Legalized gambling

Z1213: Ethics in Marketing and Advertising X 460 (Spring 2013)
Andre Takao | Emir Kosif | Natália Aranovich | Ricardo Aum | Vanja Djekic
Economic Boom or Social Bust
Prof. Marke Stern and Jennifer Beever

Legal Issues
• Gambling is legal under US federal law;
• Regulation by State’s Gambling commission;
• Ex: Montana: Video Poker, slot machines, Black Jack, etc;
– Approved and background checks on employees; Licenses;
Ex: Nevada: regulates 1,800 slot machines 5,000 gaming tables;
– Requires insurance on the money that comes in;
– No regulations, no money;

How Internet Changed Gambling
• No restrictions; democratic place;
• Problem; Run by computer
• States start to regulate

IS ONLINE GAMBLING ILLEGAL ?
- Is Online Gambling illegal ?
• The legality of Online Gambling;
• Technically illegal in most of the US; servers are off shore;
• Around 70 countries allow O.G. sites, including Australia S Korea and France.
• Player’s responsibility; winnings forfeit;
- Internet Funding Prohibition Act passed, after 4 years;
- Congressman James Leach
- Illegal for banks and CC transfer funds;
- Gambling = sports betting;

NO LEGAL CASINOS PRIOR 1978

SEGMENTS OF LEGALIZED GAMBLING
 Commercial casinos
 Native American casinos
 State lotteries

EFFECTS
 More jobs dispersed among more people
 No impact on unemployment rates
 A limited positive effect on some house prices
 A modest increase in bankruptcies
 More total crime but less per-capita crime
 No impact on total revenues or expenditures
 A decline in per-capita spending and revenues

FEDERAL WIRE ACT IN 1961
“Whoever being engaged in the business of betting or wagering knowingly uses
a wire communication facility for the transmission in interstate or foreign
commerce of bets or wagers or information assisting in the placing of bets or
wagers on any sporting event or contest, or for the transmission of a wire
communication which entitles the recipient to receive money or credit as a
result of bets or wagers, or for information assisting in the placing of bets or
wagers, shall be fined under this title or imprisoned not more than two years, or
both.”

UNLAWFUL INTERNET GAMBLING ENFORCEMENT ACT 2006
• Under UIGEA, “unlawful Internet gambling” means “to place, receive, or
otherwise knowingly transmit a bet or wager by any means which involves
the use, at least in part, of the Internet” in a jurisdiction where applicable
federal or state law makes such a bet illegal. 31 U.S.C. § 5362(10)(A).
• UIGEA prohibit all kind money transfer

THE FORMAL OPINION ISSUED BY THE DEPARTMENT OF JUSTICE
REGARDING THE WIRE ACT TO INTERNET GAMBLING IN 2011
In September of 2011 the state of New York and Illinois the application of the
Wire Act to interstate sales of lottery tickets on the Internet.
The DJO decided that:
• Interstate transmissions of wire communications that do not relate to a
“sporting event or contest” fall outside the reach of the Wire Act.
• Because the proposed New York and Illinois lottery proposals do not involve
wagering on sporting events or contests, the Wire Act does not prohibit
them.

FUTURE IMPLICATIONS - MARKETING PURPOSE
TARGET MARKET
• This pronunciation open a huge market for online gambling that is not
related to sports, because now states were the gambling is permitted can
increase their target market going to “sell” their gambling services for
costumers located

FUTURE IMPLICATIONS - MARKETING PURPOSE
PROMOTION
• Use credits that can be exchange in a store for a special product or service.
The company could promote games such as poker, black jack, Roulette and
the points or credits that people wins can be uses as a coupon for purchase
product or services in stores. This can help marketers to track sales what is
so hard nowadays.
• On the other hand, Studies shows that online gamblers are more likely than
other Internet users to click on ads, to be less annoyed by them and to be
more likely to remember advertising messages. They also are more likely to
sign up for e-mail marketing and to open e-mail promotions.

FUTURE IMPLICATIONS
BENEFITS FOR THE GOVERNMENT AND THE ECONOMY
• Legislators in Florida presented a study showing that legalizing online poker
could raise US$90 million annually in taxes.
• Goldman Sachs evaluated that U.S. market for online casinos and poker
could be worth as much as US$12 billion.

IS ONLINE GAMBLING WORSE THAN ONLINE GAMING?

CURRENT CORPORATE SOCIAL RESPONSIBILITY
“The gambling industry supports education and donates millions of dollars to
colleges across the United States. For example, in Georgia the Hope
Scholarships is a program created by the gambling lottery industry and gives
full scholarships to well deserved Georgia students.”

CURRENT, CHARITY BENEFITS
“The gambling industry supports education and donates millions of dollars to
colleges across the United States. For example, in Georgia the Hope
Scholarships is a program created by the gambling lottery industry and gives
full scholarships to well deserved Georgia students.”

CURRENT, CHARITY BENEFITS
• Charitable Institutions: Receiving benefits from the gambling industry for
their different causes
• Schools: Holding casino night events to raise money for the construction of
their school buildings
• Some State-Run Institutions use some forms of gambling: large bingo
games, lotteries, raffle events and charity poker events

CURRENT CODE OF ETHICS
• AMA (American Gaming Association) – Code of Conduct Established 2003
• The Code of Conduct is a pledge to employees, patrons and the public
to promote responsible gaming in every aspect of the casino business,
including employee training, customer education, the prevention of
underage gambling, responsible alcohol service, and responsible
marketing and advertising. All AGA member companies adhere to the
provisions of the Code, and its reach for responsible gaming programs in
international jurisdictions and non-member casinos across the country as
well

Sources:
http://www.gamblingandthelaw.com/
http://entertainment.howstuffworks.com/online-gambling2.htm
http://vegasclick.com/online/legal.html
http://www.coolcat-casino.com/casino-news/legal-issues-in-online-
gambling.php
http://uscode.house.gov/download/pls/18C50.txt
http://www.nigc.gov/LinkClick.aspx?link=NIGC%20Uploads/readingroom/bulleti
ns/20093UIGEAbulletin.pdf
http://www.justice.gov/olc/2011/state-lotteries-opinion.pdf
http://www.justice.gov/olc/2011/state-lotteries-opinion.pdf
http://www.nber.org/papers/w11234.pdf?new_window=1
https://www.cityofboston.gov/Images_Documents/Betting%20on%20the%20Fut
ure%20Econ%20Impact%20of%20Legalized%20Gambling%20(Baxandall)_tc
m3-35765.pdf

http://www.forbes.com/sites/nathanvardi/2011/12/23/department-of-justice-flip-
flops-on-internet-gambling/
http://www.natlawreview.com/article/doj-s-reversal-wire-act-what-it-means-
internet-gaming
http://www.nytimes.com/2011/12/25/us/online-gaming-loses-obstacle-at-justice-
department.html?pagewanted=all&_r=1&
http://www.gamesindustry.biz/articles/2013-05-01-facebook-q1-game-revenue-
up-12-percent-zynga-down-37-percent
http://www.fifa.com/mm/document/affederation/administration/50/02/82/codeofe
thics2012e.pdf
http://www.americangaming.org/social-responsibility/responsible-gaming/code-
conduct
http://truist.com/why-corporate-social-responsibility-is-so-important-in-2013/

http://www.library.illinois.edu/gaming/groups.html
http://www.tax-news.com/malta/responsible_gaming.asp
http://dro.deakin.edu.au/view/DU:30018005
http://www.flickr.com/photos/21812821@N05/5431046425/in/photostream/
http://www.casinoscamreport.com/2010/08/27/casino-getting-prepared-for-
online-gambling-legalization/

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