No gaming licensing system gold standard: UNLV paper

Jun 02, 2023 Newsdesk Latest News, Macau, Top of the deck, World  

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There is no “gold standard” regarding how gaming is regulated in different jurisdictions, irrespective of the system of law that is in place. That is the conclusion of a paper in the latest edition of the University of Nevada, Las Vegas (UNLV) Gaming Law Journal.

The piece, titled “Comparing gaming regulatory systems in civil- and common-law countries: how different approaches can achieve the same policy goals”, was written by Anthony Cabot, António Lobo Vilela, and Pedro Cortés.

Mr Cabot is a distinguished fellow of Gaming Law at the UNLV Boyd School of Law, where he directs the gaming law programme. Mr Vilela is a gaming lawyer and author of “Macau Gaming Law – Annotated with Comments”; and Mr Cortés is managing partner of Macau-based law firm Rato, Ling, Lei & Cortés, where he leads the gaming practice.

The paper compares what the authors say are the two main approaches to gaming regulation: command-and-control, such as in Las Vegas, Nevada, in the United States; and concession models, like the one in place in the Macau Special Administrative Region, China.

The article concludes that “neither model is inherently superior”. The authors state that both models “have been used with successes and failures,” and they each have “advantages and disadvantages”.

“Monaco, France, and other countries with significant casino industries have concessions rather than licences and have encountered a few problems,” noted the authors. “In contrast, the rigidity of the command-and-control model may have contributed to initial failures in Atlantic City,” in the United States.

While the concession model allows governments to tailor the “regulatory oversight to the circumstances not only of its jurisdiction but also to the strengths and weaknesses of the concession holder,” it also “has disadvantages when the jurisdiction has several casinos in a competitive market”.

“But, at their core, both systems address the essential elements of gaming regulation: suitability, auditing/accounting, and enforcement. Only the processes are different,” wrote the authors.

According to the article, comparisons of gaming regulatory systems “disproportionately focus on the process rather than outcomes”.

“While the command-and-control system may be superior in some circumstances, such as an open market with numerous competitors, the concession system has distinct advantages in places where land is scarce and the government grants shorter-term concessions because of long-term economic uncertainty,” it stated.

The paper also suggested that “the idea that a command-and-control model is a gold standard is misplaced and often counterproductive”.

“In practice, the Nevada command-and-control regulatory experience has an overemphasised influence because of its successful transition from organised crime to corporate control,” said the article.

It added: “This tendency toward extensive command-and-control regulation has led to unsustainable claims of a ‘gold standard’ and criticism that other processes, such as the concession system, are inferior simply because they lack the voluminous uniform mandatory controls.”

The authors also said that in certain circumstances, “one process may have advantages, but neither is inherently superior outside the context in which they are employed.”

“Good gaming regulation should strive to meet four primary principles: effectiveness (meets policy goals); efficiency (has the lowest economic impact and administrative cost); equity (fairly distributes burdens among players); and political acceptability,” they concluded.

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