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

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  • Mirella Yani-de-Soriano
  • Uzma Javed
  • Shumaila Yousafzai

Abstract

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

Suggested Citation

  • Mirella Yani-de-Soriano & Uzma Javed & Shumaila Yousafzai, 2012. "Can an Industry Be Socially Responsible If Its Products Harm Consumers? The Case of Online Gambling," Journal of Business Ethics, Springer, vol. 110(4), pages 481-497, November.
  • Handle: RePEc:kap:jbuset:v:110:y:2012:i:4:p:481-497
    DOI: 10.1007/s10551-012-1495-z
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    References listed on IDEAS

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    1. Crawford Moodie & Gerda Reith, 2009. "Responsible gambling signage on electronic gaming machines, before and after the implementation of the United Kingdom Gambling Act: an observational study," International Gambling Studies, Taylor & Francis Journals, vol. 9(1), pages 5-17, April.
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    3. Paolo Calvosa, 2021. "The Influence of E-Commerce in Changing Competition in Regulated Industries: An Analysis in the Italian Sports Betting Market," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(12), pages 306-306, July.
    4. Grahame Dowling, 2014. "The Curious Case of Corporate Tax Avoidance: Is it Socially Irresponsible?," Journal of Business Ethics, Springer, vol. 124(1), pages 173-184, September.
    5. Justus Haucap & Radivoje Nedic & Talha Şimşek, 2023. "Regulatory objectives vs fiscal interests: Are German casino locations motivated by beggar-thy-neighbor policy? An empirical analysis," European Journal of Law and Economics, Springer, vol. 55(2), pages 291-311, April.
    6. Tiffany Cheng Han Leung & Robin Stanley Snell, 2017. "Attraction or Distraction? Corporate Social Responsibility in Macao’s Gambling Industry," Journal of Business Ethics, Springer, vol. 145(3), pages 637-658, October.
    7. Heather Markham Kim & Kyuha Cho & Younggin Choi & Junghoon (Jay) Lee & Jinsoo Hwang, 2021. "Corporate Social Responsibility Reporting in the Casino Industry: A Content Analysis," Sustainability, MDPI, vol. 13(20), pages 1-16, October.
    8. Frans Folkvord & Cristiano Codagnone & Francesco Bogliacino & Giuseppe Veltri & Francisco Lupiañez-Villanueva & Andriy Ivchenko & George Gaskell, 2019. "Experimental evidence on measures to protect consumers of online gambling services," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 3(1), pages 20-29, March.
    9. Haucap, Justus & Nedic, Radivoje & Şimşek, Talha, 2022. "An empirical analysis of German casino locations," DICE Discussion Papers 381, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    10. Konietzny, Jirka & Caruana, Albert & Cassar, Mario L., 2018. "Fun and fair, and I don’t care: The role of enjoyment, fairness and subjective norms on online gambling intentions," Journal of Retailing and Consumer Services, Elsevier, vol. 44(C), pages 91-99.
    11. Patrick Dunlop & Erica E. F. Ballantyne, 2021. "Effective and responsible marketing of online sports gambling to young adults in the UK," SN Business & Economics, Springer, vol. 1(10), pages 1-22, October.
    12. Linda Jansen & Peggy Cunningham & Sandra Diehl & Ralf Terlutter, 2024. "Corporate social responsibility in controversial industries: A literature review and research agenda," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4398-4427, September.
    13. Saif Ullah & Ravi S. Mateti, 2021. "Do appearances deceive? The curious case of CSR activities and shunned companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(1), pages 11-29, January.
    14. Abubakr Saeed & Muhammad Saad Baloch & Hammad Riaz, 2022. "Global Insights on TMT Gender Diversity in Controversial Industries: A Legitimacy Perspective," Journal of Business Ethics, Springer, vol. 179(3), pages 711-731, September.
    15. He, Heping & Kukar-Kinney, Monika & Ridgway, Nancy M., 2018. "Compulsive buying in China: Measurement, prevalence, and online drivers," Journal of Business Research, Elsevier, vol. 91(C), pages 28-39.

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