"Not everything that can be counted counts, and not everything that counts can be counted." --Albert Einstein
It is certainly no secret that the supposedly recession-proof gaming industry has not escaped the ravages of the current economic downturn. Even in those fortunate venues which have not experienced a drop in patron visits, win per customer is often down. Dismal numbers have the same impact in gaming as anywhere else. Operators and manufacturers will look long and hard to find ways to slash costs. It’s the old adage “If you can raise the bridge, then lower the water.” One area that can be vulnerable at such trying times is compliance. After all, it’s expensive and doesn’t produce revenue. Moreover, effective compliance people are good at finding fault, which can cost additional time and resources to fix. Even if compliance staff is not reduced, more senior and experienced personnel can be replaced by less costly new hires.
On the regulator side, many state jurisdictions have faced very difficult fiscal challenges of late and have responded by imposing broad hiring freezes and furlough days. Additionally, travel and training budgets may be reduced or eliminated, which can impact the ability of staff to stay current with important industry developments. Finally, important programs or reviews may be postponed or curtailed.
Of course, from the perspective of a former regulator, all this strikes me as a classic case of being “penny wise and pound foolish.” Like not regularly changing the oil in your Hummer or not visiting the dentist, it can only end badly.
I realize that tough times require hard, cost conscious decisions. But, reducing compliance efforts, whether on the industry or regulatory side, is a false economy. Poorly regulated casino operations not only create an opportunity for the crooks, it can potentially impact public confidence in gaming.
Of course there is always the possibility that I might be exaggerating the peril. So I’d like to hear from the regulators and compliance persons out there.
How has the current economy impacted your agency or company? What cost savings measures have been proposed or implemented? What steps have been taken to minimize the impact of budget reductions or restrictions? What, if any, has been the impact on your programs?
Postscript: Beyond this topic, I’d like to hear from regulators as to any of the issues and problems that you’re experiencing. My goal is to use this Blog space as a forum to raise and discuss matters of concern to the gaming regulatory community. Please feel free to email me at tnelson[at]grcgaming.com. All communications will be treated as confidential unless otherwise specified.
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