O Assessing Corporate Social Responsibility in China's Sports Lottery Administration and Its Influence on Consumption Behavior

ORI GIN AL PA PER

Assessing Corporate Social Responsibility in China’sSports Lottery Administration and Its Influenceon Consumption Behavior

Hai Li • James J. Zhang • Luke Lunhua Mao • Sophia D. Min

Published online: 17 September 2011� Springer Science+Business Media, LLC 2011

Abstract The purpose of this study was to identify and examine consumer perception of

corporate social responsibility (CSR) in China’s sports lottery industry, and the effect of

perceived CSR initiatives on sports lottery consumption behavior. Research participants

(N = 4,980), selected based on a computer-generated, randomly stratified multistage

sampling process, comprised Chinese residents who had purchased sports lottery tickets in

the past 12 months. They completed a questionnaire that was derived from a qualitative

research process. A factor analysis extracted two factors associated with perceptions of

CSR in China’s sports lottery administration: Regulatory and Prevention Responsibilities

and Product Development Responsibility. Logistic regression analyses revealed that these

two factors were influential of consumer behavior (i.e., relative and absolute expenditure,

purchasing frequency, and time commitment). This study represents an initial effort to

understand the dimensions of perceived CSR associated with Chinese sports lottery. The

findings signify the importance of enforcing CSR in sports lottery administration.

Keywords Consumer well-being � Sports gamble � China market �Corporate social responsibility � Problem gambling

H. Li � J. J. ZhangSport Events Research Center, School of Sport Economics and Management, ShanghaiUniversity of Sport, 399 Chang Hai Road, 200438 Shanghai, People’s Republic of China

H. Li (&)Department of Tourism, Recreation and Sport Management, 300 FLG—College of Health and HumanPerformance, University of Florida, Gainesville, FL 32611-8208, USAe-mail: [email protected]; [email protected]

J. J. Zhang � S. D. MinDepartment of Kinesiology College of Education, University of Georgia, 115 Ramsey,Athens, GA 30602, USA

L. L. MaoDepartment of Tourism, Recreation and Sport Management College of Health and HumanPerformance, University of Florida, Gainesville, FL, USA

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J Gambl Stud (2012) 28:515–540DOI 10.1007/s10899-011-9270-0

Introduction

The last decade witnessed the rocketing of Chinese economy and gradual open-up of

gambling market. The gambling history after the China’s open-up dates back only about

20 years. The gambling market has been rising remarkably during this period. Two

administrative lottery institutions in China are the China Welfare Lottery Distribution

Center founded in 1987 and the China Sports Lottery Administration Center founded in

1994. In the early 1990s, draw games and scratch cards were the only two gambling types.

As of now, almost all mainstream gambling types, such as lotto, sports betting, numbers

game, and high frequency lotteries (e.g., Keno and VLTs) are available. Even horseracing

and internet lottery, currently under debates, are expected to be soon introduced in the

China’s market. In the past 5 years, the sales of all types increased in geometric series. The

entire market grew in total sales from $2.5 million in 1987 to $15.8 billion in 2008 (China

Lottery Almanac 2007, 2008, 2009). According to La Fleurs’ 2010 World Lottery Almanac,

sales of Chinese lotteries reached $19.1 billion in 2009, consisting of $10.8 billion of

welfare lottery (i.e., Global Top 5) and $8.3 billion of sports lottery (i.e., Global Top 7). This

rate of rapid growth in China is unforeseen by both gambling administrators and consumers.

Essentially, Chinese gambling market is facing an unprecedented opportunity.

Gambling may advance the economic and social development of a nation. It is an

effective means to boost consumer spending and generate tax incomes while promoting

other industries, such as printing, communication, transportation, manufacture, finance,

and advertisement. For example, during 2009–2010, there were 58,418 employees within

the sports betting sector in the UK (Gambling Commission 2010). Sports wagering helps

bring more than 30 million visitors to Nevada each year and provides employment for

thousands of people. The Las Vegas Convention and Visitors Authority estimated that the

2007 Super Bowl weekend generated $109.5 million in non-gaming economic impact,

attracting 287,000 visitors (American Gaming Association 2009). The Hong Kong Jockey

Club, as Hong Kong’s largest single taxpayer, contributed more than HK$14.1 billion to

public funds through betting duties and taxes during the financial year that ended on June

30, 2010. It represents nearly 8% of all revenue that the Government’s Inland Revenue

Department collected in 2009–2010. Moreover, the Club’s operations sustained employ-

ment for more than 26,000 people directly and tens of thousands more indirectly (Hong

Kong Jockey Club 2010). In mainland China, sports lottery provides nearly 300,000 jobs.

An official in China Sports Lottery Administration Center claimed that sports lottery

provided as much as $176.5 million, $205.9 million, and $235.3 million in tax revenue for

the years 2006, 2007, and 2008, respectively. Despites its wide influence on various areas

covering public welfare, sanitation, and education, it contributed to sports the most.

Throughout 17 years of distribution, aggregate sales of sports lottery amounted to $57.1

billion, and the related public welfare fund collected over $17.6 billion (China Sports

Lottery Administration Center 2011). According to Provisional Regulations on Adminis-tration of Public Welfare Fund Collected from Sports Lottery (General Administration of

Sport of China 1998), sports lottery is the main source of Olympic Supporting Program.

The General Administration of Sport of China (GASC) spent 60% of its retained welfare

funds on national fitness program and 40% on Olympic Supporting Program. It is safe to

say that sports lottery financed almost all sport related expenditures, including training

athletes or hosting events. For instance, from 2001, funds invested in various areas related

to the Beijing Olympic Games amounted to $404.4 million. As to public fitness, by 2009

sports lottery public welfare fund, appropriated by GASC alone, financed 110,000 jogging

trails nationally, held Poverty Relief Project and Health Maintain Project in distressed

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areas like the rural west, and established more than 100 public fitness centers. As to other

sports facilities that GASC as well as local sports administrations financed for rural areas,

100,000 were completed and 20,000 more were under construction (China Lottery

Almanac 2007, 2008, 2009).

In spite of the positive aspects of sports gambling, its negative effects should be ignored,

especially its potential harm to players and society. At times, it caused some social

problems and led to some unnecessary social costs. Most people play the lottery for fun and

entertainment, without negatively influencing themselves or their families (Blaszczynski

et al. 2004; Productivity Commission 1999). However, a small percentage of the popu-

lation experiences problems with gambling, spending increasing amount of time and

money on gambling. They may lie about their gambling, find it difficult to control the

impulse to gamble, and engage in socially destructive behavior to continue to gamble

(from relationship breakdown to crime) (Productivity Commission 1999). Dickerson

(1993) categorized the negative effects of problem gambling into individual, interpersonal,

employment, economic, and legal categories. Individual effects include loss of self-esteem

and depression, interpersonal effects involve marital and family relationships, employment

effects include loss of productivity and even job loss, economic effects include gambling

debts, and legal effects involve illegal acts to support gambling and related legal pro-

ceedings. Problem gamblers negatively affect on an average 10–17 people around them,

usually including family, friends, and employers (Shaffer and Korn 2002).

For these reasons, gambling issuance and administration institutions need to limit the

pervasive effects of adverse consequences associated with sports gambling. Even in countries

with well-developed gambling industry, the interests of players have often not been well

protected because gambling providers and government excessively pursue profits from the

gambling industry; thus, the benefits of the players have been neglected at times. For example,

Video Lottery Terminals (VLTs), now prevailing in many countries, are often termed the

‘crack cocaine of gambling’ because of the rapid action and stimulating subjective experience.

Like stimulant drugs, VLTs are characterized by speed of action and powerful reward prop-

erties that make them more attractive (Korn and Shaffer 1999). Video lottery gambling is

considered one of the ‘‘continuous’’ forms of gambling, in which the time elapsed between

wager and result is very short. Since problem gamblers prefer this particular type of gambling,

it is likely to lead to sustained problem-gambling behavior (Diskin and Hodgins 1999). For

instance, in Australian New South Wales (NSW), NSW clubs operate about 75% of poker

machines, 40% of those in Australia and hold 8.2% share of the estimated 905,354 ‘high

intensity’ gaming machines worldwide (Productivity Commission 1999). Initially established

as non-profitable organizations that serve the public interests, the nature of NSW clubs has

changed over time. They have gradually turned into profit-oriented businesses and the gam-

bling machines possessed by the club led many casual players to become problem gamblers

(Hing 2006). Due to the attraction of tax dollars generated from gambling industry, the state

governments have often downplayed the administration and regulation of the gambling

industry. Under such situation, stakeholders of NSW clubs have called for the government to

take the social responsibility initiatives to monitor the organizational behaviors of the NSW

clubs, minimize the social harms arisen from gambling, and protect gamblers’ overall benefits

to the greatest extent. Reports of this kind have appeared in some countries and regions

(Blaszczynski 2001; Pratten and Walton 2009; Smith and Rubenstein 2009).

In recent years, the interests of the players in China had been questioned and even harmed

from time to time. First, since sports lottery issuance and administration institutions are solely

concerned about the sales volume, the probability of winning the game is exaggerated in the

process of sales, with advertisements emphasizing ‘‘becoming rich over-night’’ schemes;

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consequently, irresponsible marketing campaigns contribute to sports lottery players’ mis-

conceptions about the games, which in turn lead to many individual and social problems.

Second, the unreasonable design of the gaming rules is responsible for many problem players

as the announcement of winning, reward exchange, and the use of sports lottery public

welfare fund are often unclear, violating the knowing rights of players. Third, due to long-

term insufficient guidance and regulations, especially for vulnerable population segments

(e.g., youth, people with lower-income), as well as a lack of social support measures from the

sports lottery issuance and administration institutions, some gamblers have become potential

threats to the society. All of the abovementioned activities, to some extent, had infringed

players interests. For example, Sports Lotto, a new type of gambling product launched by the

Sports Lottery Administration Center of China in 2004, has caused a series of social issues.

The design of the game rules has given players a false perception that the winning chances are

extremely high, which induces a mentality of ‘‘wind-fall money.’’ Some players sell their

houses just to buy Sports Lotto tickets, or even worse, some players have committed crimes to

obtain funds. Two employees of Agriculture Bank of China diverted $6.3 million of bank

funds to buy Sport Lotto lottery tickets, winning nothing. In addition, ‘‘Xi’an BMW Scandal’’

and ‘‘Dual Color Ball Scandal’’ in 2004 showcased the irresponsible activities of the sports

lottery administrative institutions, which in turn have gradually led the masses to distrust the

credibility, honesty, and social responsibilities of the governments. Evidently, these activities

have profound effects upon the healthy and sustainable development of China’s lottery

market. It is China’s sports lottery administrative institutions’ obligation to carry out

appropriate initiatives to guide lottery players’ purchasing behaviors and to protect their

benefits, so as to fulfill their social responsibilities.

While the concept of corporate social responsibility (CSR) has grown exponentially in

the last decade, it is a controversial subject that continues to attract a lot of attention—from

those who argue that the whole issue is irrelevant to business (Freeman and Liedtka 1991),

through those who see the relevance but think it is a bad idea for business (Friedman 1962),

to the vast array of writers who think that CSR is of strategic importance to business in the

latter half of the twentieth century. Researchers have reported positive, negative, and

neutral effects of CSR on financial performance. However, most of the research findings

support the positive notion, which suggests that corporations of the twenty-first century can

derive enormous benefits when their stakeholders perceive them socially responsible

(Crowther 2003; Idowu and Towler 2004). One important group that appears to be par-

ticularly susceptible to a company’s CSR initiatives is its consumers (Bhattacharya and

Sen 2004). Previous studies suggested that consumers always show positive attitudes

toward the companies that are committed to social responsibilities, which eventually can

increase the consumption of the company’s products. Many literatures and practices show

that those corporates, which can take the social responsibility seriously and leave good

impression on the consumers, have usually had good financial performance (Mohr and

Webb 2005; Sen and Bhattacharya 2001).

Over the past 10 years, gambling industry has developed rapidly. Today, it has become

one of the most dynamic industries in the world. Meanwhile, the CSR of gambling industry

has gradually received more attention from the public, policy makers, and researchers.

However, to date very few studies in the literature have explored gambling industry related

CSR. Essentially, CSR in the gambling industry has followed the path of other industries,

that is, the concept of social responsibility was initially not appealing to companies;

subsequently, it was gradually accepted under the external pressures; and eventually, it has

become distinct competitive advantage of companies seeking for long-term sustainable

development (Buchanan and Johnson 2007).

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After interviewing NSW club managers, Hing (2000) found that the participating club

managers prioritized economic, legal, ethical, and discretionary principles in the late 1990s.

The managers most favored secondary harm minimization practices, followed by reactive

primary intervention. Less favored were proactive primary interventions and discretionary

practices. These principles and practices contrast markedly with those advocated by key

stakeholder groups. Now, though many gambling providers may publicly recognize the

potential tensions between social responsibility and their commercial goals, (Gala Coral

2006), for example, reported that ‘‘social contribution (of gambling) will be delivered

alongside our economic performance, not at the expense of it;’’ therefore, most of the gam-

bling providers will have to agree to take full social responsibility. In Great Britain, the

gambling industry must make yearly financial contributions to The Responsibility in Gam-

bling Trust (RIGT), which funds problem gambling treatment and research (Miers 2008). The

key point here is that Great Britain gambling corporations are obligated to participate in

government’s social responsibility agenda. (Camelot 2009), for example, claimed to ‘‘inte-

grate corporate responsibility into every aspect of our business’’ while (Ladbrokes 2009)

emphasized that the company’s ‘‘financial success is rigorously underpinned by a solid

foundation of long-term responsible thinking.’’ Dianne Thompson, Chief Executive of

Camelot Group (2009, p. 5) once said that ‘‘Woven into our everyday operations, corporate

responsibility is embedded in our core values and will remain at the heart of our plans for the

third License. We have committed ourselves to bolstering our approach to player protection,

minimizing any risks to vulnerable players through innovations in our game design process,

and through rigorous age verification checks in stores and online.’’ The Lottomatica Group

(2009) of Italy, the largest lottery company in the world in terms of sales in 2009, stresses

great importance to the social responsibilities to the players, which is actually an integrated

part of the company’s strategy of sustainable development. In recent 10 years, some big

lottery companies, such as the Lottomatica Group in Italy, major lottery companies of

England, Norsk Tipping in Norway, and Veikkaus in Finland published annual reports on

their social responsibility activities, evidencing the importance of social responsibilities in

corporate practices (Jones et al. 2009). According to Eadington (2003), the development

process of responsible gambling initiatives in North America represents the microcosm of

what has been developing in the whole gambling industry in the world, which can be

described in four-stage model. Stage one is characterized by inaction and government and

gambling industry denial; Stage two is described as governmental and gambling industry’s

‘‘lip service;’’ Stage three represents a partial commitment by the government and the

gambling industry to follow responsible gambling measures; and finally Stage four is the

unconditional acceptance of strong measures to attenuate gambling-related harms by gov-

ernment agencies and the gambling industry.

Unlike mainstream gambling, problems in sports gambling often involve individuals

who bet on too many sport events. Due to the simplistic nature of various sports compe-

tition forms, along with consumer familiarity and interest in sports, gamblers often feel that

they have superior expertise and intelligence in beating the predicting odds, which is a

main characteristic of sports gambling; consequently, this is also the major attraction for

many gamblers. Some gamblers feel excited after a few successful predictions about sports

events and start to develop confidence in betting more to win more. If the result is

unfavorable, they bet even more in hope of ‘chasing’ losses by turning the tide, which can

eventually lead to problem gambling. Nowadays, internet is a major source for the players

to take part in sports betting, in addition to traditional sales outlets. Internet gambling can

be one of the easiest forms of gambling to hide from friends and family members.

According to a number of researchers, the nature of internet gambling interface and

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experience, which is convenient, easily accessible, anonymous, immersive, and potentially

more affordable, may facilitate problem gambling (Griffiths 2003; Griffiths and Parke

2002; Griffiths and Wood 2000). To protect gamblers, some sports lottery distributors have

restricted gamblers with precaution measures such as issuing player’s card, requiring age

verification, capping maximum betting amount, and enforcing self-exclusion from online

betting. Although cases like this exist, most of sports gambling providers ignore their

social responsibility for gamblers and the community. An investigation of 30 internet

sports betting companies showed that very few sites engaged in socially responsible

practices and that much more could be done to protect vulnerable segments of gamblers

(Smeaton and Griffiths 2004). Pratten and Walton (2009) suggested that while the firms

appear to take their responsibilities very seriously, some staff were skeptical about this in

the UK. Besides, the prize payout, decided by the sports lottery issuance and administration

institutions, also reflects their responsibility for players. Hence, an unreasonable payout

violates the principle of fairness in gambling rules and jeopardizes the interests of the

players. By way of example, the profit margin of Canadian sports lottery games is inor-

dinately high (i.e., around 40% of the sports wagering dollars are retained by lottery

corporations) in comparison with Nevada’s legal sports books with profit margins of 5%

(Smith 2009).

Sports gambling is a major segment of China’s sport industry. Although various forms of

sports gambling may help generate revenues, increase governmental tax income, and

advance social and economic development, it has the potential to cause social, family, and

individual problems, thus imposing cost and burden on a community. In recent years,

problem gambling associated with purchasing sports lottery has gradually emerged as a

major social issue in China. Gambling market is still not mature, and sports lottery issuance

and administration institutions have no clean-cut vision of their positioning and functions in

the industry; thus, the concept of sports lottery’s social responsibility is not appreciated at

all. Consequently, countless cases show that the interests of the players had been harmed.

According to the analyses mentioned above, it can be seen that it is important for the

gambling issuance and administration institutions to assume their social responsibility,

especially the responsibility for the players. Though some international gambling dis-

tributors promise to fulfill CSR for gamblers, they just take some sporadic measures to

protect the players while not fully analyzing the social responsibility for the players as well

as not specifying the systematic measures to protect players’ interests, thus players’

interests are not fully protected. In addition, the academia remains silent on the issue of

lottery consumers’ response to CSR activities, particularly CSR in sports lottery industry.

In China, sports lottery is the primary outlet for gambling. Because of a large participation

rate among Chinese residents, it is extremely important to construct a scientific system of

responsibility for the sports gambling players and to further understand the relevance of the

characteristics of the consumers and their ideas about CSR in the sustainable development

of Chinese sports gambling industry. Therefore, the purpose of this study was to identify

and examine consumer perceptions of CSR associated with sports lottery in China and their

influence on consumption behavior.

Review of Literature

The idea of modern CSR dates back to the beginning of the twentieth century. It is closely

linked to the industrialization process of American firms and economic situations of a

particular era. On one hand, the appearance of big firms leads to the expansion of firms’

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social power in the economic and social development. The society began to require

companies to undertake CSR initiatives that parallel their social power (Davis 1967); on

the other hand, revolutionary firms and succeeding management began pressing firms to

foster ‘‘corporate conscience.’’ Under such circumstances, the idea of CSR came into

being. Formalized CSR research dates back to the1950s (Carroll 1999; De Bakker et al.

2005). In 1953, Bowen (1953) wrote the seminal book on Social Responsibilities of the

Businessman. Since then, this area of study has grown significantly and today contains a

great proliferation of theories, approaches, and terminologies (Garriga and Mele 2004).

CSR is a controversial subject that continues to attract a lot of research attention.

The relationship between CSR and financial performance is an important research area

of CSR. Although there have been different opinions on positive (Cochran and Wood

1984; Cotrill 1990; Waddock and Graves 1997; Simpson and Kohers 2002), negative

(Kedia and Kuntz 1981; Lerner and Fryxell 1988), and nonexistence (Freedman and Jaggi

1986; Rockness et al. 1986) relations between CSR and financial performance, most

studies support the positive relevance. According to Margolis and Walsh (2001), 122

published studies between 1971 and 2001 empirically examined the relationships between

CSR and financial performance and the findings overall indicated that the sign of the

relationship is positive, which supports those studies that found positive linkages in the

past (Waddock and Graves 1997; McGuire et al. 1988; Auperle et al. 1985). Some later

findings after 2001 further bolstered this line of thinking (Orlitzky et al. 2003; Simpson and

Kohers 2002; Tsoutsoura 2004; Neville et al. 2005; Scholtens 2008). Most researchers

believe that corporations of the twenty-first century can derive enormous benefits when

their stakeholders perceive them as socially responsible (Crowther 2003; Idowu and

Towler 2004). The most important stakeholder group that appears to be particularly sus-

ceptible to a company’s CSR initiatives is its consumers (Bhattacharya and Sen 2004). A

growing number of marketplace polls attests to the positive effects of CSR on consumer

behavior (e.g., Business in the Community 1997; Cone Inc. 1999; Mohr and Webb 2005;

Pivato et al. 2008). Consumer responses to CSR have become one of the focus issues in

studies on consumers’ awareness of CSR (Pomering and Dolniar 2009), trust or attribution

of CSR (Blomqvist 1997), company evaluation (CE), product association (PA) (Siegel and

Vitaliano 2007), and purchase intention as influenced by CSR (Tian et al. 2011). Never-

theless, the existing studies have mainly been conducted in the Western countries. In

China, CSR concept is still in the early stage (Gao 2009); therefore, there is a lack of

available research data. It is only in recent years that scholars have started to pay an

increased attention to investigating the relationship between Chinese consumers and CSR

(Tian et al. 2011; Ramasamy and Yeung 2009; Gao 2009). For instance, Tian et al. (2011)

explored the overall characteristics and peculiarities of consumer responses to CSR in the

Chinese market and found CSR strategies in different industries were unlikely to be

equally successful in encouraging purchasing, and not all consumers were willing to

support CSR in their daily consumption.

A plethora of literature exists on problem gambling, with relatively little research

concerning non-problem gambling. This may be due, in part, to the fact that the study of

gambling is a relatively young discipline compared to more mature areas of scientific

inquires (Shaffer et al. 2001). Only a limited number of studies examined gambling from

CSR angle. Hing is among a few scholars who has studied CSR related to gambling. Hing

(2000, 2001) examined problem gambling as a social issue in the context of NSW regis-

tered clubs and followed Carroll’s (1979) conceptual model of CSR and utilized an adapted

version of Aupperle’s (1982) instrument to measure the priority given to economic, legal,

ethical, and discretionary principles in club machine gambling operations. In these and

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follow-up studies, significant gaps between gaming operators in NSW registered clubs and

the expectations of various, pertinent stakeholders were identified. The findings indicated

that participating club managers prioritize economic, legal, ethical, and discretionary

principles, respectively. The managers favored most secondary harm minimization prac-

tices, followed by reactive primary intervention. Less favored were proactive primary

intervention and discretionary practices. These principles and practices contrast markedly

with those advocated by key stakeholder groups (Hing 2000, 2001; Hing and Mackellar

2004; Hing and McMillen 2002).

Examining the gambling market environment of Ontario, Hancock et al. (2008) analyzed

and re-defined industry and state roles on duty of care, host responsibility, and risk man-

agement. The findings indicated the need for consumer protection and duty of care underlying

interventionist approaches by government. This includes a proactive role of the state in re-

regulating the gambling industry and its products, instituting new policies on gaming machine

product control and enforcement, and reinforcing CSR and the obligations of gambling

providers beyond self-regulatory codes. Jones et al. (2009) and Pratten and Walton (2009)

studied the status of fulfilling CSR of British gambling companies. Jones et al. (2009) offered

a preliminary case study exploration of the CSR issues being addressed and reported by a

number of the UK’s major gambling operators. The study provided some insightful reflec-

tions on four sets of CSR issues, namely those related to the marketplace, workplace, envi-

ronment, and community. The findings showed that a majority of the UK’s major gambling

operators indicated their commitment to socially responsible gambling; however, marked

variations exist in the nature, content, and extent of such commitment. Pratten and Walton

(2009) conducted a case study on CSR of firms dealing with what could be regarded as

‘‘unethical’’ products that were often found in the UK gambling industry. While the firms

appeared to take their responsibilities very seriously, some staff members were skeptical

about this indication. It appeared that the informal approaches often adopted by small,

independent traders to deter a heavy loser was often more effective when compared to the

formal systems utilized by larger companies. There were apparent doubts about the effec-

tiveness of the policies adopted by the management of the large chains of gambling providers.

Since sport events and gambling are essentially connected, sports gambling are

attractive to broad masses of sports gamblers. Sports betting can easily bring misfortune

and suffering on their customers if sports betting providers do not take appropriate pre-

caution to protect players. Risto Nieminen, President of the Sports Betting Commission of

European Lotteries and Toto Association, once said, ‘‘Our socially responsible objective is

to gain more players seeking to spice up their sports experiences with extra excitement by

spending just a small sum of money on a bet. The list of measures that can be taken to

promote responsible gaming is long: age limits, prohibition of playing on credit, the self-

exclusion option, limitations to the gaming hours and stakes, etc. Besides these measures, a

responsible gaming operator will not give misleading information on the chances of

winning, and provides open information about gaming addiction and the options of getting

help’’ (2006, p. 6). Nevertheless, the last few years experienced substantial increases in the

amount of gambling opportunities on the internet, due in part to the nature of the internet

gambling interface and experience. To a great extent, problem gambling caused by internet

betting is rather difficult to intervene by gambling providers as the internet setting is

convenient, repetitively accessible, anonymous, and hard to monitor; consequently; all

these may contribute to gambling problems (Griffiths 2003; Griffiths and Parke 2002;

Griffiths and Wood 2000). Many concerns have been expressed about excessive gambling

and the lack of safeguards for vulnerable populations (Smeaton and Griffiths 2004). As

there are very few studies on the relationship among player protection, sports betting, and

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the players’ responses to CSR initiatives, understanding these relationships can be con-

structive for the sustainable development of sport gambling and can provide sports gam-

bling managers with strategic guidance to develop and implement CSR programs.

As China’s gambling industry needs empirical evidence to support its healthy devel-

opment in a potential massive marketplace with the largest population in the world, this

exploratory study involved extensive interviews of sports lottery consumers, formulation of

a scale to assess CSR practices, examination of the influences consumer demographic

background variables on their perception of CSR practices, and investigation into the

influences of CSR practices of sports lottery administration on the consumption level of

sport lottery players. It was intended that findings of this study would help enrich the

theoretical framework for studying CSR associated sport gambling administration and also

provide empirical evidence for developing and implementing an effective protection

system for individuals involving sports gambling.

Method

Participants

Research participants were Chinese residents (N = 4,980) who had purchased one or more

sports lottery tickets in the past 12 months prior to participating in this interview study. A

majority of the sport lottery buyers were male (i.e., over 75%), between 21 and 60 years

old, married, and with high school or lower level of education. They came from various

employment backgrounds and purchased multiple forms of sport lottery tickets (Table 1).

Questionnaire

For the research purpose of this study, the Scale of Sport Lottery Administration (SSLA)

was developed to assess CSR practices in China’s sports lottery administration as perceived

by sports lottery consumers. Development of the scale was initially conducted through a

qualitative research process (Thomas et al. 2005) that included a review of literature,

interviewing officials of China’s sports lottery administration (n = 40), interviewing

managers of sports lottery retail stores/outlets (n = 20), and interviewing sports lottery

consumers (n = 20). Open-ended questions that focused on the concept and composition of

CSR in sports lottery administration were included in the interview form. In particular,

related theories of CSR, research findings, and opinions of key stakeholders were taken into

consideration. Item writing also reflected the unique characteristics of China’s sports

gambling environment, practices in sports lottery administration, and consumers. During

the interviews, open-ended questions that focused on the concept and composition of CSR

and sports lottery were administrated. Consequently, a total of 19 items were formulated for

the preliminary SSLA scale. A panel of experts (n = 12), including six university profes-

sors in sport management, two sports lottery administrators, and four nationally-recognized

experts in gambling research, conducted a test of content validity in terms of item relevance,

representativeness, and clarity. Consequently, seven items were deleted, resulting in 12

items that were retained for further analyses. Each of these items was then phrased into a

statement measured on a 5-point Likert scale. In addition to the retained scale items, the

questionnaire was comprised of four sports lottery ticket purchase behavior variables (i.e.,

percentage of income spent on sports gambling, total amount of sports gambling expen-

diture, frequency of sports lottery purchasing, and time commitment on sports lottery

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related activities) that were measured as criterion variables. Demographic background

variables (i.e., gender, age, education, employment status, marital status, and types of sport

lottery purchased) were measured to describe the sample.

Procedures

Considering that Chinese residents, particularly those purchasing sports lottery tickets,

typically expect high social appearance, respect, and acceptance, a decision was made to

administer the test through only individualized, face-to-face interviews conducted by

Table 1 Characteristics of sports lottery consumers in China

Variable Category N %

Gender Male 3,850 77.3

Female 1,130 22.7

Age 20 or under 144 2.9

21–30 1,479 29.7

31–40 1,325 26.6

41–50 1,056 21.2

51–60 697 14.0

61 or over 279 5.6

City Shanghai 1,648 33.1

Shenyang 707 14.2

Guangzhou 857 17.2

Zhengzhou 697 14.0

Chengdu 1,071 21.5

Position Employed 1,957 39.3

Retired or unemployed 1,011 20.3

Peasants or rural migrant workers 951 19.1

Students 299 6.0

Individual business owners 618 12.4

Other 144 2.9

Marriage status Married 3,416 68.6

Unmarried 1,350 27.1

Divorced or widowed 214 4.3

Education background Middle school or below 1,285 25.8

High school or technical school 1,932 38.8

Junior college 941 18.9

Bachelor degree 687 13.8

Advanced degree 134 2.7

Types of lottery ticketspurchased

Numbers game 2,719 54.6

Lotto 3,959 79.5

Sports betting 1,185 23.8

High frequent game 752 15.1

Scratch-off game 1,628 32.7

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trained investigators. According to geographic characteristics and administrative zoning,

China was divided into five regions: Northern, Eastern, Southern, Western, and Middle.

Test administration was carried out in five large cities (Shenyang, Shanghai, Guangzhou,

Chengdu, and Zhengzhou) selected from within each of the five regions, with resident

population ranging from 8 to 18 million in a city. Within each city, a computer-generated,

randomly stratified multistage sampling was utilized to select participants. Sampling size

of this study was determined by selecting one participant from roughly every 10,000

residents within each city. For example, as Shanghai had a population of 18 million at the

time when this study was conducted, we planned to administer 1,800 surveys. Therefore,

with a given population of each city, Shenyang was assigned with 800 sport lottery sur-

veys, Shanghai with 1,800 surveys, Guangzhou with 1,000 surveys, Zhengzhou with 800

surveys, and Chengdu with 1,200 surveys. In each city, sport lottery survey sites were set

up to distribute the questionnaire, which were also proportional to the city population, with

20 surveys being assigned for each site. Thus, 40 sport lottery survey sites were set up in

Shenyang, 90 sites in Shanghai, 50 sites in Guangzhou, 40 sites in Zhengzhou, and 60 sites

in Chengdu. These survey sites were further allocated with a stratified sampling process. It

was distributed proportional to the administrative districts retail sales stores/outlets within

each city. In China, each city has several administrative districts. The number of lottery

retail sales stores/outlets in each administrative district was decided based on the total sales

volume of sport lottery tickets; that is to say, the higher the total sales volume of sport

lottery tickets, the more sport lottery retail sales stores/outlets there would be. In sum,

besides the population size, total sales volume of sport lottery tickets were also considered

in determining the total number of sample size within a city and a retail sales store/outlet.

Essentially, a multi-level stratified sampling approach was carried out. Following the

informed consent, trained investigators conducted one-on-one interviews at a reserved

space in sports lottery retail stores. Interviews were conducted on both weekdays and

weekends. Overall, 5,450 individuals expressed willingness to participate in the study and

a total of 4,980 completed the questions in the questionnaire, representing a response rate

of 91.4%. A sports lottery ticket was used as an incentive for completing the questionnaire.

Data Analyses

The statistical program SAS 9.2 was adopted in this study to conduct statistical analyses.

Descriptive statistics for the demographics and SSLA variables were calculated. To

identify the dimensionality of the SSLA variables, an exploratory factor analysis with

principal component extraction and varimax rotation was conducted. Cronbach’s alpha

reliability coefficients were calculated as a measure of internal consistency. One-sample

t tests were conducted to assess the magnitude of SSLA factors. Multivariate analyses of

variance (MANOVA) were conducted to examine the relationship between perceived

social responsibility and demographic background (Hair et al. 2009). Logistic regression

analyses examined the influence of SSLA factors on sports lottery consumer behavior.

Results

Dimensionality of CSR Practices

Following Kaiser-Guttman’s criterion of an eigenvalue equal to or greater than 1.00 in the

factor analysis (Guttman 1954; Kaiser 1960), a two-factor solution was identified, with

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eigenvalues equal to 3.58 and 1.58, accounting for 31.8 and 14.3% variance, respectively.

Because the criterion of an eigenvalue greater than 1.00 may at times misjudge the most

suitable number of factors (Gorsuch 1983), a scree test (Cattell 1966) was also used as a

convergent evidence to confirm the two factors. Meanwhile, three criteria were used to

retain an item and the associated factor: (a) a factor loadings exceeding 0.40; (b) without

double loading; and (c) a minimum of three items in a factor (Hair et al. 2009; Nunnally

and Bernstein 1994). Consequently, one item (‘‘addiction inducing gameplay’’) was

eliminated due to its low loadings on either factors and a total of 11 items were retained in

the SSLA with two factors. Table 2 presents the two factors with their respective items,

factor loadings, communality estimates (h2), and means and standard deviations. Factor 1

consisted of 5 measures assessing regulatory measures, social aiding, transparency, and

fairness, essentially representing social responsibilities regarding regulatory and pre-

scriptive measures; thus, this factor was named as Regulatory and Prevention Responsi-

bilities (RPR). Factor 2 consisted of 6 measures assessing such inherent product

characteristics as winning rules, winning chances, distribution, and publicity of lottery

games, essentially representing the social responsibilities associated with designing and

launching the product; thus, this factor was named Product Development Responsibilities

(PDR). As assessed by Cronbach’s alpha coefficients, internal consistency coefficient was

0.72 for the RPR factor and 0.73 for the PDR factor, indicating that the two factors were of

the internal consistency for the study to proceed.

Conducting one-sample t tests, the composite mean score of the RPR dimension was

2.65 (SD = 0.75) and significantly lower than the neutral point of 3.0 (P \ 0.01); whereas,

the composite means score of the PDR dimension was 3.46 (SD = 0.62) and significantly

higher than the neutral point 3.0 (P \ 0.01). These data indicated that consumers con-

sidered that the sports lottery administration of China overall carried out more PDR, yet

less RPR. Because an orthogonal rotation technique (i.e., varimax) was adopted in the

factor analysis, the two factors were essentially of two independent dimensions and

Table 2 Pattern matrix of the two-factor scale of sport lottery administration

Item Factor

I II h2 M SD

Regulation on maximum amount of lottery purchasing 0.72 -0.03 0.51 2.55 1.07

Transparency of using the lottery revenues 0.70 0.27 0.57 2.67 1.16

Satisfaction with lottery regulation and aiding mechanism 0.69 0.09 0.49 2.77 1.12

Regulation on the lottery purchasing of young people(under the age of 18)

0.64 0.07 0.42 2.54 1.16

Sufficient correct guidance on lottery purchasing 0.57 0.13 0.34 2.74 0.93

Perceived fairness of winning 0.26 0.69 0.55 3.54 0.95

Reasonable rules 0.19 0.67 0.49 3.30 0.87

Convenience and accessibility of buying sports lottery -0.15 0.63 0.42 3.96 0.95

Transparency of winning mechanism 0.36 0.63 0.51 3.24 1.07

Avoid of misleading publicity of buying sports lottery -0.04 0.57 0.33 3.59 0.97

Reasonable winning chances 0.36 0.56 0.45 3.15 0.93

Addiction inducing game play (deleted)

Note: Factor loadings greater than 0.50 are bolded

Factor I regulatory and prevention responsibilities, Factor II product development responsibilities

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perpendicular to each other. Consequently, the two dimensions form a coordinate system

with four quadrants (Fig. 1), where PDR is plotted on the horizontal axis and RPR on the

vertical axis. The 1st quadrant is prescribed as Unbiased (total) CSR with both PDR and

RPR being highly perceived by consumers; the 2nd quadrant is named as Pragmatic CSR

with high RPR and low PDR; the 3rd quadrant is labeled as Deficient CSR with both PDR

and RPR being perceived low by consumers; and the 4th quadrant is termed Inherent CSR

with high PDR and low RPR. Following this logic, a sports gambling company/adminis-

tration may be classified by consumers into one of the four categories. An administration

that is considered as of a Pragmatic CSR style usually focuses on external or administrative

process issues such as regulations and prevention procedures; whereas, an administration

with Inherent CSR style likely focuses on issues that are internal to the form and nature of

various sports gambling games. While an Unbiased CSR would be the most preferred by

consumers, it is apparent that an administration with Deficient CSR style cannot be

regarded positively by consumers and the public in general.

Demographic Variables and Perceived CSR

To assess the influence of demographic variables (i.e., location, gender, age, education

level, occupation, and marital status) on RPR and PDR, a series of MANOVA were

conducted followed by univariate tests on each SSLA factor. This approach was suggested

by Hair et al. (2009). MANOVA affords researchers with the ability to assess differences

across independent variables for a set of dependent variables by controlling family-wise

error rate. The ensued univariate tests can examine each SSLA factor separately. MA-

NOVA of SSLA factors by city revealed significant effects for city (F(8, 9,872) = 57.99,

P \ 0.001). The followed ANOVA procedures revealed that there were statistically sig-

nificant differences in the mean scores of RPR and PDR among the five cities

(F(4, 4,937) = 51.04, P \ 0.001; F(4, 4,937) = 77.79, P \ 0.001, respectively). Post hoc

comparisons with Tukey’s HSD statistic suggest that significant RPR differences existed

between all pair-wise comparisons except those between Shenyang, Guangzhou, and

Shanghai, respectively.

Fig. 1 Contingency of social responsibilities of sport lottery administration in China

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MANOVA of SSLA factors by gender revealed significant effects for gender

(F(2, 4,930) = 3.50, P = 0.030. The followed ANOVA procedures, however, revealed that

there were no statistically significant differences in the mean scores of RPR and PDR

between male and female (F(1, 4,931) = 3.53, P = 0.060 and F(1, 4,931) = 2.32, P = 0.128,

respectively). MANOVA of SSLA factors by age revealed significant effects for age (F(10,

9,848) = 4.50, P \ 0.001). The followed ANOVA procedures revealed that there were no

statistically significant differences in the mean scores of RPR (F(5, 4,925) = 1.56,

P = 0.167) but significant differences in the means scores of PDR among the six age

groups (F(5, 4,925) = 9.51, P \ 0.001). Post hoc comparisons with Tukey’s statistic sug-

gested that significant PDR differences existed between below 20 year old age group and

61? year old age group. All the other pair-wise comparisons were not statistically sig-

nificant. MANOVA of SSLA factors by profession revealed significant effects for pro-

fession (F(12, 9,840) = 4.73, P \ 0.001). The followed ANOVA procedures revealed that

there were statistically significant differences in the mean scores of RPR and PDR among

the seven profession groups (F(6, 4,923) = 4.12, P \ 0.001 and F(6, 4,923) = 6.24,

P \ 0.001. Post hoc comparisons with Tukey’s statistic suggested that significant RPR

differences existed between peasants and the professionally-employed and between

peasants and the retired, and that significant PDR differences existed between the pro-

fessionally-employed and the retired, the retired and students, peasants and students, and

the self-employed and students. All the other pair-wise comparisons were not statistically

significant. MANOVA of SSLA factors by marital status revealed significant effects for

marital status (F(4, 9,838) = 8.71, P \ 0.001). The followed ANOVA procedures revealed

that there were no statistically significant differences in the mean scores of RPR (F(2,

4,920) = 0.11, P = 0.895), but significant differences in the means scores of PDR among

the three marital status groups (F(2, 4,920) = 18.54, P \ 0.001). Post hoc comparisons with

Tukey’s statistic suggested that significant RDR differences existed between the married

and the single. MANOVA of SSLA factors by education revealed significant effects for

education (F(8, 9,838) = 17.36, P \ 0.001). The followed ANOVA procedures revealed that

there were statistically significant differences in the mean scores of RPR and PDR among

the five education groups (F(4, 4,920) = 5.98, P \ 0.001; F(4, 4,920) = 29.61, P \ 0.001).

Post hoc comparisons with Tukey’s statistic suggested that significant RPR differences

existed between bachelor degree holders and all the other four groups, and that significant

PDR differences existed between advanced degree holders and all the other four groups

(Table 3).

In summary, MANOVA and the post-hoc comparisons revealed the following finding:

(a) residents of Shengyang, Guangzhou, and Shanghai had higher perceived RPR when

compared to those from Zhengzhou and Chengdu; conversely, residents in Zhengzhou and

Chengdu had higher perceived PDR when compared to those from Guangzhou, Shanghai,

and Shenyang; (b) younger consumers tended to hold less negative perceptions about RPR,

but more negative perceptions about PDR, when compared with older consumers;

(c) consumers with higher education level had more negative perceptions about both RPR

and PDR when compared with those with lower level of educational background; and

(d) peasants had more positive perceptions about RPR and PDR.

Influence of CSR Practices

Descriptive statistics for the sports lottery consumption variables were first calculated

(Table 4). A majority of respondents (62.44%) spent less than 10% of their income on

buying sports lottery while over 10% of respondents spent more than 30% of their income

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on sports lottery tickets. In terms of the amount of expenditure on sports lottery, a majority

(52.82%) had spent less than 50 Chinese yuan on sports lottery each week while 3.39% of

respondents reported that they had spent over 500 Chinese yuan weekly. While the

respondents predominantly bought sports lottery 1–10 times a week, a significant pro-

portion of respondents (6.11%) bought lotteries more than 10 times each week. Most of

them (56.41%) spent typically less than 1 h on lottery related activities every day.

Ordinal logistic regression analysis was used to identify the relationships between

dependent variables (lottery consumption behavior) and independent variables (RPR and

PDR). The analysis controlled for demographic variables (i.e., gender, age, residency city,

education level, profession, and marital status). All demographic variables entered into the

logistic regression model were coded as dummy variables. The logistic regression model is

shown in the following form: ln ðp=ð1� pÞÞ ¼ aj þ biXi þ ciZi, where p = the probability

of lottery consumption level Blevel j, p/(1 – p) = odds of lottery consumption level

Blevel j rather than [level j; aj = separate intercept for each cumulative probability

Table 3 MANOVA examining the impact of demographic variables on CSR practices

Variable Category Regulation Product F P

M SD M SD

Residency Shanghai 2.70 0.74 3.38 0.62 57.99 0.000

Shenyang 2.75 0.76 3.37 0.64

Guangzhou 2.77 0.67 3.41 0.56

Zhengzhou 2.59 0.73 3.50 0.65

Chengdu 2.47 0.78 3.66 0.58

Gender Male 2.64 0.75 3.47 0.63 3.50 0.030

Female 2.69 0.72 3.5 0.60

Age 20 years or younger 2.70 0.69 3.44 0.63 4.50 0.000

21–30 years old 2.65 0.73 3.40 0.61

31–40 years old 2.64 0.75 3.45 0.64

41–50 years old 2.65 0.78 3.48 0.64

51–60 years old 2.69 0.72 3.54 0.59

61 years or older 2.59 0.74 3.58 0.64

Profession Professionally employed 2.63 0.74 3.44 0.62 4.73 0.000

Retired or unemployed 2.61 0.74 3.50 0.61

Peasants/migrant workers 2.75 0.74 3.52 0.63

Students 2.52 0.70 3.27 0.59

Self-employed 2.69 0.78 3.48 0.63

Others 2.72 0.73 3.41 0.61

Marital status Married 2.67 0.75 3.50 0.62 8.71 0.000

Unmarried 2.63 0.72 3.38 0.62

Divorced or widowed 2.61 0.74 3.40 0.62

Education Middle school 2.71 0.79 3.58 0.62 17.36 0.000

High or technical school 2.70 0.73 3.48 0.60

Junior college 2.64 0.72 3.39 0.61

Bachelor’s 2.49 0.72 3.34 0.63

Advanced degree 2.51 0.67 3.16 0.60

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(it increases as j increases); Xi = vector of independent variables; bi = parameter estimate

for the ith independent variable; Zi = vector of covariates; ci = parameter estimate for the

ith covariate. Because logistic regression models the probability of being in a lower cat-

egory in the ordered value list, the order of the response was reversed with 1 meaning

higher consumption level and 6 meaning lower consumption level in this study.

Table 5 presents the results from a series of logistic regressions. Besides parameter

estimate, standard error, and P value of parameter estimate, odds ratio (eB) is also reported.

The odds ratio for cumulative probabilities gives a better idea of what the logistic coef-

ficient represents. For any fixed outcome category j, a significant odds ratio with a value

below 1 indicates that the independent variable reduces the odds of the dependent variable

in the Bj direction rather than in[j direction, and an odds ratio greater than 1 indicates an

increase in these odds. The percent change in the odds of the dependent variable can be

calculated based on the following equation: 100(eB-1). Findings of the logistic regression

analyses revealed that PRP (b = 0.036, P = 0.410) and PDR (b = 0.098, P = 0.070) did

not significantly (P [ 0.05) predict the portion of gambling expenditure over monthly

income. However, the RPR factor (b = 0.117, P = 0.000), not PDR (b = 0.026,

P = 0.580) significantly (P \ 0.05) predicted the total amount of gambling expenditure.

Table 4 Descriptive statistics ofsports lottery consumptionbehavior variables

Variable N %

Gambling expenditure over monthly income (%)

Below 10% 3,314 62.44

10–30% 1,394 26.27

31–50% 394 7.42

51–80% 131 2.47

Above 80% 74 1.40

Amount of gambling expenditure (in Chinese Yuan)

Below ¥20 1,567 29.52

¥21–50 1,768 33.30

¥51–100 1,014 19.10

¥101–200 490 9.23

¥201–500 290 5.46

Above ¥500 180 3.39

Frequency of lottery purchasing (weekly)

Irregular 388 7.31

Once 408 7.70

2–5 times 2,820 53.17

6–10 times 1,364 25.71

11–15 times 204 3.85

16 and above times 120 2.26

Time spend on lottery related activities (daily)

Below 1 h 2,986 56.41

1–2 h 1,394 26.34

2–3 h 546 10.32

3–4 h 203 3.83

4–5 h 83 1.57

Above 5 h 81 1.53

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According to the odds ratio, every unit increase in RPR perception was associated with a

12% increase (eB = 1.12) in the odds that the lottery consumer is in a higher consumption

category (i.e., in the direction of weekly expenditure over 500 RMB). Both RPR

(b = 0.105, P = 0.020) and PDR (b = -0.134, P = 0.010) significantly (P \ 0.05)

predicted the frequency of lottery purchasing. According to the odds ratio, every unit

increase in RPR perception was associated with an 11% increase (eB = 1.11) in the odds

that the lottery consumer is in a higher consumption category (i.e., in the direction of 16

times or more in weekly purchasing frequency on sport gambling); however, every unit

increase in PDR perception was associated with a 13% decrease (eB = 0.87) in the odds.

Contradictorily, time spent on lottery related activities had different associations with RPR

(b = -0.175, P = 0.000) and PDR (b = 0.108, P = 0.040). Specifically, every unit

increase in RPR perception was associated with a 16% decrease (eB = 0.84) in the odds

that the lottery consumer is in a higher consumption category (i.e., in the direction of

spending 5 h per week on lottery related activities); however, every unit increase in PDR

perception was associated with 11% increase (eB = 1.11) in the odds.

In brief, the RPR and PDR factors had different impact on lottery consumer behavior.

An improvement in social responsibility associated with regulations would eventually

increase consumption level in terms of absolute expenditure. An improvement in social

responsibility associated with gambling products would reduce purchasing frequency, yet

increase time spent on lottery related activities. In contrast, an improvement in social

responsibility associated with regulations would increase purchasing frequency, yet

decrease time spent on lottery related activities.

Discussion

The current study represents an initial effort to construct a valid and reliable measure to

assess the level of social responsibility in sports lottery administration, with the aim to

Table 5 Logistic regression analyses examining the relationship between the SSLA factors and the con-sumption variables

Variable B SE B eB P

Criterion variable—percentage of gambling expenditure over monthly income

RPR 0.036 0.044 1.04 0.41

PDR 0.098 0.053 1.10 0.07

Criterion variable—amount of gambling expenditure

RPR 0.117** 0.039 1.12 0.00

PDR 0.026 0.047 1.03 0.58

Criterion variable—frequency of lottery purchasing

RPR 0.105* 0.044 1.11 0.02

PDR -0.134* 0.053 0.87 0.01

Criterion variable—time spend on lottery related activities

RPR -0.175** 0.042 0.84 0.00

PDR 0.108* 0.052 1.11 0.04

Controls are gender, age, residency city, education level, profession, and marital status (omitted from thetable). B is the parameter estimate, eB exponentiated, B is the odds ratio

* P \ 0.05, ** P \ 0.01

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understand and eventually improve current practices. Specifically, it addressed sports

lottery players’ responses and examined the relationships between CSR practices and

consumer behavior in China. The obtained empirical evidence can be beneficial to various

gambling issuance and administration institutions in China seeking to improve their

operations. Particular issue for the gambling institutions is to consummate safety of sports

lottery product as well as to strengthen the supervision over the lottery market. Due to the

general nature of CSR addressed in the current study, the findings of this study may

provide a reference for research and administration of sport gambling in other countries

and regions.

The two dimensions in the resolved SSLA scale, namely Regulatory and Prevention

Responsibilities (RPR) and Product Development Responsibilities (PDR), make both

theoretical and practical sense when examining CSR issues associated with sports gam-

bling administration. While the PDR represents the inherent nature and fairness of a sport

gambling product, the RPR factor represents the administrative process with heightened

social responsibility. To a great extent, identification of these two factors was consistent

with the indications of key CSR by previous researchers (e.g., Griffiths 1993; Smeaton and

Griffiths 2004; Griffiths and Wood 2001). The finding that the mean score of the RPR

dimension was lower than the neutral point and the mean score of the PDR dimension was

higher than the neutral point indicated that consumers were more positive about the PDR

responsibilities carried out by the sports lottery administration of China; yet, they were less

satisfied toward the RPR responsibility implementations, suggesting the need for initiating

and enforcing regulation and prevention activities.

As a result of a two-dimension solution for the SSLA, a contingency table with four

CSR styles was formulated as an extension of the research findings of this study: Unbiased,

Inherent, Pragmatic, and Deficient. While the Unbiased style is the most preferred practice

of CSR by sports gambling administrations, the Deficient style indicates lack of respon-

sibilities in all areas of a sports gambling administration. The Inherent and Pragmatic styles

emphasize on either PDR or RPR, indicating the need to make an improvement in the other

area. Although the measurements for both PDR and RPR generate continuous data, the

CSR styles provide a useful tool for administrators and practitioners to classify and cat-

egorize CSR practices, as well as to simplify communications and thus to enhance

administrative efficiency.

Findings of this study have shown that a positive relationship between players’ CSR

responses and their demographics. The sports lottery players from different geographic

areas had varying views on the CSR carried out by local sports gambling administrations,

which was likely due to their distinctive variations in cultural tradition, living style,

consuming behaviors, and of course the local administrations. These findings were

essentially consistent with those reported in previous studies on China’s market structure,

suggesting that China is not a unified, homogenous market. Instead, China’s marketplace

experiences significant geographical and cultural differences in consumption patterns (Cui

and Liu 2000; Skinner 2002). In this study, sport lottery players of Chengdu and

Zhengzhou had different PDR and RPR perceptions of China’s sports lottery industry from

the other three cities, which might be attributable to the long history and tradition of

gambling culture in these two cities. Both cities have more than 1,000 years of history and

are renowned as cradles of Chinese civilization. As China has gambling traditions since

ancient times, the longer history a city has, the stronger and more unique the gambling

culture is. Gambling culture has been a part of Chinese lifestyle, history, and tradition, and

has integrated values and beliefs that many people approve and even encourage gambling,

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which are passed from generation to generation (Raylu and Oei 2004). Today, moderate

gambling is a socially acceptable form of entertainment in the Chinese society.

The findings of this study show that people with higher education level showed more

negative perception about RPR and PDR. These support the indications in previous studies

(Youn and Kim 2008; Vassilikopoulou et al. 2005). However, these were different from

Tian et al.’s (2011) findings that consumers with higher income and education tended to

respond to CSR neutrally in China. Likely, the differences were due to the measures

adopted in the two studies; while Tian et al.’s study adopted single item measurement, the

current study carried out rigorous steps to ensure sound measurement properties of the

SSLA scale. Hopefully, the findings of this study were more reflective of the reality;

nevertheless, replicated studies are apparently necessary.

Moreover, findings associated with education background were also reflected in the

occupation variable. Individuals from rural areas are most undereducated among the sports

lottery players, who actually showed more positive perceptions about RPR and PDR.

According to the data, the undereducated were actually the majority of the sports lottery

players, with 64.8% of them having educational level below high school. Gambling

attractions to the undereducated population is the actual situation of the entire lottery

market in China. Wang (2008), Director of China Center for Lottery Studies at Peking

University, once said that, ‘‘It can be found that the common people coming to the lottery

gambling stations are the group with low social status in China and the majority of them

are male and young. They either do not have stable job or are of low income. Meanwhile,

they are undereducated. The reasons they come to the stations include trying their luck,

escaping hardship in their real living world, and expecting to get rid of the hard life by

winning the game. The aim for lottery gambling is not to enjoy their lives, but to win the

lives. They care a lot about the success and loss, and feel sure to win the game.’’ While in

this study gender and age were not found to be related to the perceptions of CSR, a trend

appeared to form in that younger people held less negative perceptions about RPR, yet

more negative perceptions about PDR.

In terms of the relationship of perceived CSR to sports lottery consumption, the RPR

and PDR factors were found to be of different effect on sports lottery consumption

behavior in China. The RPR perception was found to be associated with a 12% increase in

the odds that the lottery consumer would be in a higher consumption category, every unit

increase in RPR perception was associated with an 11% increase in the odds that the lottery

consumer would be in a higher consumption category, every unit increase in PDR per-

ception was associated with a 13% decrease in the odds, every unit increase in RPR

perception was associated with a 16% decrease in the odds, and every unit increase in PDR

perception was associated with 11% increase in the odds. According to Cohen (1988),

these values of variance explained would fall into the range of medium effect size in a

social science study. From a practical point of view, it is really a judgmental call as these

percentages (i.e., the odds of change) are substantial in social science study settings. In

particular, the findings were of theoretical importance. Our study suggests that CSR does

influence lottery consumption in China and the odds ratios reflect the estimate of the

magnitude of the influence. On a flip side, there were close to 90% unexplained probability

and in this revision, we have recognized the continued need to study other variables

influencing sport lottery consumption behavior in the discussion section.

Overall, these findings indicate that an improvement in social responsibility activities by

sports lottery administrations would eventually lead an increase in the eventual expenditure

of consumers on sports gambling. Essentially, when consumers have trust in service

providers, they tend to increase their total volume and variety of consumptions. It is

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interesting to note that an improvement in social responsibility associated PDR will reduce

purchasing frequency but increase time spent on sports lottery related activities. In con-

trast, an improvement in social responsibility associated with RPR will increase purchasing

frequency but decrease time spent on sports lottery related activities. These findings

provided supporting evidence to findings of recent studies that were conducted in western

countries (Bhattacharya and Sen 2004; Becker-Olsen et al. 2006). PDR plays an important

role for CSR initiatives, especially for such special merchandise as sports lottery. If the

design of the sport lottery product is not proper, it will do great harm to the players (Korn

and Shaffer 1999). Determinants of the decision to gamble include not only the gambler’s

biological and psychological constitution and the situational variables, but also the

structural characteristics of the gambling activity itself. The structural characteristics of a

particular gambling activity are responsible for reinforcement, may satisfy gambler’s

needs, and may actually facilitate excessive gambling (Griffiths 1993). Over the past three

decades, a number of researchers have examined the role of structural characteristics in the

acquisition, development, and maintenance of gambling behavior (e.g., Abt et al. 1985;

Cornish 1978; Griffiths 1993, 1995; Moran 1979, 1987; Parke and Griffiths 2006; Wein-

stein and Deitch 1974). Problems with the design of structural characteristics of the lottery

product in China have led to many problem players and some social problems as well.

Sport Lotto game, for example, makes players bear the psychology of the near miss

because of its unreliable rules. Some players bought sports lottery tickets with an out-of-

control mind in an effort to win the high price; or even worse, some even commit crimes to

get funds. In 2004 when a major promotion for Sport Lotto took place, its sale amount

reached $2.4 billion (China Lottery Almanac 2007), setting a new all-time single-year sales

record. Later, the CSLAC implemented a policy to limit the number of sports lottery

purchase for the purpose of protecting the benefits of the players and stabilizing lottery

market, which appeared to be effective. In the interview, Chen Qiang, the director of

Shanghai Sports Lottery Administration Center, recalled that, ‘‘while the policy of ‘ticket

number limit’ have reduced the phenomenon of over-purchasing and resulted in a decrease

of sales amount of the sports lottery, the policy has made the consumption behavior more

reasonable and with a stable developmental trend. In fact, it has protected the benefits of

the players and the China’s lottery market.’’ ‘Happiness Online’ is another new game

issued in 2006, similar to the Video Lottery Terminals. Its feature is that the machine runs

very fast, providing the result on the spot, which attracts many players. On March 22, 2006,

the sales amount of ‘Happiness Online’ broke the sales record at 1.5 million, which became

the new sparkling star in the lottery market during that year. However, its issuance aroused

many controversies. On the one hand, it promoted the development of the lottery market;

on the other hand, it made many individuals to be problem players. Because of the

addictive nature of this game, many players actually chased losses in hoping that they

would win back money, some selling their housing for more money to buy lottery and

some even committing suicide. Some significant adjustments were made in China since

2008, including but are not limited to the following: (a) some strong addictive and habit

forming games had been terminated; (b) lottery spending had been limited to ¥200 per

person per day; (c) payouts for all gambling types were increased from 50 to 65%;

(d) business hours was adjusted from 10:00 a.m. to 22:00 p.m. every day; (e) VIP room was

canceled, shelters discarded, and monitoring video camera installed; and (f) some mis-

leading promotions, such as posters, about winning the game were prohibited. After the

adjustment of the game rules, consumer lottery-purchasing behaviors seemed to become

more rational. These examples indicate that high quality and highly-responsible products

should be produced and promoted in order to keep the healthy development of the lottery

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market. The lottery issuance and administration institutions should not focus on merely

sales volume and ignore the well-being of the players. Though such measures cannot

increase lottery sales, which may even lead to declines in sales in the short term, they

showcase the real responsibilities for the society and players. Some gambling companies in

countries with well-developed gambling industry work out some risk assessment tools to

evaluate the structural features of the games to protect the benefits of the players. To

promote responsible gaming, Finnish National Lottery Veikkaus (2009), together with the

Finnish Slot Machine Association (RAY), has developed an ethical evaluation method for

reducing and preventing potential harm to the players and society. The goal was to create a

unified evaluation method that would help pinpoint potential hazardous features from both

existing gaming products and new product ideas. Camelot (2009) used two tools, GAM-

GaRD and Game Design Protocol (GDP), to assess the potential risk a game can pose on a

vulnerable person.

The player responses to RPR and purchase frequency may relate to the unique market

environment of sports gambling in China. Because China’s lottery market began only in

recent years, the entire market is still under development. It still lacks effective supervision

from lottery issuance institutions and governmental administrations. In the process of

lottery issuance, administration institutions are lack a sense of duty; because of some

scandals that occurred at the turn of the new millennium, there are strong doubts among the

consumers about the credibility and honesty of the government lottery issuance although

many still stick to purchasing lottery tickets. The most known scandal is ‘‘Xi’an BMW

Scandal.’’ In 2004, while outsourcing issuance of lottery to private sectors was outlawed by

the legal jurisdiction, Shanxi Sports Lottery Administration Center blatantly violated the

law and contracted the selling of scratch-off sports lottery to companies in the private

sector to ensure the annual sports lottery sales and performance. The contractor took BMW

as the top reward, cheating the players on selling the lottery in the city of Xi’an, the capital

of Shanxi Province. This case had a great influence on China’s lottery market, reducing the

sale amount to $5.7 billion from $6 billion in 2003 (China Lottery Almanac 2008).

Scratch-off sports game was also pushed out of the lottery market in 2007. The ‘Dual Color

Ball Scandal’ once had a significant influence on the development of the China’s lottery

market as it was one of the best-selling lotteries in China. On February 5, 2004, during the

open ceremony of prize-claim, the televised program in close-up was not simultaneous

with the whole view of the picture, which led to a wide range of public outcry. The

supervision officers also seemed not engaged in the lottery draw. All in all, through this

instance consumers developed a belief that the lottery issuance and administration insti-

tutions cheated in the Dual Color Ball prize-claim process. To date, the negative effect of

these two cases is still not totally eliminated. Under such situation, the lottery issuance and

administration institutions should strengthen supervision and regulation and improve RPR,

which would increase the trust of public in the credibility, honesty, and social responsi-

bilities of governmental administrative agencies.

A few limitations associated with this study have been identified. First of all, this study

involved about 5,000 gamblers in five cities, which was a very small sample when com-

pared to the aggregate population in China; a larger scale study is suggested to conduct a

confirmatory study. Moreover, as the survey does not cover rural areas, the research

findings may not apply to rural residents. Future studies will need to collect data from

medium and small cities, as well as countryside, to further examine the CSR of sports

lottery administration. Certainly, similar studies need to conduct in other countries and

regions so that cross-country and cross-region comparisons can be made and the researcher

findings can be verified. Secondly, a sport lottery ticket was used in this study to attract

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sport gamblers to participate in the survey. The players were informed in advance that a

sport lottery ticket was used as an incentive if they agreed to cooperate during the process

of completing the questionnaire. Adopting this approach was based on several consider-

ations: (a) a small incentive would enhance a respondent’s willingness to cooperate as

Chinese consumers are often drawn to give-aways; (b) respondents were clearly informed

that there were no right or wrong answers in the survey form and their sincere and honest

responses were most important; and (c) although we have not found using a lottery ticket as

an incentive to boost response rate in previous studies conducted in a China’s setting, this

approach has been adopted to vary extent in studies conducted in other national settings

(e.g., Kalantar and Talley 1999; Harris et al. 2008; Robertson et al. 2005) as the incentive

is relevant to the content of the study. Regardless, the viability of adopting this approach

and its potential interference of internal validity of the study deserve further examinations.

Thirdly, after the qualitative research procedures were conducted to develop the initial

version of the scale, a pilot study was not conducted. This limitation could have hampered

the measurement properties of the scale (i.e., validity and reliability), adversely affecting

the accuracy when examine the relationships between the CSR factors and sport gambling

consumption behaviors. Future replication studies may consider adding this important step

in order to improve the internal validity of the study. Additionally, due to the exploratory

nature of this study and lack of previous research evidence, an exploratory factor analysis

was the only statistical procedure that was conducted to explore the dimensionality of the

factors in the scale. Future studies include steps to reconfirm the robustness of the factors

so as to strengthen the measurement properties of the scale and reduce errors in estimating

the influence of CSR practices of China’s sports lottery administration on preventing

problematic gambling behaviors.

Acknowledgment This study is supported by the National Philosophy and Social Science Foundation ofChina (08CTY005).

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