The Failure to Regulate the Gambling Industry Effectively: Incentives for Perpetual Non-Compliance

Abstract

The United States has periodically experimented with legalized gambling activities. ... Taking the projected revenue model of the Emerald Casino as an example, the failure of fines as a regulatory mechanism in the gambling industry became clear. ... Eventually those governmental entities became more concerned about guarding their revenue stream than about preventing crime or other social costs associated with pathological and problem gambling: "As soon as you get this partnership between government and gambling, government becomes addicted to gambling too. ... Gambling on Indian Lands: Sovereignty Inhibited Functional Regulation ... Since Cabazon, the regulation of Indian gambling has deteriorated markedly. ... '" In this incident, which reflected a pattern of the industry in general, "[a]n Indian tribe made wealthy by its casino won swift legislative approval . . . to operate a gambling cruise ship" between San Diego and Baja, California. ... The best policy approach from a social welfare perspective is to simply re- criminalize or substantially limit all types of legalized gambling activity at the state and national levels. ... Additionally, to solve the problem of the "revolving door," a mandatory one-year cooling-off period remains needed for all persons who switch from employment as a gambling regulator to employment in the gambling industry within the same jurisdiction.