Gaming and Gambling in United Kingdom - Report Example

Analysis on UK Gambling & Gaming Total Number of Words: 2,021 Table of Contents I. Introduction ……………………………………………………………….. 4 II. P.E.S.T. Analysis ………………………………………………………… 5 a. Political Factors …………………………………………………. 5 b. Economic Factors ……………………………………………….. 5 c. Social Factors ……………………………………………………. 5 d. Technological Factors …………………………………………. 5 III. Trends of Gambling and Gaming Innovations and Consumer Behaviour throughout the United Kingdom ………………. 6 IV. Impact of Providing the Betting and Gambling Staffs with Customer Service Representative (CSR) Trainings ………………….. 6 V. UK Regulation on Gambling and Gaming Industry …………………… 7 a. Gambling Act 2005 (The Act)………………………………….. 7 b. Role of Gambling Commission, HMRC, SOCA, Ofcom, and the National Lottery Commission ……………. 7 c. Licensing Conditions based on the Three Licensing Objectives …………………………………… 8 d. Accepted Code of Practice ……………………………………. 8 e. Gambling and Gaming Policies related to Data Protection Act, Freedom of Information Act, and Child or Youth Protection ……………………………………… 9 VI. Scams and Other Illegal Practices on Gambling and Gaming ………. 9 VII. Type of Penalties and Other Form of Punishments …………………... 9 VIII. Conclusion ………………………………………………………………… 10 Appendix I – Proportion of Respondents Gambling by Type of Gambling Activity as of March 2008 ……………………………. 11 Appendix II – P.E.S.T. Analysis on UK’s Gambling and Gaming Industry … 12 References ………………………………………………………………………13 – 15 Introduction Upon gathering a total of 8,000 survey participants with regards to the remote gambling in UK, Gambling Commission (2008c) reveals that 6.3%, 2.3%, and 1.4% of the respondents have participated in the National Lottery, betting, and poker games within the month of March 2008 respectively. (See Appendix I – Proportion of Respondents Gambling by Type of Gambling Activity as of March 2008 on page 11) Individuals more than 18 years of age are legally allowed to gamble in UK. For this reason, as much as 2.18 million adults (68% of 32 million adults) have experienced at least one form of gambling within the past 12 months – except for the National Lottery wherein 11 million adults (48% of 23 million adults) have participated (Gamblng Commission, 2008a). As a result of legalizing gaming and gambling, the Gambling Commission (2008a, b) reported that roughly 284,000 individuals who regularly gamble developed gambling problems. After analyzing the external environment of gambling and gaming using the P.E.S.T. analysis, the changing trends of gambling and gaming innovations and consumer behaviour throughout the United Kingdom as well as the impact of providing the betting and gambling staffs with customer service representative (CSR) trainings will be thoroughly discussed. Regular gamblers can be addicted to gambling which causes serious problems on familial and social relationships and financial difficulties of the player. (Cutter & Smith, 2008) With regards to the need to control gaming problems, strategic ways wherein the UK government regulates gambling and gaming industry will be tackled. In line with this matter, the main purpose of Gambling Act 2005 and other related government agencies like the Gambling Commission and HMRC will be tackled followed by going through the licensing conditions based on the three licensing objectives, the accepted code of practice, and gambling and gaming policies related to Data Protection Act, Freedom of Information Act, and Child or Youth Protection. Upon examining the yearly incidence of scams and other illegal practices, the type of penalties and other form of punishments given to individuals who will be caught violating the implemented legislations will be analyzed to give the readers a better understanding of the subject matter. P.E.S.T. Analysis Political Factors Gambling and Gaming has been legalized by the UK government. To prevent criminal cases and violent acts, gambling and gaming operators throughout the United Kingdom including its respective advertisements are highly regulated by Gambling Commission (Gambling Commission, 2007). Economic Factors Since the quality of gambling and gaming infrastructure in UK is highly competitive, gambling and gaming operators can easily earn significantly high profit. To avoid any forms of money laundering act and unfair gambling and gaming practices, Gambling Commission was given the authority to intervene with gambling and gaming operators that are found guilty of violating the legislations that are stated under Gambling Act 2005 (Office of Public Sector Information, 2008b). Social Factors Regardless of socio-demographic status or educational background of each individual, gambling and gaming operators are free to render its services to anyone provided that the prospective customer is at least18 years old and above (Office of Public Sector Information, 2008d). Technological Factors Over the years, improvements in communications technology enable gamblers to have an easy access over gambling and gaming. Since gamblers and gamers are able to use of electronic facilities such as laptop and Internet access as well as mobile phone devices, gambling and gaming operators are able to maximize the company’s profitability through economies-of-scale. (See Appendix II – P.E.S.T. Analysis on UK’s Gambling and Gaming Industry on page 12) Trends of Gambling and Gaming Innovations and Consumer Behaviour throughout the United Kingdom Back in 1980s when Internet technology was not yet readily available to the public, gambling and gaming takes place in casinos, betting on horses, grey hound, and football games including the national lottery. Because of the significant improvements over the communication technology, remote gambling and gaming with the use of the Internet, mobile phones, television, radio and other forms electronic gadgets arises. Since remote gambling is easily accessible to gamblers as compared with traditional gambling such as going to the casino, gamblers are more likely to develop a positive behaviour on gambling and gaming. For this reason, there is a higher tendency for on-line gamblers to be addicted with gambling and gaming activities. Impact of Providing the Betting and Gambling Staffs with Customer Service Representative (CSR) Trainings The study that was conducted by Fleming et al. (2005) revealed that customers who are emotionally satisfied with the service they receive from a business organization are more likely to spend larger amount of money as compared with customers who are not satisfied with the services offered to them. Likewise, when a customer is emotionally satisfied with the services they receive from gambling and gaming company, there is a higher chance that the customer would consider patronizing the services offered by the company (Beaujean et al., 2006). In line with the importance of keeping the gamblers satisfied, several studies revealed that satisfied customers can lead to customer loyalty. (Luo & Bhattacharya, 2006; McGuire, Sundgren, & Schneeweis, 1998) Since customer loyalty enables gambling and gaming companies to increase its profitability (McGuire, Sundgren, & Schneeweis, 1998), it is necessary to provide proper customer service representative (CSR) trainings to betting and gambling staffs. UK Regulation on Gambling and Gaming Industry Gambling Act 2005 (The Act) Aiming to reduce the negative health, social, and economic impact of gambling throughout England, Wales and Scotland, the Gambling Act 2005 (the Act) was developed and implemented back in 2005 with the purpose of enhancing the Gaming Act 1968 – also known as the ‘1968 Act’ (Gambling Commission, 2008f: p. 8, 13). The main purpose of ‘The Act’ is to serve as a guide for local authorities with regards to the following information: (1) the differences between gaming, betting, lottery, and cross-category activities; (2) the main function of Gambling Commission which include issues related to proper licensing and guidance for the code of practice in gambling and gaming among others; (3) topics related to general offenses like cheating; (4) the need to protect children and young people from becoming involved with gambling and gaming; (5) accepted advertising activities; and (6) the legality and enforceability of gambling contracts among others in order to prevent any forms of criminal activities and violent situation to occur (Office ofPublic Sector Information, 2008a). Role of Gambling Commission, HMRC, SOCA, Ofcom, and the National Lottery Commission Gambling Commission is responsible in regulating gambling and gaming on behalf of the Department for Culture, Media, and Sports (DCMS) to ensure the safety of the gamblers and protection of vulnerable children and the young adults (Gambling Commission, 2008d, 2008f). As part of ensuring that gamblers who show signs and symptoms of severe addiction on gambling receives necessary treatment, Gambling Commission is responsible to work with gambling and gaming facilities by providing them with necessary information on where problem gamblers can receive proper advice and treatment to protect these people from the adverse effects of gambling addiction (Gambling Commission, 2008e). To enhance the quality service of Gambling Commission, the government agency maintains a good working relationship with other related organizations like HM Revenue and Customs (HMRC) which is responsible on ensuring that correct amount of taxes is being collected from the gambling and gaming business and prices won by the gamblers and gamers (HMRC, 2008); Serious Organised Crime Agency (SOCA) which is responsible in conducting financial information related to organized crimes (SOCA, 2008), Office of Communication (Ofcom) which regulates telecommunication, TV, and radio broadcasting in UK (Ofcom, 2008), and the National Lottery Commission which is responsible in organizing draw-based games among others (National Lottery Commission, 2008). Licensing Conditions based on the Three Licensing Objectives The three licensing objectives include: (1) ‘to keep crime out of gambling; (2) ‘to ensure that gambling is conducted fairly and openly’; and (3) ‘to protect children and other vulnerable people from being harmed or exploited by gambling’ (Gambling Commission, 2008f: p. 9). Under the strict monitoring of Gambling Commission, gambling and gaming operators including its employees are expected to be a law-abiding citizen by seriously complying with the regulations covered under the Gambling Act 2005 (Gambling Commission, 2008f: p. 13). Accepted Code of Practice As stated under the Gambling Act 2005 – 24(2)(a), licensed gambling and gaming facilities are expected to conduct gambling and gaming procedures in a ‘fair and open way’. To avoid possible legal problems, Gambling Commissions expect gambling and gaming providers to have sufficient knowledge with regards to the social problems caused by gambling – 24(10)(d). Since gambling and gaming can be very addicting to some people, it is part of the obligation of gambling and gaming providers to protect children from participating in this type of activities. Gambling and Gaming Policies related to Data Protection Act, Freedom of Information Act, and Child or Youth Protection Data Protection Act (1998) highly regulates the use of information concerning a person which is stored both in computerized and non-computerized forms. (Office of Public Sector Information, 2008c) When conducting sales promotion and marketing activities, gambling and gaming facilities are expected to observe Data Protection Act (1998) by ensuring that information of individuals they use are consented by the subject, is accurate, up to date, and/or secured (Gambling Act 2005, 2007). When applying for a permit to operate, applicants’ information submitted to Gambling Commission will be subjected to Freedom of Information Act 2000. (Gambling Commission, 2008g) Therefore, any personal information submitted to Gambling Commission shall be treated with confidentiality. As part of the gambling and gaming policies related to child or youth protection, operators are required not to allow any person below the age of 18 to participate in any forms of private or non-commercial gaming, betting, lottery, or gambling (Office of Public Sector Information, 2008d). Scams and Other Illegal Practices on Gambling and Gaming Under the Money Laundering Regulation and the Proceeds of Crime Act (Gambling Commission, 2008f; 2007), gambling and gaming operators and players are not allowed to launder money either through local or international transactions. This policy was implemented to prevent the possibility of using large sum of money on terrorism. Aside from preventing money laundering, Gambling Commission also acts upon other illegal gambling activities like “high stakes commercial poker outside casinos, betting in pubs, and the use of illegal gaming machines” (Gambling Commission, 2008f: p. 6). Type of Penalties and Other Form of Punishments Individuals who are found guilty of violating the implemented gambling and gaming legislations can be presented as criminal or civil proceedings which are punishable under the law. As part of the gambling and gaming provision, gambling facilities without proper licensing, has at least one gaming equipment in Great Britain that uses the country’s premises within obtaining a permit to operate, uses unlawful gaming software, and/or cheating is punishable under the Gambling Act 2005 for a maximum of 51 weeks or 6 months of imprisonment, a level 5 fine, or both (Office of Public Sector Information, 2008b). Conclusion Even though gambling and gaming throughout the United Kingdom is legal, the industry remains highly regulated to protect the safety and social well-being of each individual from becoming a victim of criminal activities as well as the danger of gambling-related problems. In line with the penalties and punishment, increasing the number of years of imprisonment will make the operators more careful in terms of violating the Act. As part of controlling the gambling and gaming activities, Gambling Commission has been granted the sole authority to ensure that each local and international gambling and gaming facilities are properly licensed according to the legislations stipulated under the Gambling Act 2005. Aside from taking legal actions and punishing guilty operators that violates the law, the same government agency is authorized to protect the safety of children and young individuals below the age of 18 years old from the possible psychological harm that may arise out of gambling. Gambling and gaming operators are also required to be familiar with the Data Protection Act 1998 as well as the Freedom of Information act 2000 in order to avoid facing legal problems when applying a permit to operate from the Gambling Commission and/or conducting advertising campaigns. *** End *** Appendix I – Proportion of Respondents Gambling by Type of Gambling Activity as of March 2008 Source: Gambling Commission, 2008c Appendix II – P.E.S.T. Analysis on UK’s Gambling and Gaming Industry Political Economic Social Technological Gambling and Gaming has been legalized by the UK government. Gambling and Gaming operators including its respective advertisements are highly regulated by Gambling Commission. (Gambling Commission, 2007) The quality of gambling and gaming infrastructure in UK is highly competitive. Gambling Commission has the authority to intervene with gambling and gaming operators that violates the legislations stated under Gambling Act 2005 (Office of Public Sector Information, 2008b), Regardless of socio-demographic status or educational background, gambling and gaming operators can render its services to individuals who are 18 years old and above. (Office of Public Sector Information, 2008d) Improved communications technology enables gambler to have an easy access to gambling and gaming. The use of electronic facilities like laptop and Internet access as well as mobile phone devices enables gambling and gaming operators maximize its profit through economies-of-scale. References: Beujean, M., et al. (2005). The Moment of Truth in Customer Service. McKinsey Quarterly , 1:62 - 73. Cutter, D., & Smith, M. (2008, April 20). Help Guide. Retrieved October 12, 2008, from Gambling Addiction and Problem Gambling: Signs, Symptoms, and Treatment: http://www.helpguide.org/mental/gambling_addiction.htm Fleming, J., et al. (2006). Manage Your Human Sigma. Harvard Business Review , July - August. Gambling Act 2005. (2007, November). Retrieved October 12, 2008, from On-line Website Competitions & the Implications of the Gambling Act 2005: http://www.sheridans.co.uk/pdf/Gambling%20Act%202005%20-%20November%202007%20Guidance%20Notes%20article%20(full%20version).pdf Gambling Commission. (2007, December 28). Retrieved October 12, 2008, from The Prevention of Money Laundering and Combating the Financing of Terrorism: http://www.gamblingcommission.gov.uk/Client/mediadetail.asp?mediaid=326 Gambling Commission. (2008b, July). Retrieved October 12, 2008, from British Gambling Prevalence Survey 2007. Reference number INFO 08/09: http://www.gamblingcommission.gov.uk/UploadDocs/publications/Document/British%20Gambling%20Prevalence%20Survey%202007%20summary.pdf Gambling Commission. (2008c, April). Retrieved October 12, 2008, from Survey data on remote gambling participation: http://www.gamblingcommission.gov.uk/UploadDocs/publications/Document/GCP_08_38%20-%20ICM%20Omnibus%20Survey%20-%20Publication%20of%20data%20on%20remote%20gambling%20_2_.pdf Gambling Commission. (2008d). Retrieved October 12, 2008, from Welcome to the Gambling Commission: http://www.gamblingcommission.gov.uk/Client/index.asp Gambling Commission. (2008e). Retrieved October 12, 2008, from Frequently Asked Questions: What role does the Gambling Commission have in ensuring problem gamblers receive treatment for their addiction?: http://www.gamblingcommission.gov.uk/Client/faq_detail.asp?id=15 Gambling Commission. (2008f, July 21). Retrieved October 12, 2008, from Annuarl Report 2007/2008: Presented pursuant to the Gambling Act 2005 paragraph 16 of Schedule 4: http://www.gamblingcommission.gov.uk/UploadDocs/publications/Document/Annual_report_0708.pdf Gambling Commission. (2008g). Retrieved October 12, 2008, from Single Machine Application for a Permit: Guidance Notes: http://www.gamblingcommission.gov.uk/UploadDocs/publications/Document/Notes-SM_App_for_a_Permit.pdf Gamblng Commission. (2008a). Retrieved October 12, 2008, from Gambling Industry Statistics. 2007/2008: http://www.gamblingcommission.gov.uk/UploadDocs/publications/Document/Industry%20Statistics%202007-08.pdf HMRC. (2008). Retrieved October 12, 2008, from About Us: http://www.hmrc.gov.uk/menus/aboutmenu.htm Luo, X., & Bhattacharya, C. (2006). Corporate Social Responsibility, Customer Satisfaction, and Market Value. Journal of Marketing , 70:1 - 18. McGuire, J., Sundgren, A., & Schneeweis, T. (1998). Corporate Social Responsibility and Firm Financial Performance. Academy of Management Journal , 31(4):854 - 872. National Lottery Commission. (2008). Retrieved October 12, 2008, from About the National Lottery: http://www.natlotcomm.gov.uk/CLIENT/content.ASP?ContentId=20 Ofcom. (2008). Retrieved October 12, 2008, from Wales and PSB: http://www.ofcom.org.uk/ Office of Public Sector Information. (2008b). Retrieved October 12, 2008, from Gambling Act 2005: Part 3 - General Offences: http://www.opsi.gov.uk/ACTS/acts2005/ukpga_20050019_en_4 Office of Public Sector Information. (2008c). Retrieved October 12, 2008, from Data Protection Act: Part I Preliminary: http://www.opsi.gov.uk/Acts/Acts1998/ukpga_19980029_en_2#pt1-l1g2 Office of Public Sector Information. (2008d). Retrieved October 12, 2008, from Gambling Act 2005: Part 4 - Protection of Children and Young Persons: http://www.opsi.gov.uk/Acts/acts2005/ukpga_20050019_en_5#pt4 Office ofPublic Sector Information. (2008a). Retrieved October 12, 2008, from Gambling Act 2005: http://www.opsi.gov.uk/Acts/acts2005/ukpga_20050019_en_1 SOCA. (2008). Retrieved October 12, 2008, from Proceeds of Crime: http://www.soca.gov.uk/ Read More