Introduction

In assessing the state of Canadas gambling industry, both through class

discussion and additional research, I have come to the conclusion that the
casinos are acting unethically in preying upon problem gamblers who are
addiction-prone and are most susceptible to engaging in irrational gambling
behavior (i.e. gambling beyond their reasonable means). The casinos exploit this
customer segments weakness through the solicitation of comps, which
effectively drive these customers to the gambling establishments. To illustrate my
opinion, I will assess the ethical issue, as it pertains to problem gamblers,
through the Rawlsian liberalism model, as well as evaluate the defenses ethical
and legal position on the matter through the contractarianism model.
Agents
The focal active agents that drive the ethical issue are the casinos that
choose to target this customer segment. The passive agents are the problem
gamblers, whose addiction-prone personalities are being exploited by the said
casinos.
The casinos focal motive is profit. In order to earn profits the casinos must
drive customers to their premises through marketing and advertising efforts. In
doing so, the casinos have leveraged their loyalty card programs to attain
sophisticated data on their customers the data in turn is utilized to identify high-
value clients. The issue is that problem gamblers represent 33% of gambling
revenues (R. Powers, 2013) the casinos cannot turn a blind eye to this fact nor
marginalize their role in this matter.
While this essay focuses on the actions of the casinos, it is imperative to note
the inherent conflict of interest that exists between the government and the
gambling industry; the government has the challenge of balancing billions of
dollars in gambling revenue with its obligations to the public. The difficulty of this
balancing act is evident; 1) the Ontario government spent less than $40m on
problem gambling in contrast to the $13.7B it receives from problem gamblers
(R. Powers, 2013), and 2) the Canadian gambling addiction controls are dated
and ineffective. For instance, the sole remedy for problem gamblers is to request
a self-ban a ban that is seldom enforced (Lisa Priest, 2009). However, what is
most troubling is that the Ontario government has not begun regulating the
gambling industry in a manner that helps mitigate the activities of the problem
gamblers. Without such regulations, the government is more of an accomplice to
the casinos and less of an impartial governing body consequently, the
government is not respecting its obligation to the public.
Rawlsian Liberalism
Utilizing the veil of ignorance principle, we must evaluate the economic and
social positions of the casinos and the problem gamblers. The crux of this
framework is that the stakeholders must establish standards that would be
deemed fair irrespective of which side of the coin the stakeholder would end up
on. It would be difficult to fathom casinos and their management teams favouring
1/3
rd
of their revenue coming from problem gamblers if they themselves were
problem gamblers. To illustrate the predatory actions of casinos in the context of
the alcohol industry, it would be akin to Jack Daniels soliciting samples of its
whiskey at Alcoholics Anonymous meetings. Gambling is a serious addiction, just
as is alcoholism, and should be regarded as such by all stakeholders (i.e.
casinos and governments), irrespective of where they are currently in the social
order. Consequently, just as we wouldnt consider ethical the aforementioned
hypothetical actions of an alcohol producer, neither would we consider ethical to
drive such a large fraction of revenue from addiction-prone gamblers through
exploitative marketing practices.
Contractarianism
In response to a lawsuit launched by a problem gambler, the casinos ethical and
legal position was that the "casino patrons pay for that entertainment through
their wagering, just as theatre patrons pay for a ticket to a play or sports fans pay
for a ticket to a game. Mr. Isaacs's wagering was an expenditure, not a loss that
is recognized at law." (Lisa Priest, 2009). In essence, the casino claims that both
parties are implicitly embedded in a willful and fair agreement, and that the
casino has met its obligation of providing entertainment. While this position may
very well be ethical when applied to rational gamblers, the position tells another
story when applied to the irrational counterparts.
To analyze the contractarianism ethical viewpoint of the casinos, it is important to
recognize that contracts should still be within the confines of the law (i.e. you
cannot sell your child into slavery). In the context of the implied contract between
casinos and problem gamblers, the contract law principal of undue influence
comes to mind, in which a contract may be void if it can be proven that 1) the
defendant dominates the plaintiffs will (e.g. plaintiff may be in dire straits), 2)
defendant uses dominance to push plaintiff into a contract that it would not
otherwise make, and 3) that the contract is unfair to the plaintiff.
As Mr. Isaac approached closer and closer to the end result of losing $1.2m, it
would be reasonable to presume that he began getting into increasingly dire
straits to recover his significant losses the more he played the greater were
his losses. Instead of stopping this behavior, the casinos chose to encourage
him, by providing comps to Mr. Isaac, and as a result built a stronger relationship
with him. Secondly, it would be reasonable to presume that the relationship and
the goodwill built with Mr. Isaac had influenced, and drove in part, his gambling
behavior. Thirdly, it would be equally reasonable to presume that if Mr. Isaac
assessed the end result of his gambling activities prior to partaking in them, he
would come to the conclusion that the two-years worth of gambling
entertainment is not worth $1.2m, a home, a car, and the placement on
Ontarios social insurance payees list. A critical element of contractarianism is
that both parties have entered the agreement willfully. As I have illustrated, the
casinos leveraged their resources and the problem gamblers addiction-prone
behavior to coerce the said gamblers into the implied agreement.
For these reasons, the casino may not only be acting in a manner that is
unethical but illegal as well, moreover it is my personal opinion that the lawsuits
placed by individuals such as Mr. Isaac are legitimate based on the
aforementioned reasoning.
Conclusion
Under both ethical models, as well as in my opinion, the casinos are not acting
ethically by exploiting the problem gamblers addiction-prone behavior. Moreover,
the prevalence of problem gamblers signifies that the deriving revenues from
these individuals is closer to a standard practice than to an exception. Thus,
the casinos and the government should take serious initiative, such as possibly
implementing the Dutch approach to the matter, to mitigate problem gambling
and underline the message that gambling addiction is a serious social issue, just
like alcoholism.