Putting a lid back on Pandora’s box

Twenty years or so ago, I. Nelson Rose wrote a piece about the spread of gaming.  At that time, Nelson said that we were in the beginning of the third wave of gambling expansion in the United States.  Each of the first two phases had ended because of change in public attitudes caused by some event or series of events – because of corruption, like that of the Louisiana lottery in the 19th century.  Professor Rose said he thought gaming would continue to spread in the United States until some major event changed public attitudes again.

That was a long time ago in terms of gaming expansion, the National Indian Gaming Regulatory Act had been passed, but Indian gaming was just beginning.  Gaming was just creeping out of the shadow and control of Nevada and New Jersey and seeping into mountain towns and mid-western and southern rivers.  Now, in 2012, gaming has reached most states; most metropolitan areas have gambling and soon, via the Internet,it will be living in your (and mine) living-room.

When Nelson wrote his third wave theory with its warning I could see the possibility of a scandal, that one big event that would a change public attitudes; but as the expansion continued it no longer seemed possible to me.  One scandal in one state regardless of its size would not have much of an impact on public sentiment in other states; no more that a corrupt governor in Illinois causes a change in politics in California.  And in gaming in this third wave, this mature and vastly larger third wave, there are many more types of gaming than in the first two waves.  In the first and second waves lotteries dominated gambling in the United States and lotteries shaped public opinion.  Today there are horse races, bingo games, slot machines in bars, casinos, poker rooms, lotteries and keno games running around willy-nilly. A scandal in keno in Nebraska would have absolutely no impact on the public’s perception of gambling in Massachusetts and Maryland as those states seek to expand their gambling offerings.

What could possible end this wave of expansion and cause the process to reverse itself as it did in the 19th century?  Seemingly nothing.  Well, almost nothing.  There are other examples that one might cite where there were dramatic changes in public attitudes and public behavior – waves of expansion that crested and broke.  For example, what caused prohibition?  Like gambling, drinking in public had been spreading for  most of the 19th century, it  became more acceptable and more of focal point of public behavior.   But in the aftermath of World War I, American attitudes changed and alcohol became a prohibited thing – as gambling was at that time, although prohibition did not last in shows that major switches in public attitudes is possible.

Another example is smoking –  once upon a time in the 19th century, for example, smoking was not at all common; women rarely smoked at all and men did not smoke in public or often.  Even when people did smoke, it was isolated and controlled; after dinner in high society the men retreated to another room and smoked a cigar or a pipe and then returned to the women; in a more rural world they sat on the porch to smoke.  Until the second decade or so of the 20th century, people did not smoke often.  They did not, as they came to do, smoke constantly, at work, while eating in a restaurant, driving a car, holding a baby, sitting in a movie, standing in line in a grocery store, in the bathroom, on a walk or talking on the phone to a friend.   Over time that changed – people did smoke while doing all of those things – cigarettes became silent, almost unnoticed, companions to everything and every one; actors smoked, teachers smoked, doctors smoked no place was free of the smell or the dangers of cigarette smoke – but that wave too crested and broke.  It was not a scandal, but lung cancer that brought a change to public attitudes and public regulation of smoking – smoking was indeed another wave.

That is where I think we might look for the cresting of this third wave of gambling expansion.  Last week the story broke about Zynga putting real money wagering on Facebook.  This week I saw a story about slot machines on iPhones in the United Kingdom – it is also the only place the Facebook gambling is legal at the moment.  As ubiquitous as cellular phones are these days, and as common as all of the game playing apps are, one can envision a time when people will be gambling as casually as they once smoked cigarettes.  When that time finally gets here, then the possibility of a drastic change in public attitudes will exist; at that point, Nelson’s theory will be very relevant again.  When I was 16 years old and a smoker, I could not have imagined a world where smoking was illegal in  public places – but that time has come.  I can now envision that cell phones could lead us to a similar time for gambling.   Already there are laws limiting cell phone use because it is distracting; maybe there will be a time when gambling on a cell phone is seen as being as harmful as smoking a cigarette.  I think the time will come when we will say about gambling that there is simply too much and that it is harmful; then we will say that we need to roll back the expansion and put Pandora’s toys back into a box of some kind.

IPhones Become Mobile Casinos by Adding Real-Money Bets
 IPhone users will soon be able to gamble with real money on virtual slot machines, trying their luck with the swipe of an index finger…Big Fish Games Inc. is introducing a version of its gambling application Big Fish Casino with real-money betting in the U.K., where it is legal, the Seattle-based company said. It will arrive in Apple Inc. (AAPL)’s App Store in the coming weeks, and Betable Ltd., a London-based partner of Big Fish, will process bets in the program. Douglas MacMillan, Bloomberg, 8-21-12



3 Responses to “Putting a lid back on Pandora’s box”

  1. 1 rexdstock1 August 21, 2012 at 5:36 pm

    Before I gets to reading this, I thought I would send you some minutes from an insider’s (so-to-speak) discussion that involved the investment company in Minnesota.  They look like they have a solid track record, AND, and that they have models built that tell them what equates to distressed assets (usually because the company is in bk!), and I would think their implied background in gaming (serving on boards) might mean the learning curve/discussion with them might not be too painful…



  2. 2 rexdstock1 August 21, 2012 at 5:40 pm

    We seem to be hoping that gaming will remain attractive because of nostalgic glimmer… Muy dangeroso…


  3. 3 Ken Adams August 22, 2012 at 10:22 am

    Not hoping for anything – just trying to understand the events unfolding before us. It does make me uncomfortable – the expansion without limits – because nothing can expand forever. There is always and end – and some of the ends can be very painful, ask a dinosaur. The big ones got bigger and bigger, hungrier and hungrier – if nothing had stopped them they would have been forced to eat everything and then sit while the planet died. Instead some outside force killed them and the majority of other species on earth, only the little ones hiding under the rocks survived. Nothing is without limits; this expansion is driven not by human logic, but the logic of the technology. It demands that we do the next logical thing – create the next logical apt. It is getting larger and larger, hungrier and hungrier – and one day there will not be enough food on the planet to feed it.

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