time in our industry.

It’s a fascinating time to think about where responsible gaming and problem gambling are going. And it’s, it’s great to be able to have this discussion with you, Felix, I truly appreciate you and Asia Gaming Brief covering and keeping up with this issue.

Felix Ng  16:17

Well, thanks again for your time, Keith, and hope to talk to you about some of these issues a little bit more in the future.

 Keith Whyte  16:23

My pleasure. Thank you.

Felix Ng  16:24

Thank you.