The comparative advantages of license-based and monopolistic gambling regimes have been discussed in previous literature from the perspective of their capacity to prevent harms, but less is known about the ability of different regimes to produce public revenue. Gambling is nevertheless an important source of revenue for public service provision. The current paper compares figures from the financial statements of two monopolistic gambling providers in Finland (Veikkaus) and Norway (Norsk Tipping), to four license-based companies operating in the Italian market (Snaitech, Sisal, Gamenet and HBG gaming) to analyze how much surplus they contribute to their host societies and what kind of factors these amounts depend on. The results show that overall, the Nordic monopolistic operations appear more effective in terms of producing gambling surplus to society than the Italian license-based companies. This difference is analyzed in terms of game product portfolios, operating costs, and levels of normal profit. The role of operating costs appears to be the most important factor explaining the lower surplus generated by Italian companies. However, the bulk of these operating costs are directed to the redistribution network which creates employment. If these employment effects are considered, both licensing and monopolistic regimes appear similarly effective. We conclude by problematizing the use of financial effectiveness as a measure for good gambling policy. High surplus collected for societies is also related to high overall gambling volumes that go against public health objectives of reducing harms.
Background
Electronic gambling machines (EGMs) are amongst the most harmful forms of gambling. The high availability of EGMs is also linked to increased consumption. To reduce the burden of EGMs on public health, policies to reduce their numbers have recently been introduced in Italy and Finland. This study compares the aims and justifications of these legislative changes, as well as their overall impacts on total consumption.
Methods
The objectives and justifications of policies to reduce the number of EGMs were based on qualitative media analysis. The impacts on total consumption were measured using financial figures provided by gambling providers in Italy and Finland.
Results
Results show that the reductions in EGM numbers were justified in terms of public health concerns in both countries, but the amplitude of policies varied. In Italy, the reductions were more ambitious than in Finland, and included reductions in the number of gambling locations. The financial data nevertheless indicated that the reductions may not have been significant enough.
Conclusions
Public health concerns were initially highlighted in the media discussions, but eventually in both countries reduction policies were less ambitious due to industry lobbying and state revenue interests. The reductions therefore do not appear to have been effective in reducing total consumption and the burden on public health.
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