Casino gambling in Germany : development, legal conditions and the exclusion system

Abstract

The aim of this paper is to provide an overview about the German casino gambling industry as a whole and the identification of its particularities, while putting a special focus on the present exclusion system. To achieve that, the foundations were laid by examining general developments on the market as well as pointing out recent legal changes, like the introduction of the Interstate treaty on gambling and its consequences for the casinos. Additionally, the application process and the basis for regulation of the establishments have been presented in detail. This general part is then followed by an extensive description of the German exclusion system. The program was set in contrast to those present in other, especially North American jurisdictions, in order to illuminate its unique features. Secondly, the focus is shifted on the development of a profile of excluders from German casinos by examining whether the established risk factors are also significant predictors for the number of bans in German communities. To our knowledge, there is no work explicitly analyzing casino patrons. Using a unique dataset, the approach brought some interesting insights. Some of the considered variables can be confirmed to serve this task in the given framework, whilst others did not yield a statistically significant impact. The most important sociodemographic factors are male gender, being between 30 and 39 years old, and not living in a partnership. The shares of the first two variables have a positive, the latter one a negative influence. Education, unemployment, and migration status, which are usually agreed on to be good predictors, did not exhibit significant results. However, it would be wrong to neglect them, as the outcome is probably owed to noise in the data, which lowers the precision of the estimation and could lead to insignificance. The coefficients of the variables that have been included to capture proximity turn out to be significant and bigger in magnitude than those of the sociodemographic factors. Distance to the next casino and the share of exclusions are inversely related, if the distance increases, the share of bans will decrease. The dummy variables capturing immediate proximity to gambling establishments also provide evidence for this pattern. If a classical casino or an annex is present in a community, this has a positive impact on the share of excluders. Considering only the proximity dimension of availability, the results are in favor of the hypothesis that higher availability could be a predictor for an increase of bans, which serve as a proxy for PG. The additionally included control variables also yield significant results. The coefficient of the indicator for a sparsely populated region shows that the share of excluders in said areas is on average higher than in dense ones. Furthermore, the share of assistance centers in a county positively drives the share of bans. The dummy variable indicating communities in the former GDR turns out to be negatively associated with the dependent variable. This makes absolute sense, considering the different developments of the gambling markets in these two regions between 1950 and 1990. However, the magnitude of the distinct effects on the amount of exclusions is rather small and the model is only able to explain about 10% of the variation in the number of bans, which is a rather small fraction. This is very likely owed to the fact that although problematic or pathological gambling is in parts driven by external sociodemographic factors like age, gender or the marital status, a lot of the behavior is facilitated by internal predisposition which cannot be captured with this type of analysis. Nevertheless, many of the proposed risk or, more neutrally stated, influence factors can be confirmed by this approach, which has been specifically adapted to the German terrestrial casino patrons.