Can an Industry Be Socially Responsible If Its Products Harm Consumers? The Case of Online Gambling

Online gambling companies claim that they are ethical providers. They seem committed to corporate social responsibility (CSR) practices that are aimed at preventing or minimising the harm associated with their activities. Our empirical research employed a sample of 209 university student online gamblers, who took part in an online survey. Our findings suggest that the extent of online problem gambling is substantial and that it adversely impacts on the gambler’s mental and physical health, social relationships and academic performance. Online problem gambling seems to be related to the time spent on the Internet and gambling online, parental/peer gambling and binge drinking. As our findings show that there are harmful repercussions associated with online gambling, we argue that companies in this controversial sector cannot reach the higher level of CSR achieved by other industries. Nevertheless, they can gain legitimacy on the basis of their CSR engagement at a transactional level, and so, by meeting their legal and ethical commitments and behaving with transparency and fairness, the integrity of the company can be ensured. We also argue that current failures in the implementation and control of CSR policies, the reliance on revenue from problem gamblers’ losses, and controversial marketing activities appear to constitute the main obstacles in the prevention or minimisation of harm related to online gambling. As online gambling companies must be responsible for the harm related to their activities, we suggest that CSR policies should be fully implemented, monitored and clearly reported; all forms of advertising should be reduced substantially; and unfair or misleading promotional techniques should be banned. The industry should not rely on revenue from problem gamblers, nor should their behaviour be reinforced by marketing activities (i.e. rewards). We realise, however, that it is unrealistic to expect the online gambling industry to prioritise harm prevention over revenue maximisation. Policy makers and regulators, therefore, would need to become involved if the actions suggested above are to be undertaken. CSR is paramount to minimise harm and provide a healthier user experience in this business sector, but it also poses marketing dilemmas. We support a global collaborative approach for the online gambling industry, as harm related to gambling is a public health issue. Copyright Springer Science+Business Media Dordrecht 2012