Pedestrian Gaming Regulatory Websites

When a regulatory agency is asked to present its market for a transparent website or a full accounting of the year’s gross gaming revenues, they usually can’t—or won’t—because they are by definition a monopoly and there is no one to force them. But former regulator Richard Schuetz has another idea.

Pedestrian Gaming Regulatory Websites

“A monopoly renders people complacent and satisfied with mediocrity.”—Nancy Pearcey

Gaming regulatory agencies are monopolies, and they offer many of the attributes of monopolies such as being slow to innovate, overpricing for services, and being somewhat indifferent to customer service needs. It should then come as no surprise that by and large gaming regulatory agency websites basically suck. I would like to make a number of suggestions that could enhance these websites.

It is important to understand I have little faith that any of these changes will become a reality for not only are many of our regulatory agencies monopolies, and behave as such, but they are also government bureaucracies and, well, enough said.

In the evolution of gaming regulation, one of the regulators’ early concerns was ensuring revenues were being properly recorded. Members of organized crime were very adept at running casinos back in the early days of the industry, mainly because they had been in that business for many years. However, it seems they were bad accountants in that they could never seem to properly capture and record gaming revenues.

This was of interest to the regulators because generally taxes were based on gaming revenues. This meant if the operator was underreporting revenues, knowingly or unknowingly, the government was being cheated out of tax proceeds—and preventing this was clearly a conduct that the regulator was empowered to prevent.

As a casino executive in Las Vegas and other locales, starting in the early 1980s, I too was interested in minimizing unauthorized detours of gaming revenues, mainly because that was my job and I was incented to do it well. What I learned from that experience was there were a great many tools one could use, but the most valuable always seemed to be someone who would pick up a phone, or otherwise contact me and point out something taking place that should not be taking place. The person making the contact could be an innocent employee who overheard or saw something, a jilted lover, an annoyed co-conspirator, or some such individual.

As an aside, it was my experience that the diversion of revenues involving employees normally had some things in common. It never seemed to involve something logical like using the proceeds of the crime to enhance their 401-K or some such rational financial goal, but rather these diversions took place to feed a beast; be that beast a bad gambling habit, an affair, a sexual escapade, a drug dependency, alcohol, or some combination of these issues. This is why casino management wants to pay attention to such things and generally has certain methods to identify employees who may be subject to needing to feed these beasts.

I also found it somewhat fascinating that in the midst of a sea of thousands of cameras, compliance tests, audits, and human supervision, a powerful tool to identify theft was someone dropping a dime on someone else—albeit the cameras were nice in that they allowed us to inspect the mess in the henhouse generally after the fox (or funds) were gone.

I mention all of this because if a regulatory agency wants a powerful tool to reveal many types of gaming crime, it should work to develop a viable whistleblower process and have it front and center on the regulatory website. Moreover, communication efforts should be undertaken to create a wide awareness of this feature. I also believe that it is important to mention this to regulators, for unfortunately, very few regulators have any real-life experience with how casinos actually work.

A second area that should be prominently displayed on regulatory websites is a listing of the members of the legislature who sit on committees that oversee gaming matters. This listing would include the legislator’s phone numbers and other contact information. If the citizens of a jurisdiction are not happy with public policies surrounding gaming, they should be able to easily know how to contact the folks who shape that policy.

Finally, every legislative member in a jurisdiction who sits on a committee that shapes gaming policy should have listed on the regulatory website all contributions and gifts they have received from gaming operators, suppliers, and the like—in those jurisdictions that allow contributions. I would guess most politicians would hate this, for it is way too transparent.

It would help, however, to address curiosities like why casino gaming companies are allowed to poison their guests and employees with second-hand smoke, and why nine gaming jurisdictions have provided zero dollars for addressing problem gambling.

It seems that while our politicians receive many millions of dollars from people involved in the gaming space, few people dying of emphysema and the like, or folks being devastated by problem gaming seem to send gifts and contributions to our politicians—and, therefore, they often don’t seem to count.

Articles by Author: Richard Schuetz

Richard Schuetz started dealing blackjack for Bill Harrah 47 years ago, and has traveled the world as a casino executive, educator and regulator. He is sincerely appreciative of the help he received from his friends and colleagues throughout the gaming world in developing this article, understanding that any and all errors are his own.