- Legal States
Svend Aage Kirk March 3, 2023 4 min read
Can the Gambling Industry Be Sustainable?
The gambling industry, like any other, has the potential to be sustainable, if it is managed and regulated properly. But what does ‘sustainability’ actually mean? Let’s first try to agree on its meaning before finding out whether it can indeed be sustainable.
Sustainability is not the same as corporate social responsibility or ESG (environmental social governance). In its simplest terms, sustainability is defined by ‘how’ a company operates and ‘why’. Does it operate by having a net positive or negative impact on the environment and society? Does it operate to serve interests that are beyond short-term profit or shareholders value at any cost?
A sustainable business will ensure that ‘success’ encompasses elements of environmental and social impact. A company cannot say it is sustainable because shareholders get value, while society pays a heavy cost for the benefit of a few shareholders.
Sustainability requires thinking large and honestly about three elements: What are the social, financial and environmental impacts of a company? What societal, and environmental issues could impact the company’s financial success? How does a company fit within environmental and societal thresholds? For example, we only have one planet, and therefore we have limits that companies should consider when operating from an environmental point of view.
The legalisation and regulation of gambling can play a significant role in the sustainability of the industry. In some countries, gambling is illegal or heavily restricted, which can lead to the growth of underground or unregulated gambling operations. These operations often lack the necessary safeguards and controls to protect consumers and prevent problem gambling, which can lead to negative consequences for both the industry and society.
On the other hand, countries that have legal and regulated gambling industries tend to have more safeguards in place to protect consumers and minimise negative impacts. These safeguards can include measures such as responsible gambling programmes, age restrictions, and strict regulations on advertising and marketing. But for these measures to work, we need to analyse their effectiveness from an impact point of view.
Another factor that can impact the sustainability of the gambling industry is the level of competition within the market. A highly competitive market can lead to lower profit margins and pressure on operators to cut corners or engage in unethical practices to stay competitive. This can lead to a decrease in the quality of services and products offered, and potentially negative impacts on consumers. On the other hand, a market with less competition may allow operators to have more control over pricing and profit margins, but it can also lead to stagnation and a lack of innovation.
The impact of technological advancements on the gambling industry is also a significant factor to consider. The rise of online and mobile gambling has allowed the industry to reach a wider audience and has increased the convenience and accessibility of gambling. However, it has also led to new challenges, such as the potential for increased problem gambling and the need for effective online regulation and security measures.
Societal attitudes towards gambling can also impact the sustainability of the industry. In some societies, gambling is seen as a socially acceptable or even desirable activity, while in others, it is viewed more negatively. This can affect the level of demand for gambling products and services and the level of acceptance of the industry within society. Other issues, such as match-fixing or money laundering, need to be addressed.
Overall, the gambling industry has the potential to be sustainable if it is properly regulated, managed, and responds to changes in the market and societal attitudes. However, the industry needs to be transparent, responsible, and considerate of the potential impacts on consumers and society to ensure long-term sustainability.
Svend Aage is a successful entrepreneur and seasoned business leader with more than two decades of management, sales, and marketing, and international business development experience across various industries. Amongst his most recent successes includes supporting Mindway AI to become a leading AI-driven tool for the early identification of problem gamblers.