Casino Taxation in Macao: An Economic Perspective

Macao’s gaming industry has experienced dramatic growth for 8 years, yet with certain social costs due to compulsive gambling. The government has come under pressure for tax cuts even though its gaming receipts are falling relatively to the casino retained revenue. The request for tax relief is triggered by a recent decline in net profit despite fast growing gross gaming revenue under favorable market conditions. This is very likely caused by a substantial hike in casino operating costs due to increased competition and might also signal the presence of the principal-agent problem. Given the regressivity of gaming tax with respect to net profit, it is no surprise that casinos with lower profitability are more prone to seek tax cuts. The source of Macao gaming profit hinges on three distinct factors: rising demand from China, monopoly location for casinos, and market structure of oligopoly. These factors provide economic justifications for the current tax regime of Macao with a strong ability to pass tax burdens on to massive visitors. The government relies on casino tax revenue to deal with gambling related problems and promote local diversified development. Pushing for tax variability may create policy instability, business uncertainty, and unpredictable prosperity in the long term.     

Credit play and casinos: Profitability,legitimacy, and social responsibility

The purpose of this paper is to explore casino granted credit in both the business operation of a casino and the regulatory and statutory structure in which casinos operate. How credit policy is developed, how it is implemented, and how it might be abused are explored for the existing statutory and regulatory structures which prevail for the Nevada and Atlantic City casino industries. Casino credit policy in other countries is discussed, and various alternative approaches to the casino credit issue are examined. Parallels to other forms of credit allowed in other businesses, such as bank credit and retail credit, are made. Finally, alternative regulatory policies to deal with credit play are outlined, in terms of their likely effect on both the business and economic performance of casino operations, and the likely effects on players, the regulatory process, and the general image of the gaming industry.     

THE DEMAND FOR CASINO GAMING WITH SPECIAL REFERENCE TO A SMOKING BAN

This study adds to the limited literature on the demand for casino gaming. The major focus is on the effect of a statewide smoking ban. A system of slot machine demand equations, one each for the three Delaware racinos (racetrack casinos), was developed. The number of slot machines at a racino, at competing in-state racinos, and income were significant demand determinants. Competing out-of-state gaming venues had insignificant effects on gaming demand over the study period. The smoking ban had a significant negative impact on demand, which was not significantly different across the three racinos. The smoking ban reduced gaming demand 15.9%. ( JEL L83)     

Urban Aboriginal and First Nations perspectives on casinos and the First Nations gaming industry in Alberta,Canada

There is a surprising paucity of information about urban Aboriginal gambling behaviours and practices, considering that the urban Aboriginal community is the fastest-growing demographic group in Canada and that indigenous people have some of the highest rates of gambling and problem gambling. Interpreting the focus group findings from First Nations and urban Aboriginal participants in Alberta, this study provides insights into urban Aboriginal and rural First Nations attitudes to gambling and the perceived value of the provincial First Nations gaming industry. Although the First Nations focus groups were aware of gambling's associated positive and negative outcomes, they were generally supportive of their communities' decision to pursue casinos. The urban Aboriginal focus group, however, identified little positive about the casinos, even if its participants supported the First Nations' capacity to pursue casino development. These tensions demand policymakers' attention.     

The money laundering control act and proposed amendments: Its impact on the casino industry

In their efforts to track unreported income, Congress passed the Money Laundering Control Act in 1985. Because they are often involved in large cash transactions, casinos were required to report on cash transactions in amounts of $10,000 or more in much the same manner as banks and other financial institutions. However, because of the unique nature of cash and chip transactions within modern casinos, the Act, or state variants of it, have created significant compliance costs for casinos. This analysis examines the implications of the Act for the casino gaming industry, and evaluates some of the recent suggested Amendments to the Act.     

Disordered Gambling among Chinese Casino Employees

A previous study suggests that casino employees are at higher risk for disordered gambling than non-casino employees. The present study examined the cognitive correlates of the gambling involvement of Chinese casino employees. These potential cognitive correlates included attitudes toward the gaming industry and gambling activities, perceived job meaningfulness, and job stress. One hundred and nineteen Chinese respondents (M = 57; F = 62) working as dealers in Macao casinos were recruited through convenience sampling to fill out a questionnaire. The results revealed that about 7% of the respondents scored 10 or more on the South Oaks Gambling Screen and engaged in disordered gambling. Path analysis showed that attitude toward the gaming industry had a positive impact on job meaningfulness, which largely explained variances of job stress among casino employees. Job stress had a significant, but weak, direct impact on disordered gambling. Though causality between variables cannot be confirmed, this study provided insights into the impacts of cognitive factors on gambling involvement among Chinese front-line employees in the gaming industry. Implications of the findings were also discussed.     

Incorporating cash flow analysis with traditional analysis for evaluating casino financial stability

Abstract

The rapid growth and greater competition among casinos has resulted in a number of firms being financially impaired while others are being forced into mergers and consolidations. Many US gaming regulators have adopted regulations for monitoring the financial stability of casino properties. These regulators typically use financial statement analysis tools for measuring the financial stability of the gaming properties. This has traditionally consisted of measures derived from the income statement and balance sheet while ignoring the statement of cash flows. At this time, there is little information on how to read the statement of cash flow, let alone how to analyze this statement. While prior studies have been mixed on the informational content of cash flow information, they conclude that cash flow information does help explain many of the changes in the balance sheet and income statement and thus helps in the understanding of changes that have taken place in a corporation. This type of information should lead to a better understanding of the financial stability of gaming properties. The use of cash flow ratios along with the traditional ratios should provide additional assurances about the liquidity and solvency of gaming corporations.     

Sexual Harassment in Casinos: Effects on Employee Attitudes and Behaviors

This study focuses on sexual harassment and job satisfaction, organizational commitment, and employee turnover among casino employees. It is the first study investigating sexual harassment in the gaming industry. Based on sex-role spillover theory it was expected that sexual harassment has less of an impact on casino employees than on employees in other industries. Six Reno, Nevada casinos participated in the study and 330 responses were generated from casino employees. The study results show that sexual harassment of and by casino employees is perceived to occur at about the same rate as in other industries. Sexually harassed employees were compared to employees who indicated that they had not been sexually harassed. Sexually harassed employees were less satisfied with their jobs and less committed to the organization. However, they were not more likely to quit their jobs. Sexually harassed employees tended to be younger, Caucasian, and in dealer positions. Hence, in addition to the well-publicized cost of sexual harassment lawsuits, the study shows that sexual harassment in casinos may well be the source of hidden costs important to human resources managers. A result of major interest was that employees who had been harassed held management responsible for not ensuring a work environment that is free of sexual harassment. Implications for casino management are discussed.     

Winners and Losers: Segmenting a Casino Loyalty Programme

Abstract

As the competition within the gaming industry continues to grow exponentially, casinos are using players club programmes as a key component of their marketing and loyalty programmes. This study investigates the relationships between casino players’ club programmes and its members. Through the use of data collected from a mail survey of 3,000 players’ club members, analyses were conducted to explore the impacts of these programmes on the creation of behavioural and attitudinal loyalty. The findings suggest fnr a number of loyalty programme members, these programmes have little impact on creating loyalty and their subsequent gaming behaviour.     

The Utilisation of Music by Casino Managers: An Interview Study

Music is ubiquitous in retail and commercial environments, with some managers believing that music can enhance the customer experience, increase footfall and sales and improve consumer satisfaction. Casino gambling is popular in the United Kingdom and anecdotal evidence suggests that music is often present. However, little is known about the rationale for music use from the perspective of casino managers. In this study semi-structured interviews were conducted with five casino managers to establish their motivations for utilising music, the factors informing their choice of music and the extent to which music is used with the intention of influencing gambling behaviour. Results showed that casino managers utilised two types of music—recorded background music, often sourced via external music supply companies and live music. Live music was often situated away from the gaming floor and used primarily to accompany participation in non-gambling activities. Recorded background music was not used with the direct aim of influencing customers’ gambling behaviour, but to create the right atmosphere for gambling and to promote certain moods within the casinos. To achieve these aims casino managers manipulated the tempo, volume and genre of the recorded background music. Casino managers also reported that some gamblers listen to music via portable music players, possibly with the intention of customising their gambling experience. This study is unique as it has provided a first-hand account of casino managers’ implicit theories with regards to why they utilise music and the roles which music is considered to fulfil in casinos.     

Native American casino gambling in Arizona: A case study of the Fort McDowell reservation

Since Congress passed the American Indian Gambling Regulatory Act (IGRA) in 1988, there has been an explosion in the number of gambling casinos located on Native American reservations. It is estimated that in 1994 the total net revenue from 81 Native American casinos exceeded $2.3 billion dollars. As the number of Native American casinos grows along with the volume of gambling activity, opposition increases from states, the established gambling industry hurt by lost revenues, and groups with moral objections to gambling. This article reports on an effort to measure the economic impact of the Fort McDowell casino located near Phoenix, Arizona. The article discusses the casino's history and current operations. Next, it explains the use of an input-output model to compute the impact of casino's income and employment effects on the economy of Maricopa County. It is estimated that the casino is responsible for 2,483 new jobs, and an increase of approximately $80.35 million in regional output. Additional information is necessary to more accurately assess both the benefits and costs of the casino. Unfortunately, subsequent efforts to collect additional data have been unsuccessful. The conclusion discusses why, and raises questions regarding Native American gaming.An earlier version of this paper was presented at the 9th International Conference on Gambling and Risk Taking, May 31–June 3, 1994, Las Vegas, Nevada. This research was funded by a FGIA grant from Arizona State University. The author expresses his appreciation to the referees who provided substantial guidance in improving the original paper. Any remaining errors are mine.     

From the Last Frontier to the new Cosmopolitan: A history of casino public relations in Las Vegas

This research examines the use of public relations by the casino gaming industry in Las Vegas, NV. Many are familiar with Las Vegas's extraordinary growth into a tourist destination and cultural icon, but few realize that public relations played a significant part in promoting this growth. Based on archival research, this paper identifies ways in which public relations activities – even when not identified by that particular title – played a role in advancing Las Vegas's casinos into the modern era of corporate ownership and international prominence.     

Casino Gambling Among Older Adults in North Dakota: A Policy Analysis

This article examined social issues surrounding casino gambling among older adults both nationally and in the state of North Dakota. An exploratory review of gambling trends among older adults and an examination of policies to protect older gamblers revealed that older adults are targeted by the gaming industry as a lucrative market (Singh et al. J Retail Leisure Property 2007, 6(1):61–68). The authors used the national literature to frame their qualitative study, which explored gambling issues among older adults in North Dakota from the perspective of six counselors trained in gambling addiction who provide treatment services in the state. Findings indicated that relatively few policies existed at the state and national levels to protect older, more vulnerable adults who gamble. Further, the six casinos in North Dakota were viewed as very effective in marketing their casino gaming opportunities to older citizens by the gambling treatment providers interviewed. Additionally, barriers to gambling addiction treatment involved lack of available services and distance to receive services in this rural state. Based on the findings of this study, social policy changes which could lead to increased protection for older adult gamblers in the state were included.     

College student perceptions of crime and casino gambling: a preliminary investigation

To gain insight into how attitudes toward casino gambling vary by an area's experience with gambling, a survey was given to 415 university students at the University of Nevada, Reno, and 420 students at the University of Memphis. Casino gambling has been legal in Reno since 1931, but was introduced in the Memphis area in 1992. Given the differences in duration and degree of integration of casinos in each area, significant differences were expected by area in respondents' perceptions of casinos and casino gambling. While some significant differences were found, the most prominent finding is the degree of similarity of attitudes of students in each university and the high percentage in each sample that associated casino gambling with types of crime. Where significant differences did exist, the findings are interpreted as supporting either an exposure hypothesis or a cultural conservatism hypothesis.     

Gambling on casinos: A political economy of Australian developments

The proliferation of commercial casinos in Australia over the past decade has transfigured the face of Australian gambling. This paper examines the implications of the precarious relations that exist between casino operations and the regulatory structures established to control them. While Australian casinos share many of the general features and problems of casinos in the United States and Britain, the Australian approach to the selection and control of casinos and the types of corporate organizations licensed to operate casinos has been quite distinctive. The various State governments also have adopted distinctly regional responses based on different moral climates, political-economic calculations and market competition. However, in their haste to secure a share of the casino market, governments have welcomed the involvement of large corporations in Australian gambling. The power of these economic forces and changing environmental conditions present a challenge to the capacity of governments to determine gambling trends in the country.     

Not in my backyard: Las Vegas residents protest casinos

Casino gambling is becoming increasingly attractive to jurisdictions facing severe fiscal crises. Evidence suggests that casinos bring jobs and increased government revenues. However, attitudes and concerns of local residents regarding the location of casinos in their community should be considered in decisions regarding casino legalization. This paper analyzes the importance of factors associated with the selection of homes by persons living in the Las Vegas metropolitan area. A random survey of 967 recent home purchasers was analyzed. Proximity to a casino is of some importance to home purchasers. As expected, purchasers of more expensive homes and those with children in the household were more concerned about casino locations than others. But casinos were not the only concern of purchasers. Crime, industrial plants, and potential nuclear waste route locations were of greater concern than casino proximity. On the other hand, casino locations were of greater concern than shopping centers and fast food restaurant locations.This research project was supported in part by funds from Clark County through U.S. Department of Energy project grant # DE-FG08-89NV10819, and the College of Business and Economics (U.N.L.V.) Faculty Research Fund of the First Interstate Bank of Nevada.     

The “Locals” Market: An Emerging Gaming Segment

One of the newest customer segments to be identified by casino marketers is the “locals” market, or local resident gambler market. This study addresses the relative lack of empirical data on the “locals” market segment. The purposes of the study are to identify important reasons for visiting a particular casino; to identify which casinos respondents visit most often and why; to gain an understanding of such behavioral variables as gambling budget, time spent gambling, and favorite game; and to determine perceptions of different casinos in the Las Vegas area. The results may not generalize across all casino markets but they do provide insight into gamblers’ activities and behavior patterns. A telephone survey administered to residents of the Las Vegas metropolitan area yielded a sample of 637 participants who gamble for a least 15 minutes once every 2 months in a legalized gambling establishment. A customer satisfaction index based on casino performance on importance variables is presented.     

Knowledge,attitudes and experiences of Macao's casino workers with regard to second-hand smoke exposure at work

This study investigates the knowledge, attitudes and experiences of casino workers in Macao with regard to exposure to second-hand smoke (SHS) in the workplace through structured face-to-face interviews with 377 workers. The results indicate that the majority of casino workers dislike SHS exposure at work, recognise that such exposure is harmful to their health, support the establishment of separate smoking and non-smoking areas for customers and would like greater restrictions than those that exist at present. The survey also found that there are statistically significant differences in knowledge, attitudes and experiences among workers of different smoking status. The findings of this study support the need for more comprehensive smoke-free legislation in casinos in Macao. The results also add to the existing evidence for smoke-free legislation across casinos worldwide.     

The Correlations of Work Conditions with Unhealthy Lifestyles and Occupational Health Problems of Casino Croupiers in Macau

The Macau economy and employment of residents rely heavily on the gaming industry. It is important that the working conditions in casinos are not harmful to the health of the casino employees. This study examines the correlations between work conditions, unhealthy lifestyles and occupational health problems amongst casino croupiers in Macau. Its findings will provide casino managers and policy makers with evidence and awareness of the workplace health risks for the casino workers. The data were gathered by a questionnaire survey of 1,042 croupiers, which represents roughly 5 % of the croupier population in Macau. Work conditions were measured by worker satisfaction towards the biological, chemical and physical elements in their work environments. Unhealthy lifestyles were measured by practices of excessive drinking, smoking, electronic game playing and addictive substance use as well as gambling. Occupational health problems were measured by experiences of work related illnesses or symptoms. Results showed that high percentages of respondents were dissatisfied with the work conditions. On average each croupier experienced 10 work related health problems in the past 7 days. Over 5 % of the respondents drank more than three glasses of alcohol a day, 24 % smoked cigarettes, 12 % took addictive substances, 14 % gambled in the past 7 days. The analysis showed that dissatisfaction with work conditions did not correlate with unhealthy lifestyles but were strongly and significantly correlated with stress-related occupational health problems (R = 0.377–0.479, P < 0.001) and other occupational health problems (R = 0.348–0.461, P < 0.001). Casino workers in Macau experience a variety of problems associated with their work conditions that can be hazardous to their health. The working conditions in casinos need to be regularly monitored and improvements such as occupational health training and enhanced health related policies can be introduced.     

Know When to Hold Them: Applying the Customer Lifetime Value Concept to Casino Table Gaming

This article considers the impact of relationship marketing in the casino gaming industry. It illustrates how 'customer lifetime value' (LTV)--the estimated profitability of a customer over the course of his or her entire relationship with a company--can be uniquely and successfully applied to improve casino profitability. Findings indicate that increasing customer retention rates for prime customers and upgrading middle-tier customers to higher-volume betting tiers can both significantly increase long-term casino profits. Implementation of such a strategy also reduces a casino's reliance on the high-risk 'junket' segment for achieving targeted revenues and profits.