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Ethical Funding: the dilemma of gambling money

September 3, 2011

I work for a church which has in the past, although not often, received funds from the gambling industry. As a result of this fact, we received an invitation to a forum on “Ethical Funding” and the moral issues surrounding organizations who receive money from the gambling industry. In that forum an debate emerged on whether the trail of monies from gambling produced a ‘vicious cycle’ feeding back into the problem or whether in fact there might be a ‘virtuous cycle’ in which organizations which ‘make a difference’ (potentially in the lives of those prone to gambling addiction) might, if not decreasing the ill created by gambling at least make something good of a bad situation.

For most organizations present, finding funding is increasingly difficult it these tight times when volunteering is increasingly rare. Gambling money is certainly an easy option and it is clear that many organizations become quite dependent on it.

Clearly the gambling industry does destroy lives of a significant percentage of our society, both directly and indirectly – most dramatically by means of ‘pokie machines’. At the forum we heard both the impassioned testimony of those whose lives have been destroyed by the industry, as well as the pragmatic realism of a politician who argued that (a) a government’s mandate for unpopular social change is limited (b) withdrawing from receiving funding will be ineffectual as there will merely be a displacement in which the monies goes to others and (c) that other ‘public health’ approaches might be more effective.

As I reflected on the issue it became clear to me that a strong argument against receiving money depended on a clear account of the way in which charitable organizations who receive such funding actually contribute to the problem (alongside whatever other good they do). I came up with the following argument, however to present it, I need to present the opposing view in as strong a light as possible. So I will begin with a description of the ‘virtuous cycle’ as I imagine it might be conceived and then the ‘vicious cycle’.

  1. The Virtuous Cycle – The money taken by the gambling industry which must be given to charity (by law) could be regarded as a tax. It might be compared to the levies on alcohol and cigarettes. Reception of such money by either government or charitable organizations does not imply approval of the industry, but, perhaps the opposite. Thus the beneficiaries are not necessarily expressing tacit approval of the gambling industry by receiving such funds. Thus in the face of an industry which clearly destroys lives and which, at least in the perspective of some politicians, is not easy to eliminate, the recipients of money can use the money to improve society, even to directly help those addicted to gambling. What’s more if there is no tacit approval of the industry implicit in their receiving the money they can also, without hypocrisy, advocate for change and offer prophetic critique of the gambling industry. Thus although they may not completely repair the damage done by the industry, they at least make the best of a bad situation. Hence the cycle could be regarded as ‘virtuous’.

It occurs to me that this argument works so long as it cannot be shown that those who receive money from the industry do not, by virtue of such reception, contribute to the industry and make the situation worse.

  1. The Vicious Cycle – So how might a charitable organization, by the mere fact of its receiving such money make a contribution to the destruction of lives produced by the gambling industry? What exactly is that contribution? I suspect it could be described as an opportunity for self-justification which makes it easier for the addict to gamble. Let me elaborate. Those addicted to gambling are often particularly vulnerable members of society (although not always and not in every respect), however they are trapped in a peculiar form of technogically enhanced covetousness (as the church used to call it before capitalism made a virtue of it) – i.e. trapped in habitual ego-centric desire. However as human beings they do not only have ego-centric desires but also ec-centric ones, or at least the memory of such desire. Thus equipped with the knowledge that, say, 50% of their gambling money will go to charity they can see their gambling in something less than a purely negative light, and can find it easier to gamble. If in fact human beings tend to be on the look out for ways to justify the evil they do, then the good deeds of charitable beneficiaries provide such potential justification. And if in fact charities who receive industry funding are aware of this fact, then those charities should also be aware that they are providing an (albeit self-deceptive) form of self justification to the gambler. Gamblers can tell themselves that they are making a contribution to the local church or school, even though they may know that they are destroying their family at the same time. And the truth is, they are making a contribution to those charities.

Now it may be that the good done by the charities outweighs the evil created by their contribution to the gambling industry, however this kind of consequentialist moral calculus is notoriously hard to quantify and the fact remains that the industry destroys lives and there are surely duties at stake here which transcend   such calculations.

Moreover, I accept that even if charitable organizations (even in large numbers) withdraw from receiving gambling money, the industry will continue and others will step up to take their places. However, what is made possible by refusing to receive money from gambling is the possibility of speaking without hypocrisy about the damage done by the industry and thus advocating for change.

All of the above argument does not address in any depth what the role of the church is in relation to such a social problem. Clearly the prophetic tradition of protest is part of the answer. And if my argument holds then it is hindered by knowingly contributing to the problem. However, as I indicated in talking about desire (and capitalism) the issue is much broader than gambling, and thus the church is called to be more than just a protesting voice but to model, in a broad sense a different social order in which different patterns of desire are enabled to flourish

What do you think? Please show me the faults in my argument. I’m sure we could do with the funding sometime in the future.

5 Comments leave one →
  1. September 6, 2011 6:21 am

    Hi Bruce,

    Thanks for opening up this topic.

    It seems to me that this is a vexed problem that does trouble church elders/managers etc when it comes up. There are argument (whether valid or not) for both views. And, of course, it extends to other funding sources – alcohol etc.

    You have started the task of identifying some of those arguments. I have thought in the past that it would be useful to compile a catelogue of the arguments for and against as a contribution to understanding the issues.

    One minor issue is the witness or having the fact of receiving funds published in the newspaper or wherever. That the church receives such funding communicates what to the community?

    Thanks for what you have done. I’d be interested in others contributing their views and some synthesis of the various arguments.

    God bless,

  2. Chris Watkins permalink
    September 13, 2011 3:32 am

    Dear Bruce,

    Thank you for your letter and your continued interest in the topic of ethical funding. We agree that it is a contentious issue and would like to continue the discussion in the public arena.Please refer to our Blog at ethicalfundingnz@blogspot

    In response to your thoughtful and reasoned letter, we would like to pick up on a few issues to describe our position as Gambling Counsellors. We are offering only one view out of many.

    Firstly, we do not agree wholly on the concepts of virtuous and vicious cycles which were defined by Hon Pete Hodgson on the night. We understand that a virtuous cycle might exist in relation to alcohol and tobacco where something bad is turned into something good. For example, harmful alcoholic beverages and tobacco are taxed for revenue that is invested in harm mitigation measures. In the case of alcohol, society has a long and complex relationship with this drug, it is naturally readily available and is bound up with tradition and cultural practices. Clearly policies that render control over the use and distribution of profits of alcohol is an important role in supporting the common good.

    We can argue that gambling has a similarly long and complex relationship with our culture. However, it is not with gambling in general that we have concern with. As counsellors at the Salvation Army Oasis Centre, over 95% of the people who access our services are experiencing harm from pokie machines. Not scratchies, not casino tables, not lotto, not horse or dog racing, not keno, but pokies. It is with the pokie industry that we have most concern about and the history of pokies is not like that of alcohol and tobacco. Rather in 1991 the Jim Bolger National Government decided to introduce pokie machines as a way to create tax revenue to fund the community groups and state coffers. In New Zealand we only have pokies because of (not in response to) this political decision which avoided politically unpopular direct taxation. We believe it was rather dishonest of Hon Pete Hodgson to define poke gambling as a virtuous cycle much like alcohol when in reality the governments since 1991 have been concerned with raising revenue in this way.

    Add to this that pokie machines in themselves have been carefully designed and cynically marketed to get people hooked. This seems a disastrous way to fund our community. The evidence shows that it does not matter who we are, if we play these pokies long enough, we will get addicted. If there are no pokie machines, there is no pokie machine problem.

    At the Forum, we challenged the Hon Pete Hodgson about our reliance on pokie revenue for community funding. This proportionally puts a greater burden on the most vulnerable and lowest socio-economically as problem gamblers contribute 40% of the take. Ultimately, this is an issue of taxation. However, Pete cleverly avoided the question and we thought it disingenuous for him to create a discussion about virtuous cycles when the issue was clearly around the fairness of government tax policy.

    Your question was whether it would make a difference of community groups decided to stop taking the money. In the light that we only have pokies because of community group funding, clearly a decision by the community to seek alternative funding would be a strong message to any Government that we want a fairer system.

    We believe that the forum was useful in starting a debate around these issues and highlighted the expediency of past government policy that avoids addressing the clear lack of ethics and justice in pokie revenue collection, which we believe is cynical and unfair.

    Chris Watkins and Judith McHugh
    Salvation Army Oasis Centre

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