Good morning.  It’s wonderful to be representing the U.S. casino industry here in Cannes, and I’m pleased to have the opportunity to hear about how my colleagues from around the world are coping with the many challenges we face in common. I’ve titled my talk “Harm Minimization”: A Call to Action for the International Gaming Community because I’d like this speech to mark the official beginning of an ongoing dialogue among all nations with legalized casino gambling that will see us working together to address the challenges we foresee as well as explore the opportunities we share.

Before I begin, I’d like to tell you a little bit about the American Gaming Association, since many of you may not be familiar with who we are or what we do.  The American Gaming Association, or AGA, was formed seven years ago as a national trade association for the commercial casino industry.  In this role, our organization represents the leading U.S. casino operators and U.S. and international equipment manufacturers on federal legislative and regulatory issues.  We serve as the national voice for the industry, and our mission is to help people better understand the gaming-entertainment industry by bringing the facts to the public, to elected officials and to the media.  We also work to address national issues such as problem gambling and to develop industrywide programs to deal with these critical issues. I hope you are also aware of the successful launch of Global Gaming Expo, our annual trade show and convention held every fall in Las Vegas, organized in conjunction with Reed Exhibitions.

In the United States, our industry is still relatively young.  In fact, little more than 10 years ago casino gaming was only legal in two states.  But, while we were a little slow to start, we’ve grown dramatically, as has the industry around the globe.  Expansion, coupled with growing acceptability of the industry and various economic pressures in local communities, led us to the current state of the American gaming industry.

And, I am happy to report that, according to our most recent state of the industry report, our industry is stronger than ever.  Despite a slow economy and unprecedented challenges to the global tourism industry last year, the overall American casino industry grew by nearly 5 percent last year, with gross revenue of more than 25 billion dollars, and provided nearly 400,000 American jobs.

In addition to financial growth, our industry has also experienced a growth in its level of acceptance among many groups, most importantly the American public.  According to our survey, 79 percent of Americans believe that casino gambling is an acceptable form of recreation for themselves or others.

While our industry’s growth and acceptance have made casino gaming a mainstream entertainment alternative in the United States, at the same time it has made us a higher-profile target for our critics.

In the United States and, I would imagine around the world, our industry has always had to overcome negative stereotypes.  In the U.S., our “colorful” past - perpetuated by Hollywood movies such as “Casino” and “Bugsy” -means we must constantly contend with a somewhat hostile and skeptical political leadership, media and, at least initially, the public. Our critics have been vocal from the very early years of our growth. We saw the first example of this in America when casinos began to expand beyond Nevada and New Jersey.  As casino gaming grew beyond those borders, opponents of gaming became more mobilized.  They began to develop grass-roots efforts to combat further expansion of our industry.

These activists are part of a small but vocal segment of the population that is either morally opposed to gaming or who simply accept the stereotypical arguments against gaming - the “my-mind-is-made-up, don’t-confuse-me-with-the-facts” crowd.  These two groups form a formidable opposition in the U.S.  Recognizing that moral indignation didn’t sell to the broader public, they developed entire reports devoted to bogus statistics contending that gaming increased crime, caused the break up of families, destroyed communities. In one case, we were even accused of reducing the donkey population in one Western community by 50 percent - from two donkeys to one.  In other cases, we were accused of causing the Asian financial crisis and of destabilizing the U.S. military.  Other so-called social cost arguments are still being used today.

These allegations against the industry were behind the call in the mid-1990s for a comprehensive study of the gaming industry in the United States.  We approached the National Gambling Impact Study Commission as an opportunity for our industry to set the record straight on a number of issues and dispel the myths and stereotypes about our business, many of which had been spread by our opponents.  We were never concerned with the commission findings, as long as the process was fair and balanced. We were not concerned because we knew, as those of you in this room know in your own cases, that the truth would be on our side.

After an intensive two-year examination of the industry, the allegations of the critics were not validated. The commission confirmed that commercial casinos did bring important economic benefits to their communities.  It recognized the industry’s place in mainstream culture.  And it confirmed that gaming does not cause bankruptcy, crime or the many other social ills critics like to blame on the industry.  This outcome was as good as we could have hoped for, but, as with any of our successes, it did not slow our critics down for long.

Just in the past year, the American casino industry has dealt with many federal legislative challenges, including proposed bans on legal college sports betting, cash-access machines on casino floors and Internet gambling.  All three remain under consideration by the U.S. Congress.

Now, as more than 10 states consider expansion of legalized gambling in the U.S., the industry is once again in the news, and our critics are more visible.  Although the moral argument against gambling does not hold sway with the majority of the American public, opponents have had some success when using problem gambling to advance their arguments, and that issue has now taken center stage.  

These multiple threats have not occurred by happenstance.  There are a myriad of critics out there who are working to short circuit the casino industry.  First, there are the legislators who look at us and see dollar signs.  They see increased revenues for their jurisdictions through increased taxes for us.  In Illinois, for example, legislators recently approved an increase that would set the tax levied on the casino industry at 50 percent.  At this unprecedented rate, the nine casinos in Illinois would contribute more tax revenue to their state than the entire casino industry of Nevada, which includes about 250 casinos. 
  
Religious leaders, opportunists like the American trial lawyers who had recent success against the tobacco industry, and a host of other critics are also working to derail the commercial casino industry.   

And unfortunately, these opponents are not working in isolation of each other.  The extraordinary advances in communications technology and the Internet have made information sharing easier than ever before.  And consistent media coverage of our industry and its many critics only adds to this wealth of information.  When one opponent’s tactics achieve their desired effect in one part of the world, it doesn’t take long for opponents in other areas to learn of the success and attempt a similar strategy elsewhere.  The advent of instant communications has made our opponents appear coordinated even as they act independently.

And, as you are most assuredly aware, these opponents are not limiting their attacks on the industry to America.  As members of the international gaming community, you have undoubtedly experienced the pressures from these critics as well.  One need only look at the examples of what is happening right now in Australia and Canada to see the drastic impact on the industry these critics can have.

After a rapid expansion, the gaming industry in Australia was subject to a federal investigation similar to the National Gambling Impact Study Commission in the United States.  A public backlash against gambling in that country, where there are gambling machines in virtually every hotel, bar or tavern, prompted the panel to make sweeping recommendations to severely restrict gambling by measures that include mandatory clocks on casino walls to per-bet limits to mandatory “time-outs.”  Today, the Australian gaming community is still grappling with the far-reaching impact of that government report, facing so-called “harm minimization” regulations that threaten the very existence of the industry in that country.

A recent development with Canada, our neighbor to the north, also poses a major threat to the industry and points to the potential dangers we all could face as our industry continues to expand.  Just last month, the superior court in Quebec authorized the first-ever class action suit over problem gambling.  The plaintiffs are requesting as much as 625 million dollars in damages from Lotto-Quebec, claiming the provincial gaming corporation knew or should have known that its video lottery terminals created dangerous addictions.  The suit, should it move forward, will be the first time the pros and cons of gambling will be extensively debated in a legal setting.  The suit alleges that up to 119,000 Canadians are pathological gamblers.  While only 240 class members have come forward so far, the court has given the plaintiffs authorization to advertise for new members, meaning the size of the class will surely increase and prompt similar cases in other provinces and parts of the world.

The events in Canada and Australia could have a profound effect around the world.  These events should sound a warning bell to us all that our opponents are serious about shutting us down.  In the midst of our celebrations over the expansion and growth of our industry across the globe, we will come face to face with new and harsher challenges than we might have anticipated.  Who is to say that opponents of the industry in other countries will not attempt to launch attacks similar to those we are seeing in Canada and Australia?  American trial lawyers have already announced their intention to do so. Clearly, these challenges affect us all and could lead to the demise of all that we have worked so hard to build.

So, what are we, as an international industry with our future at stake, to do?  How will we protect our industry against these enemies who know no borders in their attacks against us?   I’d like to talk a little about that now.  You’ll remember that I titled my presentation “Harm Minimization,” and that’s really a play on words. As I mentioned a few minutes ago, “harm minimization” in Australia has come to represent a very real threat to the industry. What I propose is that we need to do a little harm minimization of our own.  We collectively need to take steps that will protect us from the dangers we face not only in Australia, but in all our jurisdictions.  We need to work together to minimize the harm to our industry that could result from a failure to pro-actively address problem gambling as an international issue.  We need to draw on our collective experience and take advantage of successful models that already exist for dealing with problem gambling.  With a coordinated strategy, we can minimize the harm attempted by our foes, help those who need it - which, I believe, is not an objective held by many of our critics - and secure the public acceptance that is vital to our industry’s continued success.

This is not to say that we should approach this issue merely as a defensive strategy to preserve our own bottom line.  As I mentioned earlier, the growth of our industry has left us with many responsibilities to our employees and to customers.  It is imperative that we do everything we can to inform our employees and our customers about the realities of problem gambling, and help get treatment and assistance to those who need it.  More than a protective measure, this is our social responsibility.

Before I go into the details of how we can work together, I’d like to touch on some of the things we’ve done in the U.S. that could serve as a model.  In the United States, the AGA has taken the lead in recognizing the problem of disordered gambling and working to develop programs and policies that focus on prevention, education and treatment. 
When we created the AGA in 1995, problem gambling was considered one of the most important industrywide issues.  We stated publicly, as an industry, that we recognized that there are individuals who gamble in unhealthy ways.  While there was considerable debate then about the actual numbers, we said - and I know you will agree - that even one problem gambler is one too many.

We made a critical decision when the AGA was formed to proactively address the issue as an industry.

Let me tell you how.  First, a year after we founded the AGA, we created the National Center for Responsible Gaming, or NCRG.  The NCRG is the only nonprofit organization that funds independent, peer-reviewed research on gambling disorders and increases public awareness of the issue.  To date, casino companies and related organizations have committed more than seven million dollars to the NCRG.  And the NCRG has supported more than three-and-a-half million dollars in disordered gambling research at some of the most prestigious universities in the United States and Canada.

The most important aspect of this organization was its adherence to a system of scientific peer review modeled after the federal government’s National Institutes of Health, or NIH.  The National Center’s model was so successful that the grant-making capabilities are now housed at Harvard Medical School’s Division on Addictions in a newly formed organization called the Institute for Research on Pathological Gambling and Related Disorders.  The NCRG funds the Institute at Harvard while continuing its work to improve public awareness of the problem gambling.

In addition, the AGA is working with leading prevention, education and treatment experts to develop tools that are helping our member companies educate their employees and customers about disordered gambling issues.  Today, we offer a wide array of programs, services and materials devoted to responsible gaming.  The AGA recently launched the Responsible Gaming Quarterly, a newsletter that reports responsible gaming initiatives from around the world.

And, independent of what we are doing as an organization, the American commercial casino industry has collectively given more than 13.5 million dollars in 11 states to fund prevention, education and treatment measures to address disordered gambling.

Actually, individual companies in the casino industry also fund toll-free hotlines for those in need of treatment and post those numbers throughout their properties.  They provide training for employees.  They increase public awareness through brochures and posters in their properties.  Many offer employees insurance coverage for treatment of gambling disorders, which typically is not part of standard insurance plans.

There has been some criticism that the industry had ignored this issue for too long. But the truth is, several AGA members who were considered pioneers in responsible gaming began to implement programs like these in the 1980s and early 1990s, before the AGA was ever formed. And when you realize that the American Psychiatric Association had only recognized pathological gambling as a mental disorder in 1980, you see that we had, in fact, addressed this issue relatively quickly, and made enormous strides in a short period of time.

All of our efforts have not gone unnoticed.  Following its two-year federal study of the American casino industry in the late 1990s, the National Gambling Impact Study Commission reached this conclusion, and I quote, “Perhaps surprising to some, the largest source of funding for research on problem and pathological gambling is the commercial casino industry.” Obviously, this finding was not surprising to us.  But we refuse to rest on these laurels.  We have made great progress, but we also realize as an industry that we still have a long way to go in this effort to find a solution to disordered gambling.  We are continuing to evaluate our efforts so that we can become even more effective.

One thing we have realized as we continue to develop this strategy is that we can no longer rely solely on an American approach to problem gambling.  Our industry is truly without borders now, and our solutions to the challenges facing our industry must follow suit.  Clearly, as I’m sure you know all too well, borders have not stopped our opponents from attacking us.  Our opponents think the issue of problem gambling could be the trump card they’ve been hoping for.  Working together, we’ll make sure they have to fold instead.

All this brings me back to my thesis.  Effective solutions to our problems in one part of the world will only take us so far.  The current patchwork quilt of national and international responsible gaming policies is counterproductive and insufficient to quiet our opponents.  We must work together to truly make a difference.  For example, one of the tools the AGA has developed to provide guidance to the industry, regulators and other key players is a booklet that lists responsible gaming statutes and regulations by topic within each state.

If we want to have a real impact on disordered gambling and its effect on our industry, we must develop a coordinated global strategy and response to our opponents’ attacks, which will include more tools like this booklet.

We need to pool our resources and experiences to select best practices that will benefit us all.  These best practices can serve as the guidelines for creating our unified international approach to disordered gambling.  As I said, our efforts in America can serve as a starting point, and I am sure many of you have experiences and programs that will also help us in our mission.  A great deal of research will be needed to identify these best practices, so the sooner we can get started, the quicker we can get an effective strategy in motion.

So, now we know our task, but how do we do it?  We have established that disordered gambling will continue to be an issue in every country where casinos exist, but legislative and regulatory responses to those behaviors are not as consistent.  We must be mindful of this as we work to develop a global strategic solution.

As I have mentioned before, our industry’s approach has - up to this point - focused on the 1 or 2 percent of people who do not gamble responsibly.  In the U.S., we have become a legitimate part of the solution by funding research and creating programs that directly address the problem.  But, even within our borders, approaches to address the problem can vary greatly.  Across borders, these differences are even more obvious, and could be potentially problematic.

As you know, there is little consensus among health professionals on even some of the most basic issues involved in disordered gambling.  The many terms used to define the problem - disordered, addictive, compulsive, problem, pathological - are evidence enough that we need a broad, overarching theory or doctrine to guide international public policy.

Therefore, we recommend that the industry consider an altogether new strategy for how the international gaming community deals with problem gambling.  Simply put, that strategy would be to focus on encouraging those involved in the problem gambling issue to approach it from a public health perspective.

I want to be clear that we are not calling for pathological gambling to be declared a public health problem. It by no means reaches the magnitude of alcoholism, drug addiction, AIDS, heart disease and other diseases. What we are calling for is a new approach that has proven to be successful in addressing public health problems like these.

The public health model has many facets.  It calls for studying not only the one or two percent of gamblers who have gambling problems, but also focusing on the larger population of gamblers who gamble responsibly.  In addition, a public health model would rely on science and research to guide policy development.  It would not focus only on the problems gambling creates, but also on the benefits that our industry and our casinos bring to local communities around the world.

Also, the public health approach encourages consideration of gambling activities as a continuum - acknowledging that there are stages to the problem and introducing the concept of “healthy gambling.”  The public health model fosters the importance of personal and social responsibility and calls for focus and analysis on all members of the gambling population, including the 99 percent who gamble responsibly.  Research into how and why these people can participate in gambling activities without problems will inform the research into disordered gambling.

As an industry, we have an opportunity to take the lead and begin to address disordered gambling and responsible gaming from a public health perspective.  Following this approach, we can be more confident that research, empirical evidence and solid data will guide the efforts of our communities to prevent gambling related problems, promote informed attitudes and protect vulnerable groups through responsible gaming policies.

Of course, as with any new venture, adopting this approach is not without risks.  This approach has the potential to cause problems, such as raising new ethical concerns about gambling and creating competition and conflict among health care service providers.  But the current lack of a cohesive unified strategy seems to me to outweigh these negative considerations.

The international gaming community needs to take a series of steps to develop a world public health model to address disordered gambling.  This model should be based on five overarching principles.

First, it must demonstrate our industry’s overall commitment to reducing disordered gambling behaviors through a public health framework.
Second, it must promote the use of scientific research to inform public policy.
Third, it must take necessary steps to fill any existing gaps in information and research.
Fourth, it must integrate the results of objective research into industry policies, and
Finally, it must work to educate the public and build consensus.
I invite all of you to rejoin me in Las Vegas in September at G2E 2002 to hold a working session to begin to share our best practices in responsible gaming and firmly establish the next steps in this endeavor.  Further, at G2E, we should establish a formal international coalition of industry leaders that will take the lead on this project and make development of this global strategy a priority in their daily business lives.  We must also take steps to begin the joint funding of research on problem gambling issues.  Together, we can truly minimize harm, protect our industry and ensure that we continue to provide a safe, entertaining activity for our customers.

So, this is a call to action to you, the members of the global gaming community, to join the American casino industry in working to develop a truly cooperative international strategy to address disordered gambling.  We must develop a global strategy to minimize harm to our industry and protect us from the inevitable and ongoing critics who would like to see us fail.

The international casino industry has a bright future.  We are helping to create better communities, great jobs, stable economies and happy customers all over the world.  As we embark on this new and vital mission, the American Gaming Association looks forward to working with all of you to ensure that our industry remains strong.