For an integrated gaming resort

Over the past 15 years, I have enjoyed working alongside Korea’s government, academic and industry leaders in an effort to identify and apply “best practices” to the domestic gaming industry. Throughout this process, I have found my Korean colleagues to be exceedingly thoughtful in pursuing this process, which leads, of course, to admirable outcomes.

Today, Korea once again finds itself in an admirable position - one in which it is seeking to take advantage of the lessons we have learned from the best examples of international gaming jurisdictions, and then applying them to a unique Korean cultural context. If the nation handles this moment properly, it can effectively serve as the “northern Asia port” for the region’s tourists - a port that has yet to be determined, and one that can rival (and even surpass in many ways) the “southern Asia port” in Singapore, and the “central Asia port” in Macao.

Over the years, we at the UNLV International Gaming Institute have contemplated many of the same policy issues that Korea is contemplating. We find that all over the gaming world, policy makers express important concerns about the impacts of gaming industries. What is often missing, however, is a thoughtful application of academic research to these processes. Ultimately, relying on peer-reviewed research can help policy makers make informed decisions, using the most reliable information available.

In examining these debates and the current academic literature, it becomes clear that many use “yesterday’s lenses” to view today’s gaming industry, and many may not fully understand the dramatic transformations that have occurred in the 21st century. In particular, two dynamics are worth examining here: 1) the invention and evolution of the multi-amenity, tourism-driven “integrated resort” (IR), a development that is markedly different than earlier offerings, and 2) the evolution of the “responsible gaming era,” which has brought unprecedented attention to community issues that are important to nations like Korea.

To start with, it is very important that we understand differences between types of gaming. Today, what we call the “gaming industry” is in fact quite diverse, and the type of IR proposed in the Incheon area is quite different from that which existed a generation ago. Most germane to our discussion here, the impacts associated with IRs tend to be different (and more beneficial) than those found with other approaches.

At this stage, it is useful to invoke the work of the preeminent gambling economist in the world, Dr. William Eadington. Sadly, when Dr. Eadington passed away earlier this year, we not only lost the “founding father” of the academic field of gambling studies, we also lost a friend to Korea, as Dr. Eadington frequently lectured in this region. During these international lectures, Dr. Eadington often discussed his famous categorization of the economic benefits of casinos, noting that IRs tended to maximize benefits when compared to other forms.

Dr. Eadington further noted that these benefits could be divided into three areas: entertainment benefits, ancillary benefits and tax benefits.

The first refers to the entertainment value that is experienced by the vast majority of patrons who gamble in moderation and seem to enjoy doing so. Their benefit from this leisure experience (known as “utility” in economic terms) is important: after all, the ability to choose the things that we purchase is widely seen as a key economic force, and economists emphasize that more choice tends to be a net positive for consumers.

This becomes clear when we think of a small town with only one restaurant - adding a second restaurant means that locals do not have to eat the same food every night, and their leisure experience is thereby enhanced. The second and third benefits described by Eadington are a bit easier to quantify. These are the ancillary benefits of casinos, and the tax revenue generated by casinos (the latter, of course, are particularly countable, and can be dictated by policy makers). Typically, ancillary benefits include job creation, investment growth, tourism development and economic development or revitalization. Importantly, the IR development currently being contemplated in Incheon is noted by Dr. Eadington to be particularly effective on each of these measures - in fact, they tend to be the most effective approach to the gaming business according to his typology.

This is due in part to the direct impacts of these facilities’ gaming and non-gaming amenities, but it is also due to the synergistic effects that help these combined entities create a tourism draw to the area.

Of course, these debates also need to address costs, and here we come upon another important historical point: We find ourselves living in what might call the “modern responsible gaming era,” set against a backdrop of new, progressive approaches to consumer protection more generally.

In this era, responsible gaming is a significant policy consideration - one that is actively engaged from the moment gambling expansion is suggested. Here, Korea has been a leader, sponsoring several international conferences (conferences that I have been fortunate to address, and at which the level of expertise is striking) while supporting strong treatment and research approaches to this important community issue.

Fortunately, as often happens when a science evolves, problem gambling researchers, clinicians, prevention specialists, government officials and even casino operators are increasingly informed by a growing body of reliable research. By any reasonable measure, this is a field that is getting better - which is not to suggest that it is perfect, of course, but this is certainly the most advanced era in history when it comes to our understanding and treatment of problem gamblers.

Based upon these observations, there is reason for optimism in Korea. Should the country decide to move forward with the development of an integrated resort, this facility’s tourist-oriented nature (with its foreigners-only casino), along with Korea’s globally recognized research, problem gambling treatment programs and responsible gaming approaches, should lead policy makers and citizens to have confidence that this process can and will constitute a “best practice” approach to gaming development.

*The author is the executive director of the UNLV International Gaming Institute.

by Bo Bernhard