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Journal Information
Journal ID (publisher-id): jgi
ISSN: 1910-7595
Publisher: Centre for Addiction and Mental Health
Article Information
© 1999-2001 The Centre for Addiction and Mental Health
Received Day: 20 Month: December Year: 2010
Accepted Day: 18 Month: April Year: 2011
Publication date: December 2011
First Page: 89 Last Page: 109
Publisher Id: jgi.2011.26.7
DOI: 10.4309/jgi.2011.26.7

Tricky business: The nature of integrity violations in Dutch casinos
Gjalt de Graafaff1
Sytze Kingmaaff1
John Schoolaff1
Natalia Zborowskaaff1
VU University Amsterdam
This article was peer-reviewed. All URLs were available at the time of submission.

For correspondence: Dr. Ir. Sytze F. Kingma, Department of Organization Sciences, VU University Amsterdam, De Boelelaan 1081c, 1081 HV Amsterdam, The Netherlands, T: +31 (0)20 598 6802, F: +31 (0)20 598 6860, E: s.f.kingma@vu.nl
Competing interests: No competing interests.
Ethics approval information: not applicable (see article for more information).
Funding: No funding sources.
Dr. Gjalt de Graaf is Associate Professor of Public Administration in the Department of Governance Studies at the VU University Amsterdam. He co-edited The Good Cause: Theoretical Perspectives on Corruption. Journals that have published his work include Public Administration Research and Theory, Public Administration Review, Administration & Society, Social Sciences & Medicine, Public Administration, Public Integrity, Journal of Business Ethics, Business Ethics: A European Review, Perspectives on European Politics and Society, Journal of Agricultural and Environmental Ethics, Public Administration Quarterly, and Health Policy.
Dr. Ir. Sytze F. Kingma is a lecturer in the field of organisational space and technology at the Department of Organization Sciences, VU University Amsterdam. His research interests involve the confrontation between the “material” and the “virtual” dimensions of organisational networks, and the way that “risk” is implicated in contemporary organisational contexts. Dr. Kingma is the editor of Global Gambling: Cultural Perspectives on Gambling Organisations (Routledge 2009). His major recent international articles were published in International Gambling Studies, Journal for Strategic Information Systems, Gaming Law and Economics, Project Management Journal, Culture & Organization, Journal of Contingencies and Crisis Management, Regulation & Governance, and Safety Science.
Dr. John School received his Master in Public Administration at the VU University Amsterdam. At the time, he worked in the security department of a Dutch casino. After his graduation, Dr. School developed his career as a policeman and currently works as a police manager dealing with large-scale criminal investigations.
Natalia Zborowska, MSc, is a PhD candidate at the Department of Organization Sciences, VU UniversityAmsterdam. Natalia works on the project “The Europeanisation of Gambling Organisations and the Regulation of Gambling in the European Union” (funded by the Netherlands Organisation for Scientific Research, N.W.O.). Her research interests include processes of technological innovation, governance and regulation of risk, and European integration. She co-wrote, with Sytze Kingma, a chapter for The International Handbook of Internet Gambling (Routledge, to be published in 2011).
Gjalt de Graaf and Sytze Kingma wrote the article. John School did the bulk of the empirical research at Holland Casino and also wrote significant empirical paragraphs of the article. Natalia Zborowska made substantial editorial contributions and wrote paragraphs on the casino crime practice and literature.

Abstract

This article explores the nature of integrity violations in Dutch casinos. In such organizations, risk may be minimized, but it cannot be eliminated. Casinos, therefore, have a clear interest in constantly seeking to improve their safety standards and cultures. This article empirically analyzes the nature of documented integrity violations in Dutch casinos during the period 2001 to 2006. Of the 78 employee contracts that were terminated because of integrity violations, the files of 13 employees of the table games division were researched in depth. Our analysis of the sample led to a set of propositions regarding the nature of integrity violations in Dutch casinos.


Introduction

Money changes everything. – Cindy Lauper

There is something intriguing about employees' integrity violations in casinos. Everything around casino employees revolves around money. They witness significant greed in their daily jobs and work in an organization where information about money flow is indirect. This lack of direct and precise information could result in the creation of multiple opportunities for theft in a casino.

Gambling studies are currently dominated by research that addresses risks related to problem gambling and addiction treatment. However, despite the gambling folklore and the historical connections between gambling and organized crime, the issues related to the links between gambling and crime receive only little scholarly attention (Ferentzy & Turner, 2009). In their review of the literature, Ferentzy and Turner (2009, p. 125) broadly distinguish four categories of criminal offences related to gambling: illegal gambling, criminogenic problem gambling, crime in and around gambling venues, and family abuse. Because crime in relation to gambling constitutes such a vast and divers research area, we have chosen to develop an explorative research into integrity violations by casino employees. This type of abuse is part of Ferentzy and Turner's category of venue-related crime and represents only one, but a potentially significant and underresearched, crime issue for contemporary casinos.

In this article, we answer the following question: What is the nature of integrity violations in casinos? In order to help casinos combat corrupt behavior, we first need to understand 21st-century violations as much as possible, which is the aim of this article. The better understood they are, the better we can design policies to prevent them. In this article, we further present empirical (descriptive) research on the nature of integrity violations in Holland Casino (HC), the monopolized Dutch casino network.

First, we discuss the concept of integrity and the research background. Subsequently, the heuristic approach of our research is explained. We then discuss the organizational context and vulnerability of the casino business. Following this contextualization of the integrity issue, we investigate a sample of casino integrity violations in a cross-case analysis leading up to a set of propositions regarding the nature of integrity violations in Dutch casinos. From the start, we would like to caution the reader that this research is purely exploratory, that it is intended to thematize and open up this underexplored area of gambling research for debate, and that the resulting propositions should be understood as theoretical hypotheses that might be used as input for further research rather than as generalizable conclusions.


Integrity Violations and Research Background

Casinos can be characterized as high-risk organizations because they exploit high-risk games – high-stakes games that are sensitive to fraud and are associated with a high incidence of problem gambling – and display a reflexive attitude toward these risks because these risks are, to a considerable extent, consciously addressed and managed. In the terms of Weick and Sutcliffe (2001), casinos are organizations “that operate under very trying conditions all the time and yet manage to have fewer than their fair share of accidents” (p. 3).

In this article, we refer to integrity violations as a particular kind of “organizational accident.” Integrity is defined as the quality of acting in accordance with relevant moral values, norms, and rules. Our focus, however, is on integrity violations. We use a typology of integrity violations based on the work of Huberts and Pijl (1999). The types of integrity violations are considered universal and thus useful for describing unethical behavior in almost all organizational contexts. Lasthuizen (2008) recently succeeded in a first validation of the typology.

The empirical research was conducted in HC, which in 2004 had 4,489 employees, of whom 51.2% worked full-time. Employees were based in one of the 14 casinos, an operational branch, or the head office. About 60% were male, and the workforce was rather equally distributed across age groups.

The organization was divided into several departments. Every casino comprised several divisions: table games, gaming machines, front office, food and beverage, security and risk control, human resources, and facilities.


Research and Method

To answer the main research question – What is the nature of integrity violations in Dutch casinos? – we chose an explorative and inductive research strategy (cf. Eisenhardt, 1989; cf. Glaser & Strauss, 1967; Höffling, 2002). More specifically, a multiple case-study design was used, which focuses on understanding the dynamics present within single settings (Eisenhardt, 1989; Herriott & Firestone, 1983; Yin, 1989) in order to generate theory in the shape of propositions (Gersick, 1988; Harris & Sutton, 1986). This method is fitting when not much is known about the phenomenon that is being researched, or when the phenomenon is so complex that neither the variables nor the exact relationship between the variables is fully definable (van Hoesel, 1985), as is the situation here. Case studies offer the advantage of richer details of actual events and their context. Coupled with the within-case analysis is a cross-case search for patterns (Eisenhardt, 1989, p. 540). In our study, the within-case analysis consisted of a detailed description of integrity violations, and the cross-case search for patterns focused on a comparison between these integrity violations.

The archives of all the establishments of HC were studied. Special permission was obtained from HC to study these highly confidential archives under several conditions: No recognizable personal details of the offenders would become public; HC would have the right to read the manuscript before publication to ensure that no personal details were included and to retain the opportunity to suggest alternatives for factual mistakes; and we could not approach the offenders.

Cases analyzed were those in which an employment contract was ended between 1 January 2000 and 1 January 2006 because of an integrity violation (cases could not be too recent, because the case had to be closed in order to solicit permission to study them; otherwise, it was feared, we would risk interfering in the case). There were 78 cases. Only 18% of them were female, even though females occupied 40% of the total workforce. Most terminations (44%) were in the table games division. The table games have the largest amounts of uncounted money and, apparently, the most opportunities for integrity violations. We focused on these cases because they were specific to our research question.

The 78 cases spanned all age groups, although the average wrongdoer was slightly younger than the average employee: 42% were under 30 years of age as opposed to 24% of the workforce. This concurs with findings in the general literature; Weeks, Moore, McKinney, and Longenecker (1999, p. 310) found that employees are less prone to commit integrity violations later in their careers. Fourteen (18%) of the 78 wrongdoers were female; 42% of the total workforce is female.

Upon any investigation of an integrity violation within HC, a record is created at the casino's Security and Risk Control (S&RC) department. We first studied the records to obtain an overview of the research population. We then decided to specifically study those cases that were in the “table games” department, a typical and specific department of the casino business. This reduced the 78 cases to 34. For further in-depth research, from the 34 table games cases, we selected employees who were immediately fired because of the integrity violation, as opposed to those who were in a probation period and whose contracts were simply not renewed “for integrity reasons” or those whose contracts were ended by mutual consent (e.g., to avoid further charges). This reduced the number of cases to 17, which were spread over 11 different casinos. Three of these cases involved persons with managerial functions, which we included to ensure that supervisors were represented in the study. One person was then selected from each of the 11 casinos to ensure a geographical case spread. If multiple cases qualified from a certain casino, one was chosen at random. After this combination of theoretical and random sampling, 14 cases of integrity violations were selected in total. We later discovered that one person had been employed by the casino for only 1 week and we eliminated his case for insufficient information, which left us with 13 cases for analysis. This is an acceptable number, according to Eisenhardt (1989): “while there is no ideal number of cases, a number between four and 10 cases usually works well…. With more than 10 cases, it quickly becomes difficult to cope with the complexity and volume of the data” (p. 545).

The selection process was designed so that the study results would represent the nature of all integrity violation cases discovered and investigated in the nationwide HC network.

The files of the 13 selected cases were studied in depth at the casino where they were stored. The information varied somewhat according to individual casino rules, but in all cases, administrative files of the wrongdoer (such as yearly work performance reports) were available. In the nine investigations that S&RC had conducted themselves, interrogations and witness interviews were especially helpful to the description and analysis of individual cases. In addition, we conducted interviews with managers of human resources and S&RC when possible, which provided valuable information about the wrongdoer and specific circumstances of each case.

To find cross-case patterns, Eisenhardt (1989, p. 541) suggests using techniques that force investigators to go beyond initial impressions. Usually, researchers in multiple case studies face immense quantities of data. Here, we followed the suggestion of Miles and Huberman (1994) to use a monster grid. On one axis of the grid are the 13 individual cases; on the other are variables from a literature review that were determined to be useful to the study of the nature of integrity violations in casinos.

The option, however, of insights and novel findings based on other variables emerging from the data was left open. The cells of the grid are not filled with numbers, but with various verbal comments and citations (Swanborn, 2003, p. 16). From this grid, patterns were derived in the form of propositions, which were then juxtaposed with the empirical data. This inductive process was repeated many times. According to Eisenhardt (1989):

From the within-site analysis plus various cross-site tactics and overall impressions, tentative themes, concepts, and possibly even relationships emerge. The next step of this highly iterative process is to compare systematically the emergent frame with the evidence from each case in order to assess how well or poorly it fits with case data. The central idea is that researchers constantly compare theory with data-iterating toward a theory which closely fits the data. A close fit is important to building good theory because it takes advantage of the new insights possible from the data and yields an empirically valid theory. (p. 541)

From the reiterative process, grounded theory in the form of propositions emerged, which we will present at the beginning of each section, followed by the study data that led to it. All of these propositions should be regarded as hypotheses that might be subject to falsification, confirmation, or adjustment in further research. The propositions are compared with the existing body of literature on corporate corruption (e.g., Ashforth & Anand, 2003; Brief, Buttram, & Dukerich, 2001). This is also (partly) covered in management studies under such headings as “corporate illegality” (e.g., Baucus, 1994), “organizational misbehavior” (e.g., Vardi & Weitz, 2004), “unethical behavior in organizations” (Brass, Butterfield, & Skaggs, 1998), and “ethical decision-making behavior” (Trevino & Youngblood, 1990). Criminologists discuss it in studies on “white collar crime” (e.g., Croall, 2001; e.g., Sutherland, 1983; Weisburd, Wheeler, Waring, & Bode, 1991), “occupational crime” (e.g., Clinard, 1983), or “corporate crime” (e.g., Blankenship, 1993; Shover & Bryant, 1993). In this way, we make clear what is specific about integrity violations in casinos vis-à-vis organizations in general. To illustrate the findings, we will present some case details and literal quotes; anonymity requirements, unfortunately, prevent in-depth presentation of the case stories.

Integrity Violations in the Casino Context

Before we discuss our empirical findings, we first discuss the casino context of our study.

Gambling organizations usually operate under severe legal restrictions, government regulations, and organizational safeguards (Collins, 2003; Cosgrave, 2006; Dombrink & Thompson, 1990; Eadington & Cornelius, 1997; McMillen, 1996; Reith, 2003; Schwartz, 2003). How did these come about?

Many jurisdictions with legal gambling organizations learned how to organize safe and crime-free gambling by untoward experience. The close association between organized crime and Las Vegas gambling made famous by films and crime stories is backed by scientific research (Schwartz, 2003; Skolnick, 1978; Spanier, 1992). Strong efforts have been made to disassociate gambling from this image and to address the conditions that make gambling vulnerable to it.

In House of Cards, Skolnick (1978) reconstructed Nevada's casino history. He described the development of regulatory bodies for the Nevada casinos during the 1960s and 1970s. According to Skolnick, both government supervision and operator legitimacy increased significantly because of external pressure from the federal government and from the tourist industry. Public trust increased as respectable entrepreneurs entered the casino business, but, Skolnick (1978) maintains, even the most respectable casinos cannot guarantee the total absence of fraud. It can occur at all levels of the gaming system, from government supervisors to shop floor employees. Theft by personnel, for instance, will always remain a threat; note that the lessons of Nevada did not prevent the involvement of organized crime in Atlantic City where casinos were legalized in 1978.

There are huge differences between jurisdictions regarding gambling's legalization, regulatory measures, and operational standards (Collins, 2003; Thompson, 1998). Virtually all, however, have confronted and countered criminal involvement, corruption, and fraud. This was no less true for the Netherlands, this article's country of focus, where casino gambling was legalized in 1974 in the form of a monopoly now known as Holland Casino, which runs 14 casino establishments nationwide. Although it is now widely regarded as a respectable organization operating at the high end of the Dutch entertainment industry, it was an organizational disaster until the mid-1980s (Kingma, 2002). In the founding phase of this casino organization, there were serious problems with casino expertise, the tax regime, personnel management, administration, sharing tips, security, government supervision, and employee fraud (Zoeteman, 1988). The problems were extensively reported in the media and discussed in Parliament. In 1981, a management offensive was launched to counter fraud and cleanse the company of untoward practices. Dozens of employees were suspended and internal control was improved and intensified. However, the public image of the casino industry was tarnished and a significant illegal casino market was simultaneously in existence, one in which organized crime, allegedly even the American Mafia, was involved (Kingma, 2004b; Middelburg, 1988). In Britain, similar experiences with criminal involvement and fraud also led to measures to purify and control the industry (Miers, 1981).

All cases apparently required a phase of bad experiences and struggles between public authorities and casino operators to learn how to effectively manage and control casinos. Safeguards had to be installed to prevent commercial gambling from subverting major societal interests. For these reasons, modern states are reluctant to organize gambling as free-market entities, but rather as tightly regulated and sometimes monopolized industries. Gambling scholar Collins (2003) has remarked that cases of free-market gambling have only occurred “as a consequence of an absence of public policy rather than because government has consciously decided that a free market in commercial gambling services is the right policy to pursue” (p. 9).

During the early era of modern casinos, the main issues were fighting fraud and criminalization (Kingma, 2002). Having brought these issues under better control in the 1990s, the market boomed and problematization shifted toward concerns related to economic development, addiction, and problem gambling (Kingma, 2004a). In the United States, for instance, this shift was marked by the government's creation of the National Gambling Impact Study Commission in 1996 (Whyte, 1998), an institute established to evaluate the rapid spread of organized gambling and to address the possible economic and social problems related to it. By the mid-1990s, research in the United States indicated that organized crime within the casino industry should be considered “a shadow of what it once was” (Albanese, 2003, p. 152). According to Albanese (2003), casinos’ ancillary businesses present a primary opportunity for criminal involvement. Like personnel, such vendors must be carefully and continuously screened. Cases of skimming and cheating in the United States almost always involve cooperation from someone on the inside. According to Albanese (2003), this indicates the need for “careful background screening and monitoring of casino employees.” This characterization of crime in U.S. gambling seems to apply to the Dutch casino monopoly as well.

The Dutch media have reported only a few incidents involving robbery, fraud, or corruption since the early 1990s. The major concern of casino management, supervisors, and politicians was to expand the organization and develop “responsible gambling policies” for casino customers. Since the early 1990s, HC expanded from three to 14 high-class urban casinos embedded in local environments with food and entertainment facilities (Kingma, 2008). Within HC, the exploitation of gambling products was rationalized and the range of gambling products diversified. HC is a case of “McDonaldization,” as defined by Ritzer (1993), enhancing the principles of efficiency, calculability, predictability, and control by replacing humans with nonhuman technology. Notably the gaming machine division, introduced in 1986, was expanded, and by 2005 accounted for over 60% of casino returns (Holland Casino, 2006). According to Ritzer and Stillman (2001, pp. 95–97), who discuss casinos as “paradigmatic” for the “new means of consumption,” casinos may also serve as an example for contemporary consumption because of their high levels of surveillance.

Although the Dutch casinos are now regarded as respectable (Kingma 2002, 2008), the industry remains vulnerable to crime. In 2003, a former employee accused HC of facilitating money-laundering practices.1 The incident was extensively discussed in the media and by Parliament, indicating that when a casino fails to safeguard its gambling products, its public image and legitimacy is quickly undermined. Without immediate and effective counteraction, such incidents might, in terms of Perrow's (1999) “normal accident theory,” lead to “system disaster,” which in this case would be a retraction of the gambling license and the closing of casinos.

To safeguard their systems, casinos can be characterized as “panoptic spaces,” complex organizational designs of spatial arrangements, behavioral norms, and surveillance (Foucault, 1975). The casino guards the games with a security system unparalleled in the entertainment industry. Security as a primary concern is manifested clearly in the specialist security service. Nevertheless, guards and their surveillance equipment are only an outer layer of the security system, which is deeply integrated with the design of the buildings, organization, and company culture (Kingma, 2008, p. 43). For example, HC checks the “antecedents” of all personnel. There are strict rituals and procedures for handling, transporting, and counting money, chips, and jetons. Table openings, behavior in the counting rooms, entering certain rooms, changing croupiers, and documentation all follow stringent rules and procedures. Supervisors are placed to ensure that the regulations are followed; breaking a rule has serious consequences such as summary dismissal for any form of theft. To monitor cash flows, Dutch casinos use electronics where possible, registering money inside the slot machines and at the American Roulette tables and recording every human movement on film. Cameras are also frequently used for dispute resolution, such as when a customer disagrees with a dealer's interpretation of his or her bet.

The security system perhaps more significantly has a preventive effect, which is in line with the overall objective of a panoptic space. Personnel and customers are aware that they are under constant surveillance (Kingma, 2008, p. 43). Although the security measures lead to penalizing or banning offenders in the case of extreme breaches, their purpose is more to intervene and correct at an early stage. In this respect, the organizational design of HC assumes the features of a safety culture (Gherardi, Nicolini, & Odella, 1998). HC indeed seeks to institute strong, unitary safety norms and values that are ideally shared by all members of the organization. These cultural mores are intended to encourage employee compliance and commitment to reliability, responsibility, and attentiveness.

Casinos are tight spaces in which many people work, play, and interact in close proximity. Tasks are specialized and the substitution of expertise and equipment is limited. There are many and diverse feedback loops between gamblers and employees, as well as between various categories of employees. Information, particularly and most significantly about the returns of the numerous individual gambling transactions and aggregate gambling returns, is only indirectly known to the employer, and only known after the fact. To the untrained eye, the transaction processes within the casino are difficult to follow and understand. Of significance is the high number of and interactions between a casino's centralized “control parameters” regarding identification, registration, administration, and video surveillance. These elaborate controls indicate that the various components of casinos may interact in unwanted and unexpected ways.


Research Findings

In this section, we present our findings in the shape of a number of propositions or hypotheses, followed by a discussion of the data that informed these propositions.

Proposition 1. The most prominent type of integrity violation in casinos is “fraud and theft.”

Eight of the 13 individuals were fired for “fraud/theft.” Three were fired for “waste and abuses of resources,” and the remaining two for “private time misconduct.” In seven of the eight fraud cases, the suspect confessed. Interestingly, one of them remarked:

During lunch we talked several times in a select group about theft at a roulette table. We agreed that the chance of getting caught was really small. And punishment would involve, next to being fired, probably just a suspended jail sentence of a few months. We estimated that the possible gains of the theft could be very high though.

This quote suggests that the casino culture might house a more favorable balance (in the eyes of the wrongdoer) of gain versus risk. In other cases, wrongdoers indicated that they found themselves in a gradual drift of increasingly incautious behavior. After they were caught, they were amazed and frustrated by their misbehavior and the fact that they had risked their jobs.

What happened in the 13 cases? In three, the casino employee was in collusion with one or more of the guests, who were given more than their legitimate winnings. In two cases, chips were stolen and hidden about the employee's person. Two others, both supervisors, committed fraud during the changing and counting of chips. Their trick was to cause confusion during the procedure, taking advantage of it to steal chips and “correct” the books.

The other cases were not directly gambling related. One person was fired for stealing from colleagues’ lockers. Three were fired because they took advantage of sick leave or were habitually late for work. In one of these cases, the employee had also borrowed large sums of money from colleagues but could not repay them, leading to organizational unrest. The two cases of private time misconduct involved a drug violation and a domestic violence charge.

In cases of fraud and theft, it is not always clear precisely how much money was taken. The amounts the investigators felt sure about ranged from €5,000 to 132,000. In four cases, the amount was between €25,000 and 30,000. It was often mentioned in the files that the real amount embezzled was probably higher because of the likelihood that the theft occurred over a longer and untraceable period.

Our first proposition is about the category of integrity violations in a casino. The proportion of fraud and theft cases, eight of 13, seems comparatively high if we look at other types of organizations, such as governmental (e.g., Nelen, 2003). Of course, our finding that most integrity violations are money related does not come as a surprise, because we are dealing with an organization suffused with money. Furthermore, table games employees, such as our sample, are closer than others to large sums of uncounted money. The fact that in a casino one plays with money clearly makes these organizations vulnerable to fraud and theft.

Proposition 2. Integrity violators in casinos are often either extroverts or introverts.

Table 2 presents a summary of quotes on the personality of wrongdoers in the cases. These quotes are derived partly from the files, but mostly from interview data.

Nine of the 13 individuals could be characterized as “extroverted.” Other key words were “communicative,” “open,” “direct,” and “flair.” An illustrative interview quote was, “There was always a lot of laughter with R. in the cafeteria. He was immediately the center of attention.” Words such as “normal” or “average” were rarely used to describe the wrongdoers. The few who were not the ebullient type were characterized oppositely: quiet, introverted.

A similar pattern of extremes emerged when examining relationships with colleagues. Seven had excellent relationships with their colleagues and were popular; five had little contact. In one case, no information was available.

Because personalities of organizational wrongdoers are seldom considered in quantitative research, little is known about them from the literature (cf. Nielsen, 2003). Moreover, this aspect has received little attention in qualitative research (Ahmad & Brookins, 2004; Anechiarico & Jacobs, 1996; Della Porta & Vannucci, 1997; Höffling, 2002). Vardi and Weitz (2004) conclude in their review of organizational misbehavior: “We believe that the ability to predict intentional misbehavior patterns would be an important contribution to OB research. However, systematic empirical research on misbehavior is still lacking” (p. 116). In organizational misbehavior literature, significant relationships are reported between certain personality traits and workplace delinquency (Ashton, 1998; Griffin, O’Leary-Kelly, & Collins, 1998; Raelin, 1994; Sproston, Erens, & Orford, 2000; Trevino, 1986), but the studies focus on variables such as cognitive moral development, locus of control, Machiavellianism, or low self-esteem. In our research, personality traits were not derived from psychological testing but from observations and remarks made in the files and interviews. Although this is subjective and comparatively weak evidence, it clearly indicates that personality traits are considered relevant in practice and that the observations point in the direction that integrity violators are (after the fact) perceived as somehow “standing out,” because of either conspicuously eye-catching or conspicuously unobtrusive behavior.

Proposition 3.Most integrity violations in casinos involve weak supervision of the violator.

From the case material, it became clear that all the cases of fraud were accompanied by poor control and supervision of the violator's activities, resulting in opportunities for fraud. Furthermore, the immediate supervisors concerned had not considered integrity a serious issue – at least not until the corruption case surfaced. This is remarkable, given the casino tables’ vulnerability to fraud. The wrongdoers had been able to establish a trustworthy relationship or evade supervision. A witness reported: “After the change in supervision by the table manager, it was too easy for him. There wasn't immediate control anymore. In the old system it would have been nearly impossible for him.” Most wrongdoers expressed a feeling that there was no control, or that control existed on paper but was not enforced. One explained: “The first time I made a mistake at the table and accidentally paid the guest too much, I thought ‘never mind, my mistake.’ But then I realized how easy it was; no one noticed it. Then the idea came into my mind.”

The relationship between integrity violations and weak supervision is firmly rooted in the literature. Leadership and supervision is considered of highest importance to prevent corruption and fraud, as is setting a good example (e.g., Johnson, 1993; Petrick & Quinn, 1997; Sproston, Erens, & Orford, 2000; Trevino, Weaver, Gibson, & Toffler, 1999). Ashforth and Anand (2003) argue:

Leaders do not have to actually engage in corruption to serve as role models: rewarding, condoning, ignoring, or otherwise facilitating corruption – whether intentionally or not, or explicitly or not – often sends a clear signal to employees. (p. 7)

Also noticeable in the fraud cases was that the control procedures were in most cases inadequate. In organizational misbehavior literature, Ackroyd and Thompson (1999) have stated that employee misconduct is usually the result of oppressive or lax controls. Although (as indicated in the theoretical section) employee supervision in casinos is intense compared with other work environments, it is striking that, at least in our sample of fraud cases, there were clear indications of poor supervision. From this, one might conclude that it is perhaps difficult to maintain high standards of supervision and/or that a slackening of supervision in a casino easily leads to rule-breaking behavior.

Proposition 4. Colleagues are hesitant to report suspicions of another's integrity violation.

In three of the eight fraud cases, a customer reported that something was suspicious. Three others were discovered through regular camera system controls. One was discovered incidentally during a camera review request from a customer to determine the rightful owner of a stack of chips, one from normal video control, and one from company-wide control.

Supervisors had reported the employees who were fired because they were habitually late or absent; the locker theft was reported by the owner and the thief was apprehended after an investigation. Only once was an investigation instigated by a peer. This conforms to recent research on reporting in public organizations (de Graaf & Huberts, 2008) in which it was found that only 9% of integrity violations originated from peer reporting, whereas one third were started after regular controls and accountancy and about one quarter by citizen or customer reports. This also concurs in the literature on reporting integrity violations within organizations, which states that loyalty and solidarity are important factors that influence colleagues’ reporting behavior (e.g., Gorta & Forell, 1995; Trevino & Victor, 1992; Zipparo, 1999). Similar conclusions have been formulated in whistle-blowing literature (e.g., Greenberger, Miceli, & Cohen, 1987; Miceli & Near, 1984; Near & Miceli, 1986). An example of loyalty from the case material was “I noticed that he had much more money than he used to. I found that suspicious. I suspected irregularities at his table. Maybe I should have reported it, but he was a good guy and I really didn't think about it.” In another case: “I walked around for a while with a bad feeling because of the irregularities that I noticed. I didn't know what to do with that. I didn't want to rat on a colleague.” A person who did report said: “I clearly noticed that my colleagues didn't like the fact that I reported.”

In most cases, the wrongdoer's behavior had caught the attention of colleagues or supervisors. In one case, it was clear to colleagues that the wrongdoer had more money than he used to: “He had a lot of cash on him all of a sudden. Normally he always needed money and asked me to lend him money.” In five other cases, it was clear that the wrongdoer was behaving differently, described as having “lots of restlessness in his daily duties.” “He was doing a hundred thousand things at the same time, except what he was supposed to.” In only two of the eight fraud cases were there no warnings within the organization. Three of the violators had been suspects in previous internal fraud investigations. Others had behaved strangely toward their supervisors. An assistant manager in human resources remarked: “He was number one on my list of those I expected to go.” This behavior links to a study on corruption in public organizations (van der Wal, de Graaf, & Lasthuizen, 2008) that has concluded: “In most organizations, signals of something ‘irregular’ surfaced before the corruption case was discovered.” Turner's classical theory on organizational disasters claims that most are preceded by an “incubation period” in which there are incidents and signs of irregularities that are not always adequately responded to (Turner & Pidgeon, 1997). This observation indicates that high-risk gambling organizations should, in the terms of Weick and Sutcliffe (2001), be mindful of small and weak signs of trouble and that they should not rely on colleagues to report them.

Proposition 5. Integrity violators in casinos are effective employees.

Almost all files had annual staff appraisals and it is notable that the wrongdoers were not “bad” employees. Of the 13 cases, 12 had good or very good yearly functioning reports. The same applies to the croupiers. In each case, their speed, accuracy, and neatness were praised. As one supervisor said during an interview, “He was one of the best croupiers we had. He worked mechanically, neatly, and at a high pace.” We also found the following quote: “During observations we could hardly follow him. He worked very neatly, especially for his work pace.” This last quote also hints at the possibility that the better croupiers are, the harder it is to detect them stealing. This may even lead to carelessness by the wrongdoer. We found the following quote in one of the files by a wrongdoer: “I did not have much fear for the cameras. I thought I was too quick for them.”

The data presented here resonate with the findings of a similar study (de Graaf & Huberts, 2008) on corruption in public service in which it was concluded that the corrupt were neither inefficient nor ineffective, leading to the following proposition.

Proposition 6. Integrity violators in casinos often have a gambling addiction.

In seven cases, no information on addiction was found, but in six cases, the wrongdoers obviously had a gambling problem. In these cases, the wrongdoers either admitted to their gambling problem and/or it was inferred from their accounts by the supervisors. These wrongdoers often had money problems: in five of these cases, third parties had demanded their paychecks at least once. In two cases, HC, on request, advanced their paychecks at least five times.

Because a gambling addiction can be related to other addictions, we looked for evidence of this association. At least one of these six persons with a gambling problem also used hard drugs (cocaine); at least two of the six gambling addicts used soft drugs on a regular basis. The finding that a substantial number of the wrongdoers had a gambling problem is particularly significant in light of the HC policy that employees must not visit gambling establishments in the Netherlands.

Proposition 7. Integrity violators in casinos often act alone.

It is notable that in all 13 cases, the wrongdoer was acting alone with respect to the casino system. No evidence was found of corrupt networks. In three cases, people outside the casino – not colleagues – were involved. We cannot confirm any hypothesis that casino fraud is committed by groups of colleagues. On the contrary, we propose that most casino employees who commit fraud act alone. We regard this as somewhat surprising, given the supervisory and video controls. This finding hints at deficiencies in operational control.


Conclusion

In this article, we explored the nature of integrity violations in Dutch casinos and offered primary conclusions in the form of seven propositions. They sketch a picture of integrity violations in Dutch casinos. This research offers a conceptual framework and a first impression of integrity violations in casinos. We immediately add to this that we are fully aware of the limited basis of the empirical findings. The propositions are based on the Dutch situation and inferred from only a limited number of cases from which one cannot draw generalized conclusions. The propositions should therefore be regarded as hypotheses that could be tested in further research. Although we hold that the propositions are valid and plausible, the causal mechanisms behind these propositions, as well as the statistical generalizability, are definitely unclear and could be the object of further research.

Casino companies differ regarding their organizational procedures, surveillance systems, and safety cultures. The number of undiscovered cases in the Dutch casinos is a “dark number”: we do not know it. What we do know is that integrity violations are related to the overt flow of money and that they are persistent, even in casino companies that are determined to eradicate them. Despite knowing they are being watched in the modern casino panopticon, employees still misbehave. This somewhat paradoxical observation can perhaps partly be explained by some observations in our data, for example, that it is usually the best croupiers who steal because they become overconfident and believe that they will not get caught. Also, as we saw, as soon as supervision is weak, the chances of stealing increase.

It would be interesting to repeat this study in different countries to see whether the nature of corruption differs. Future research could also be of a more quantitative nature to test the propositions and to determine the statistical generalizability in order to find out whether the propositions can be supported in a larger population of casinos and cases.

Casinos should be regarded as high-risk organizations. They not only provide a vulnerable service – gambling with money – but they are also accident prone due to certain organizational features such as “complex interactions” and “tightly coupled” connections (Perrow, 1999). At the same time, the organization of casinos is highly sensitive and well poised to prevent and manage certain accidents (Weick & Sutcliffe, 2001). Regarding this last feature, casinos assume the character of “panoptic spaces” (Foucault, 1975), where behavior is under constant surveillance and organizational space is designed to optimize this surveillance. The severe scrutiny is somewhat paradoxical because it counters misbehavior while increasing the complexity of interaction, which could lead to unexpected and unwanted consequences. In a casino, the surveillance system might prevent employees from misbehaving, but it might at the same time lead to a laxity in vigilance: Authorities might assume that employees will not misbehave because they know they are being videotaped.

Finally, although risks can be mitigated, casinos cannot be risk free. In this sense, integrity violations – deviations from relevant organizational values, norms, and rules (Huberts & Pijl, 1999) – can be characterized as a kind of “normal accident” (Perrow, 1999) in casinos. Casinos thus have a clear interest in constantly seeking to improve safety standards and cultures. Scientific analyses of the kind offered in this article might be helpful for that.


Notes

1This was reported, on the basis of investigative journalism, on September 2, 2003, by the newspaper Het Parool and the television news program NOVA. Subsequently, there was a police investigation, which did not find proof of “large-scale money laundering” practices at Holland Casino. In the Dutch system, Holland Casino carries, as a state monopoly, the primary responsibility for the surveillance and control of the casinos. The Dutch gambling commission has no authority over the casinos in terms of operational control.

Acknowledgements

The ethical aspects of this research on integrity violations in the legal Dutch casinos have been safeguarded in the following way. The privacy of respondents and rule breakers discussed in this article has been safeguarded by removing any clues that might relate the reported facts to individual persons. Access to the employee files for the purposes of this research was granted by the organization (Holland Casino). The final version of this article has, in view of the ethical handling of the research data, also been checked and approved by the organization. The article further reports about academically independent research; there was no funding by the organization and no interference on their behalf in the research design or the conclusions. The researchers would like to thank Holland Casino for their cooperation in this research.


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Tables
Table 1 

Types of integrity violations


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Table 2 

Various quotations concerning the impressions and characters of the cases


Click for larger image


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