Regulators and ESG

Discrimination is something that is frowned upon, indeed unethical, in most corporations these days, including those that operate in the gaming industry. Yet for women, it still persists. Why, then, do not regulators address it in any meaningful way, asks Richard Schuetz.

Regulators and ESG

Sustainability is no longer about doing less harm. It’s about doing more good.—Jochen Zeitz, Chairman & CEO of Harley-Davidson, Inc.

One of the subjects dominating the business world is the topic of environmental, social responsibility, and governance (ESG) concerns. These topics are considered to be important headings to utilize in evaluating investment decisions. More and more, businesses are utilizing the methodology of ESG in developing their strategic goals and they are finding this exercise often enhances long-term value. The group that appears to be lacking in developing greater attention to ESG is the gaming regulators. This is unfortunate.

An area where the regulators could have a meaningful impact is in enhancing diversity and inclusion, areas falling within the broader topic of social responsibility in the ESG model. Regulators could make positive changes here and barely need to break a sweat.

If a casino company were to pay a man 100 percent for a jackpot he had won and then pay a woman 80 percent for hitting an identical jackpot, that casino company would be in trouble with the gaming regulators. Moreover, if a casino were to only allow two women to enter the building for every eight men who entered, that casino would be in trouble with the authorities.

If, however, a casino company was to compensate its 10 highest-paid male executives a multiple greater than what it paid the 10 highest-paid female executives, this would be seemingly cool with the regulators. Moreover, the reality of casino company board rooms is that they are overwhelmed with way too much testosterone and, again, this seems just fine with the regulators.

There is no questioning the reality that there is nothing approaching a level playing field between men and women when it comes to career opportunities in gaming. Moreover, gender-based salary differentials are a very real and demonstrable thing.

What is fascinating about this is the gaming regulators do not seem to notice. In this day and age, the regulators’ constituencies are essentially the industry and politicians, and it seems they could care less that a class of people within the casino industry is treated as second-class citizens. I would suggest anyone who believes regulators are paying adequate attention to gender discrepancies is in LaLa Land.

Some regulators may argue that becoming involved in industry gender discrimination issues is not within their remit. Nonsense.

In the 1950s and early 1960s, black people were not allowed in Las Vegas Strip casinos and the casino operators were cool with this, for they caused it and enforced it. Other segments in the Las Vegas community, however, found this blatant discrimination morally repugnant. Two people who found this to be reprehensible were the governor of the state, Grant Sawyer, and the chairman of the Nevada Gaming Control Board, Ed Olsen.

What Ed Olsen did with Governor Sawyer’s blessing was deputize two black schoolteachers as agents of the NGCB and had them enter a Strip casino and walk about. As these individuals were escorted off the property by the casino’s security officers, Chairman Olsen notified the leadership of these casinos that they violated a condition of their gaming licenses that mandated they could not bar agents of the NGCB from observing the operation of casino games (noting that plain-clothed agents were a reality of casino inspections). This act combined with other efforts within the Las Vegas community and beyond set the course to integrate the Las Vegas Strip casinos.

It is also common within gaming states to encapsulate within the regulatory or legislative packages relevant to gaming the notion that the participants in the industry operate with a high level of character, honesty, and integrity; and that the operators maintain a suitable means of operation. This indicates that our regulatory agencies think that paying women less than men and limiting women’s promotional opportunities are suitable means of operation and consistent with possessing a high level of character, honesty, and integrity.

I call “Bullshit.”

Unfortunately, our regulators are operating with a model relevant to an industrial reality over 50 years old. It is hopelessly antiquated and certainly not fit for today’s purposes. While they are busy protecting the public and industry from some dated notion of organized crime, they have missed one of the real crimes of the modern era. That is the industry’s practice of allowing some classes of people to be treated as if they are inferior.

I believe that what is stopping the regulators from addressing the discrimination against women is an absence of moral fiber or fear. They accept this as a suitable means of operation and consistent with character, honesty, and integrity because they fear upsetting the industry and/or the politicians. Or maybe they just believe that women are inferior.

If there are some regulators out there who believe it is morally reprehensible to support a system that legitimizes a second-class status for women and who are not terrified about upsetting the industry and its politicians, here is a plan: Make all of your operators quarterly file their employment statistics that address promotional opportunities and wage and salary data by job class and gender. Put these statistics on the regulatory website and send each quarter’s results to the state legislature and local press. Moreover, address these statistics in all hearings involving the licensee and condition licenses to demand improvement if they are failing. Oh, and get a qualified data theorist in the mix to ensure that the books are not pre-cooked in the methodological design of the presentation.

Do this and you are on the way to being a part of the solution and not a part of the problem. It is the right thing to do and will help ensure that you are enforcing that the industry participants are operating with character, honesty, and integrity, and with a suitable means of operation.

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.