Responsible Policy on Responsible Gaming

Good morning and thank you for that warm welcome. As many of you know, Frank Fahrenkopf remains actively involved in electoral politics in his role has co-chairman of the Commission on Presidential Debates. And, as you can imagine, he has a lot on his plate in the next few weeks. Frank has asked me to apologize for his absence. As a co-founder of this organization, he regrets not being able to be here in person to show his support.

However, I must admit that his loss is my gain, because although I’ve never practiced gaming law, I am, as my job title makes clear, very heavily involved with the gaming industry. And, for a day at least, I can finally prove to my father that all of those dollars for law school are being put to good use.

More importantly, it is my gain because I’m able to speak to you about something I consider very important to the industry. Something the American Gaming Association is very proud of.

As many of you know, last year the AGA adopted a Code of Conduct for Responsible Gaming. Last week marked an important milestone for the code. On Sept. 15, the code took effect, a year after its adoption by the AGA’s board of directors. On behalf of the AGA, I want to formally thank those of you in this room who played a role in the development of the code, and in a few minutes you will hear directly from two of them. 

Today, I want to share details of the code as well as give you a short description of where we’ve been, what we’ve done and what we see in the future with regard to responsible gaming practices.

Let me begin with a brief history that can help put our latest efforts on the code into context. Just like in the 1990s, when casinos expanded well beyond Nevada and New Jersey, the latest gaming expansion has created new controversy surrounding our industry. Obviously, we have become a bigger target — for opponents, for Congress and for the media, among others.

One of those “others” is the trial lawyers. As Frank reported to this group two years ago, our widespread expansion over the past 25 years has made problem gambling a more prominent issue and created an uncertain legal climate in the United States. David Stewart from Ropes & Gray, a law firm that has represented many companies in our industry on problem gambling-related litigation and is a consultant to the AGA on this issue, is here to give you an update on the latest in this area.

 [David]

Thanks, David. While we may have faced challenges, expansion has brought significant benefits also. All surveys show the public now considers the industry part of the mainstream economy, and most of the myths about the social and economic damage we allegedly would cause also have been debunked. That is not to say those myths do not continually resurface — we have the Internet to partially thank for that — but the proof is in the positive experiences in gaming communities.

Part of our success can be attributed to our response to problem gambling. Unlike other industries that have dismissed the negative social impact of their activities or products, the gaming industry has long seen we have a greater responsibility when it comes to problem gambling. 

That is not to say every company has done a great job or that we did all that we could, but the industry has a record of taking the issue seriously. In fact, when the AGA was created almost a decade ago now, one of the first commitments Frank made, as the new president and CEO of the AGA, was to deal with the issue forthrightly.  The industry seeks to be a responsible corporate citizen, and responding to the few people who do not gamble responsibly is critical to fulfilling that role.

As I have said, the industry has for many years implemented responsible gaming programs, but we felt it was time to codify the best of what we had been doing and to take a pro-active, industrywide approach. The AGA, in its role promoting industry best practices, led an effort to create a comprehensive set of guidelines governing nearly every operational aspect of the U.S. casino, from employee training to alcohol service to advertising. The effort began with a small group made up primarily of representatives from legal, public relations and government affairs departments. You can imagine the challenge of balancing the varying needs of a diverse group of operators and manufacturers, while creating a code that would pass the ha-ha test (I believe that is a legal expression, isn’t it David?) After nearly a year of meetings and drafts too numerous to count, we were able to create a single document that eventually would become the AGA Code of Conduct for Responsible Gaming. The final code was adopted Sept. 15, 2003, by the AGA board of directors. The code gave member companies one year to put the provisions in place.

The code does what its name implies — it “codifies” a broad range of practices throughout our industry. For some companies, it simply reinforced existing practices. Others have needed to augment their practices to bring them up to the standards spelled out in the code. The industry as a whole benefits because it not only standardizes our practices but also sets the bar high.

For employees, our companies have all pledged to provide responsible gaming training and refresher training, share informational materials and post signage that will increase their understanding of this issue as well as the company’s relevant policies and procedures.

For patrons, our companies have all pledged to promote responsible gaming by prominently displaying on the gaming floor and on company Web sites educational materials, help line numbers, and information about the odds of winning or losing at various games offered by the casino. We also have formalized our commitment to provide patrons with the opportunity to request that they be excluded from casino privileges such as casino-issued markers, players clubs and check cashing, as well as from the casino itself. It’s noteworthy that our companies also have pledged to serve alcoholic beverages responsibly, helping to ensure that nobody who is visibly intoxicated is served alcoholic beverages or allowed to gamble, and alcohol is not served to anybody under the age of 21.

In addition to renewing our commitment to prevention of underage gambling and unattended minors in casinos, the code establishes a standard for casino advertising that goes beyond the standards set by federal and state laws. Our companies also have committed to include responsible gaming messages and/or toll-free help lines and not allow the ads to appeal to anyone under the legal gambling age or contain claims or representations that gambling will guarantee financial or personal success.

The AGA is not charged with monitoring our members’ implementation of this code, but within the code there is a provision that specifically calls for each company to conduct annual reviews of its compliance. Although the code doesn’t have the force of statutes or regulations, our industry has taken it very seriously. Every company and every state has an approach that’s appropriate for its own unique set of circumstances.

As an example, Bernie DeLury will share with us the steps Caesars has taken in this process.

[Bernie]

Thanks, Bernie. A similar process has taken place at Boyd Gaming Corporation, which has 18 properties in six states. They, too, have established a corporate responsible gaming committee to provide oversight, and several properties have formed their own committees or put other policies in place to ensure their adherence to the code, including quarterly on-site reviews to address any new issues.

In Missouri, the state association has taken the lead to ensure that all the casinos there are in compliance with the code. The association’s Responsible Gaming Committee conducted an audit of all 11 casinos in the state. In each case, a representative from the association and a company other than the one being audited visited each casino and went through every provision of the code. The audit included a review of all ads, signage and other code requirements. Those properties that didn’t meet every provision of the code during the initial audit agreed to correct any shortcomings so that all of the casinos were in compliance by Responsible Gaming Education Week — more than a month before the implementation deadline.

Manufacturers who are members of the AGA — including IGT, Alliance, WMS, Mikohn and others — also played an active role in the development of the code. Although they don’t have the same operational issues of a property, they have to be concerned with their own customers — the casinos — as well as their employees. The code specifically indicates whether a provision applies to “AGA members” or just “AGA casino companies.” So, for example, the code calls for all companies, including manufacturers, to provide employee training, post signage, offer educational brochures and include information about responsible gaming on their Web site, among other requirements.

The AGA has supported these efforts at all levels by providing tools for our member companies to use to help them in the implementation of the code. One of the most important resources developed for our members was an online resource guide. This electronic tool kit on our Web site spells out every provision of the code, with many providing links to additional resources and best practices, including print publications. One of those publications is a new odds brochure, which provides information generally explaining the house advantage for the various games offered by the casino — another specific requirement of the code. We also chose this year to highlight the code during our annual Responsible Gaming Education Week and make it the official start of the countdown to its implementation.

In the coming months, the AGA will be working to provide our member companies with additional tools that will keep them ahead of the curve on efforts to promote responsible gaming. One project under way is the development of a responsible gaming public awareness program.

Another project currently under way is the development of a certified online employee-training program by Harvard Medical School’s Division on Addictions. It’s important to note that this will be the very first employee training program developed that utilizes techniques and information garnered from almost a decade of scientific research. This valuable resource will be available to gaming industry employees worldwide by December.

The online training program is one more example of the increasing value of the research conducted by the National Center for Responsible Gaming. And, that value is acknowledged in our code with the pledge to continue funding the National Center. While we have funding commitments of $13 million so far, we know that we have only tapped a small fraction of the gaming industry in the U.S. and abroad.

[As a side note, all of you have received in your registration packets an invitation to the National Center’s annual conference on problem gambling in Las Vegas Dec. 5-7. I encourage all of you to attend this important gathering of scientists, researchers, regulators and policy-makers.]

 So, as you can tell, our industry is proud of the work we’ve done to help those who need help. We are also proud that our efforts have been informed by scientific research. The AGA has made a commitment to finding real solutions to the challenge of problem gambling. The programs we undertake, such as the Code of Conduct and online employee training, are built on the best science available. We will continue to not only fund cutting-edge research, but remain open to finding and implementing proven new approaches.

Let me close by again thanking the people in this room for their commitment

to responsible gaming. It is an exciting to time to be a part of this industry. We have the best entertainment value in the nation. We provide great jobs for great people. And, with commitments such as those we make in the Code of Conduct, we prove we are responsible corporate citizens.

Thank you.