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Journal of Business Research xxx (2015) xxx–xxx

JBR-08345; No of Pages 7

Contents lists available at ScienceDirect

Journal of Business Research

Multilevel environment induced impulsive gambling

IpKin Anthony Wong ⁎,a, Catherine Prentice b,⁎⁎a Tourism College, Institute for Tourism Studies, Colina de Mong-Ha, Macau, Chinab Swinburne Business School, Swinburne University of Technology, Australia

⁎ Corresponding author. Tel.: +853 8506 1360; fax: +⁎⁎ Corresponding author. Tel.: +61 406 627 622.

E-mail addresses: [email protected] (I.A. [email protected] (C. Prentice).

http://dx.doi.org/10.1016/j.jbusres.2015.03.0080148-2963/© 2015 Elsevier Inc. All rights reserved.

Please cite this article as: Wong, I.A., & Prenhttp://dx.doi.org/10.1016/j.jbusres.2015.03.0

a b s t r a c t
a r t i c l e i n f o
Article history:Received 1 July 2014Received in revised form 1 December 2014Accepted 1 March 2015Available online xxxx

Keywords:Service environmentImpulsive gamblingCasinoCustomer loyalty

The study investigates the relationships among casino service environment, impulsive gambling and gamblingbehaviors. Analysis of service environment is approached from both individual and organizational perspectives.The investigation involves testing organizational service environment as amoderator and impulsive gambling asa mediator. Results indicate that casino service environment does explain significant variance in impulsivegambling which subsequently influences gambling behaviors. The mediation testing shows that impulsivegambling demonstrates partial and full mediation effects between various service environment factors andthe outcome variables. Casino service environment on an organizational level also successfully moderatesthe linkage between individual perception of service environment, impulsive gambling and gamblingbehaviors. The findings have strategic implications for both researchers and practitioners. In particular, thisstudy contributes to service and gambling research by incorporating individual and organizational environmentalfactors into consumer behavior analyses. Potential applications of the findings are highlighted for casinos andproblem counselors.

© 2015 Elsevier Inc. All rights reserved.

1. Introduction

A large body of the literature has acknowledged the role of serviceenvironment in consumer behaviors. Service environment providestangible cues about the provider's service quality, and also acts asa stimulus that influences consumers' feelings and arousals thatcompel them to approach and respond favorably to service offerings(Bitner, 1992; Hightower, Brady, & Baker, 2002; Russell & Mehrabian,1976). The results of these studies may explain why casinos areincreasingly putting emphasis on building theme-park-like proper-ties. Indeed, empirical evidence shows a strong linkage betweencasino physical surroundings and customer emotion and behaviors(Johnson, Mayer, & Champaner, 2004; Marmurek, Finlay, Kanetkar,& Londerville, 2007; Wong, 2013). Customer emotion, in return,affects his or her perception of service quality, which subsequentlyimpacts on consuming or purchasing behaviors (e.g., Prentice,2014; Prentice & Woodside, 2013; Ryu & SooCheong, 2007; Wong,2004). Emotion, in the case of gamblers, has an influence on gam-bling behavior and ultimately problem gambling (Lorenz & Yaffee,1986). In particular, customer emotion can be a cause of impulsivebuying behaviors (Weinberg & Gottward, 1982). Although impulsivebuying, compared to compulsive buying, is less likely to lead to

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tice, C., Multilevel environme08

severe outcomes, depending on the nature of purchasing and theproduct, it does cause negative consequences such as shoppingaddiction and disorder (Di Nicola et al., 2010; Evenden, 1999; Sohn& Choi, 2014). Consistent with this view and in line with the forego-ing discussion, this study examines the relationships among casinoservice environment, impulsive gambling and gambling behaviors.Gambling behaviors in the current study are operationalized intovisiting frequency (patronizing the casino), length of playingand total spending in a gaming venue. These gambling behaviors,to a certain degree, are indicative of repetitive gaming activities,which have implication for gambling addiction and problemgambling.

Previous research on the relationship between service environmentand consumer behaviors has focused primarily on the individual level.This approach has two limitations. First, although service environmentis a strategic resource that should be defined at the organizationallevel (Bitner, 1992; Hightower, 2003), the majority of researchoperationalizes it from the customer perspective at the individuallevel without considering its multilevel nature. Second, prior empiricalstudies commonly associate customers' perceived service environmentwith their behaviors while assuming that their evaluation of a particularprovider is independent from their perception of other providers. How-ever, service environment is positioned in an organizational level anddesigned congruently tomatch a provider'smarket position throughoutthe service encounter. Such an approach neglects the dependency ofcustomer service evaluation that is nested within a higher hierarchywhere services are delivered (see Mathieu, Aguinis, Culpepper, &

nt induced impulsive gambling, Journal of Business Research (2015),

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2 I.A. Wong, C. Prentice / Journal of Business Research xxx (2015) xxx–xxx

Chert, 2012). These limitations reveal a research gap in gambling studiesand prompt necessity of the current study.

In response to the limitations, this study seeks to explore the re-lationship between perceived service environment and three behav-ior outcomes (i.e., frequency of visit, length of stay, and spending in acasino) through the mediating role of impulsive gambling at the in-dividual level. It further investigates the multilevel nature of the ser-vice encounter by examining cross-level direct and moderatingeffects of casino-level service environment on the individual-levellinkage between service environment and gambler behaviors. In es-sence, the objective of the study is to examine the role of the serviceenvironment, at the individual and organizational levels, in impul-sive gambling and behavioral outcomes. This study aims to providea holistic multilevel framework that integrates the effects of thephysical setting to better understand gamblers' responses and be-haviors, as depicted in Fig. 1. The study further seeks to extend theservicescape model by investigating how the organizational-levelservice environment could moderate the effect of service environ-ment at a lower level.

2. Literature review

2.1. Service environment and impulsive gambling

The extant literature has acknowledged the role of service envi-ronment in consumer behaviors. Previous research on environmen-tal psychology sets the foundation in understanding the impact ofthe environment on human responses and behaviors (Mehrabian &Russell, 1974). In particular, stimuli from the tangible environmentalaffect consumers' emotional states and provide them with vividsensory and pleasure, which in turn changes their perceptions andbehaviors. Building on environmental psychology research, Bitner(1992) develops the servicescape model, which comprehensivelylinks service environment with various consumer behavioral out-comes (e.g., attraction, stay/explore, spend more, and satisfaction)through the role of consumer and employee responses. Bitner'sseminar work articulates the dimensionality and attributes of theservice environment and provides the theoretical background forunderstanding the details in crafting the physical setting. In particu-lar, the three core dimensions of perceived service environment –ambient conditions (i.e., temperature, air quality, noise, music),

H1b

H1a

H2

Ambient Conditions

Space and Function

Signs, Symbols, Artifacts

H1c

GamImpu

Casino Enviro

Customer Perceived Service Environment

Fig. 1. Conceptua

Please cite this article as: Wong, I.A., & Prentice, C., Multilevel environmhttp://dx.doi.org/10.1016/j.jbusres.2015.03.008

space and function (i.e., layout, equipment, facilities, and furnish-ings), and signs, symbols, and artifacts (i.e., signage, style of decor,and personal artifacts) – provide customers a holistic view of the phys-ical surrounding in the service encounter (Bitner, 1992; Lovelock &Wirtz, 2007).

From the customer perspective, service environment serves as atangible cue about the service quality of the provider (Bitner, 1992).Empirical evidence indicates that positively perceived service environ-ment leads to favorable consumer behaviors and loyalty outcomesthrough the mediating role of consumer responses such as positive af-fect and perceived value (Hightower et al., 2002). Indeed, as Bitner's(1992) servicescapemodel posits, stimuli from the service environmentinfluence consumers' sensory experience and lead to arousal and posi-tive affective responses including strong impulses to approach specificservices (Rosenbaum, 2006). Research also shows that congruence be-tween physical atmosphere and the customer leads to favorable cus-tomer evaluation of perceived service quality as well as a higher levelof approach and impulse buying behaviors in retail stores (Mattila &Wirtz, 2001). Similarly, Beatty and Ferrell (1998) acknowledges a linkbetween impulse buying and affective response.

In the context of casinos, the literature has acknowledged the im-portance of service environment in attracting gamblers and satisfy-ing their needs (Wong & Rosenbaum, 2012). Favorable serviceenvironment plays a pivotal role in engendering positive emotionsand affective responses (Finlay, Marmurek, Kanetkar, & Londerville,2010; Mayer & Johnson, 2003). In fact, contemporary casinos are aes-thetically crafted to create a theme-park-like environment that aimsto inspire people to gamble more, stay longer, and spend more. Allthe elements – the lighting and background music, the atmosphere,the furnishing (e.g., seats, tables, and chips), decor, architecture,signage, amenities and facilities – are elegantly designed to be the-matically congruent with the casino's market position and to inducea unique and pleasant experience for gamblers; thus, they would feelmore attached to the casino and subsequently engage in gambling(Wong, 2013). The Venetians, for example, built a Venice-like com-plex with riverside and Gondola ride to enthrall gamblers and pro-vide them a place for indulgence. Contemporary casinos often placethe casino floor in the central area of the property with clear signageand surrounding facilities to attract gamblers. Accordingly, we arguethat service environment as perceived by customers has a positiveinfluence on impulsive gambling.

Casino-Level

Individual-Level

bling lsion

Service nment

Frequency of Visit

Length of Stay

Total Spending

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H3

H4

H5

l framework.

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Hypothesis 1. Customer-perceived service environment is positivelyrelated to impulsive gambling.

Service environment is a commercial place that is designed to pro-vide the customerwith a unique service experience, and to differentiateone service provider from others (Pine & Gilmore, 1998; Wong & Wu,2013). Since it is a primary organizational value proposition used to in-teract with customers and satisfy their needs, it holds strategic impor-tance to the organization (Bitner, 1992; Hightower, 2003; Rosenbaum,2008). In fact, an organization's service strategy requires consistentand standardized service environment throughout each service en-counter in order to match its brand image and positioning strategy(Lovelock & Wirtz, 2007; Mattila & Wirtz, 2001). Nevertheless, Becker(1981) attests that “the way the physical setting is created in organiza-tions has barely been tapped as a tangible organizational resource”(p. 130). Indeed, despite the strategic significance of the physical settingto service providers, the extant literature largely defines it as a qualityperception from individual customers rather than conceptualizing andoperationalizing it as a strategic asset at the organizational level.

We argue that service environment and its impact on customersshould be considered at both individual and organizational levels, asFig. 1 depicts. In fact, our framework heeds the call from Russell andMehrabian (1976). The authors contend that there are two classes ofvariables that explain consumer behaviors: “Those variables de-scribing differences in environments… and those variables describ-ing differences in the persons” (p. 62). This premise addresses thedivide between the consumer-psychology view, which focuses onthe linkage between environmental stimuli and individual percep-tions, and the organizational-resource view, which focuses on utiliz-ing the environment as a strategic asset and competitive advantage.More specifically, we predict that organizational-level service envi-ronment should not only influence impulsive gambling and otherconsumer behaviors, but it should also moderate the relationshipbetween customer-perceived service environment and impulsivegambling. This view is reinforced by the institutional theory, whichposits that the organization shapes the actors' perceptions and be-haviors. The environment, as Powell and DiMaggio (1991) describe,“[creates] lenses through which actors view the world and the verycategories of structure, action, and thought” (p. 13). Such an institu-tional system and its environment exert strong effects on the indi-vidual actor's behaviors and preferences (Scott, 2001).

In a similar vein, the literature in psychology and managementfields, such as the contingency theory (Battilana & Casciaro, 2012)and person–environment fit theory (Greguras & Diefendorff, 2009), col-lectively suggests that individual outcomes are consequences of thecombined influences emanating from personal and environmental vari-ables. Cross-level interactions, which assessed the moderating effect ofthe research context on individual-level relationships, have been at cen-ter stage in recent academic literature because they help researchers gaina better understanding of how individual behaviors are contingent onthe environment that actors are embedded within (Mathieu et al.,2012). For example, the study by Grizzle, Lee, Zablah, Brown, andMowen (2009) shows that the relationship between employee customerorientation and customer-oriented behaviors (individual-level) is mod-erated by the organizational environment (e.g., customer orientationclimate), in that the individual-level relationship is strengthened in orga-nizations with a high level of customer orientation climate. Accordingly,we argue that the relationship between customer-perceived service en-vironment and impulsive gambling should be strengthened in casinosthat offer good service environment, while being weakened in casinosthat put less emphasis on the environment.

Hypothesis 2. The relationship between service environment per-ceived by customers and impulsive gambling is moderated by casino-level service environment (CSE) in that the relationship should bestronger when CSE is high.

Please cite this article as: Wong, I.A., & Prentice, C., Multilevel environmehttp://dx.doi.org/10.1016/j.jbusres.2015.03.008

2.2. Impulsive gambling and behavioral outcomes

Impulsion is characterized as choosing short-term gains overlong-term ones, and involves a tendency to act on a whim and to be-have with little consideration of the consequences (Evenden, 1999).Accordingly, impulsive buying is referred to as an unplanned deci-sion to purchase a product or service; such decision is often maderight before buying, and triggered by external stimuli of the product,causing the buyer to act irrationally and purchase the product for in-stantaneous gratification (Kalla & Arrora, 2011). The traditional con-sumer decision-makingmodel has very little influence on this buyingbehavior. Unlike impulsive buying, compulsive buying ismore inwardlymotivated, and experienced as an irresistible and uncontrollable urge topurchase or consume; it leads to adverse or severe negative conse-quences such as social, personal and/or financial difficulties (Kellett &Bolton, 2009; Valence, D'Astous, & Fortier, 1998). Compulsive buyingmay function as a means of alleviating negative feelings of stress andanxiety; the process of spending and consuming ultimately becomesaddictive and disrupts the consumer's daily life (Black, 2001). Althoughfunctionally different, impulsive and compulsive buying are interrelat-ed in that eachdemonstrates a tendency to act prematurely or inconsid-erately and often results in negative outcomes (Berlin & Hollander,2008). Impulsive buying has been claimed to be on a continuum withcompulsive buying on one end and impulsion on the other (see Engelet al., 2005). Consistent with this view, we argue that impulsive buyingeventually turns into compulsive buying when an individual tends topurchase impulsively in multiple situations. Our contention is consis-tentwith thework of Sohn and Choi (2014), which suggests that impul-sive and compulsive buying are different phases that ultimately lead toshopping addiction. This situation is particularly true in the gamblingcontext.

Casinos are no longer a place where only gambling takes place.Resort-style facilities, especially those in Las Vegas, Macau, GentingHighlands and Singapore, are more appealing to recreational tour-ists, who appreciate the celebrity chefs, concerts, indoor and outdoortheme parks that casino resorts offer exclusively. Although not regularor professional gamblers, they may place a few bets while stimulatedby casino ambience and atmosphere, or lured by peers' winnings (seePrentice, 2014). An initial impulse bet may turn into repetitive betting,given a lucky win that prompts a desire to win more, or by losing thatdrives the punter to win back. Winning for money and winning backlosses have been identified as gambling motivation factors (Lee, Lee,Bernhard, & Yoon, 2006). On the basis of the continuum theory (Engelet al., 2005), initial unplanned gambling (impulsive gambling) ulti-mately leads to repetitive gambling which likely turns into compulsivegambling or problem gambling.

Previous research on compulsive gambling has analyzedmotivationfactors and focused on consequences. To better understand antecedentsof compulsive gambling, we argue that impulsive gambling is an initialcause that leads to subsequent gambling behaviors manifested in visit-ing the casino frequently (visiting frequency), staying longer in the casi-no (length of stay), and spending more in the gaming area. Consistentwith this discussion, the following hypotheses were proposed:

Hypothesis 3. Impulsive gambling is positively related to gamblers'visit frequency to a specific casino (FOV).

Hypothesis 4. Impulsive gambling is positively related to gamblers'length of stay in a specific casino (LOS).

Hypothesis 5. Impulsive gambling is positively related to gamblers'total spending in a specific casino.

Most research on gambling behavior and addiction is approachedfrom a psychological perspective and focused on personal factors in-cluding personality and demographic information (Clarke, 2006;




Stinchfield, 2004). Theory of planned behavior suggests that behavioris predicted by intention which is influenced by the individual's atti-tudes and subject norms (Ajzen, 1991). However, from the serviceman-agement and marketing perspective, many gaming researchers havedetermined that casino service environment (including the casinoservicescape, ambience, and physical surroundings) has influence oncustomer (gambler) satisfaction, desire to stay and intention to revisit.For example, Wong and Fong (2010) show that casino service environ-ment is themost important predictor to gambler satisfaction and revisitintention. Prentice and Woodside (2013) find that gambler perceptionof casino ambience and facilities have influence on both their firstchoice of visit to the casino and on their propensity to switch venues.Although these factors may not determine gambler intention and be-haviors, Lio and Rody's (2009) study indicates that casino service envi-ronment can enhance gambler mood and gaming experience in thecasino, which prompts their gambling behaviors. On the basis of theforegoing discussion, the following hypothesis is proposed:

Hypothesis 6. The relationship between impulsive gambling and FOV,LOS, and total spending is moderated by casino-level service environ-ment (CSE) in that the relationship should be strongerwhen CSE is high.

3. Methods

3.1. Sample

The study was undertaken in Macau casinos. The survey was con-ducted at two occasions for the purpose of the study. A systematic sam-pling method was adopted with a skip interval of three. Prospectiverespondents were intercepted at the exit of the survey casinos. Thefirst sample includes 1393 completed responses from 35 casinos, withan average group size of 40 (ranging from 20 to 160). The second sam-ple includes 530 complete responses that represent 22 casinos with anaverage group size of 24 (ranging from 20 to 50). The casino IDs forthe two samples were matched to create a linkage between them. Thequestionnaire used in this research was developed in English and thentranslated in Chinese using the back-translationmethod by professionaltranslators.

Of the respondents from the first sample, 52.1% were males; 36.5%were between the age of 21 and 30 while 28.9% were between the ageof 31 and 40; 65% were from mainland China, 23% were from HongKong, and the rest from other parts of the world. Of the respondentsfrom the second sample, 47.9% were males; 28.7% were between theage of 21 and 30, 40.2% between the age of 31 and 40; 38.6% held a bach-elor's or higher degree while 32.6% received up to a high school educa-tion; 89.5% were from mainland China, and the rest from Hong Kong.

3.2. Measures

Overall casino service environmentwasmeasured based on two itemsadopted from Hightower et al. (2002), and each itemwas assessed by aLikert-type scale ranging from 1 (strong disagree) to 5 (strongly agree).Respondents from Sample 1were asked to rate the overall evaluation ofa casino's service environmentwith statements such as “Generally, I amimpressed andpleasedwith the environment.” The scale has a reliabilitymeasure with Cronbach's alpha (α) of .75. Since our focus is on overallcasino-level service environment, we averaged and then aggregatedthe two items. We diagnosed the intermember reliability indexes(ICC[1] = .36, ICC[2] = .93, F[21, 568] = 14.65, p b .001) and medianinterrater agreement (rwg[j] = .78). The results support aggregating in-dividual perceived service environment to the casino level.

Customer-perceived service environment was measured by a 15-itemservicescape scale from Hightower et al. (2002). Respondents fromSample 2 were asked to rate each of the items based on a 5-point Likertscale ranging from 1 (strongly disagree) to 5 (strongly agree). The scale


assessed three dimensions of the construct based on Bitner's (1992)work: ambient conditions (e.g., “The casino is clean”), space and function(e.g., “The physical facilities are comfortable”), and signs, symbols, andartifacts (e.g., “The signs are useful to me,” “The materials used insideare pleasing and of high quality”). The three subscales demonstrate ad-equate reliability with αs ≥ .73.

Impulsive gamblingwasmeasured by four items adopted fromBeattyand Ferrell's (1998) impulse buying behavior scale. Respondents fromSample 2 were asked to rate each of the items based on a 7-point Likertscale anchored by 1 (strongly disagree) and 7 (strongly disagree). Ex-amples of statements include: “When I stayed in this casino, I felt aspontaneous urge to gamble” and “When I stayed in this casino, mymind kept thinking about gambling.” The scale is fairly reliable withan alpha of .91.

Sample 2 also includesmeasures of gamblers' behaviors such as theirlength of stay in a casino (LOS in hours), frequency of visit to the casino(FOV), and total spending in the casino in the most recent visit.

We addressed common method bias (CMB) by using multipledata sources. To further diagnose CMB in Sample 2, the single-factor method was used. The results show that CMB is not a concernfor the study (χ/df=9.34, p b .001). We diagnosedmulticollinearity,and the results indicate that it is not a limitation in the study as thevariance inflation factors are below 2.0.

4. Findings

Table 1 presents the descriptive statistics and zero-order correla-tions of the constructs of interest. The results indicate significant corre-lations among the service environment measures and impulsivegambling (r ≥ .36, p b .001), while the correlations among the serviceenvironment measures and the three endogenous behavioral variablesare substantially weaker. On average, the gamblers spent about 1.74 hin a casino, visited the casino more than once (M = 1.61), and spendabout USD $554 in the casino. While total spending is significantly cor-related with length of stay (LOS) (r = .11, p b .05), it is not correlatedwith frequency of visit (FOV) (r = .02, n.s.).

To test the hierarchical nature of the proposed relationship, hierar-chical linear modeling with HLM 6.06 was used. Control variables in-clude gamblers' demographics such as gender, age, and educationlevel. Hypothesis 1 postulates a relationship between the three dimen-sions of customer-perceived service environment (i.e., servicescape)and impulsive gambling at the individual level. Results from Model1 reveal that customer-perceived ambient conditions (b = .16,p b .10); space and function (b = .21, p b .01); and signs, symbols,and artifacts (SSA) (b= .19, p b .05) are positively related to impulsegambling, supporting Hypothesis 1 (see Table 2). Hypothesis 2 pro-poses a cross-level moderating effect of the service environment atthe casino level on the relationship between the three servicescapedimensions and impulse gambling at the individual level. First, wetested the cross-level direct main effect leading from the casino-level service environment to the gamblers' impulsive gambling be-haviors. Results show a significant relationship of the two variables(γ = 1.04, p b .01). Next, we tested the cross-level interaction inModel 2. The results indicate only the casino-level serviceenvironment × SSA interaction is significant (γ = .39, p b .05), par-tially supporting Hypothesis 2. To graphically illustrate the interac-tion effect, we followed Aiken and West (1991) and defined themoderator as high and low casino service environment by plus andminus one standard deviation from the mean (see Fig. 2). The resultssuggest that the effect of customer-perceived SSA on impulse gam-bling is positive only when a casino offers a good overall serviceenvironment.

We tested Hypotheses 3–5, which postulate a direct relationshipleading from impulse gambling to three behavioral variables – FOV,LOS, and total spending – in Model 3. The results in Table 3 indicatethat the effect of impulse gambling is significant for FOV (b = .11,



Table 1Descriptive statistics and correlations.

Mean S.D. 1 2 3 4 5 6 7

1. Casino service environment 3.35 .54 (.75)2. Ambient conditions 3.38 .70 .37⁎⁎⁎ (.79)3. Space and function 3.42 .80 .31⁎⁎⁎ .55⁎⁎⁎ (.73)4. Signs, symbol, artifacts 3.37 .72 .56⁎⁎⁎ .57⁎⁎⁎ .56⁎⁎⁎ (.81)5. Gambling impulsion 4.45 1.32 .41⁎⁎⁎ .36⁎⁎⁎ .38⁎⁎ .48⁎⁎⁎ (.85)6. Length of stay 1.74 1.12 .24⁎⁎⁎ .15⁎⁎ .18⁎⁎⁎ .22⁎⁎⁎ .22⁎⁎⁎

7. Frequency of visit 1.61 1.95 .12⁎⁎ .05 .13⁎⁎ .13⁎ .14⁎⁎ .15⁎⁎⁎

8. Total spending 554.06 1469.27 .12⁎⁎ .13⁎⁎ .07 .10 .11⁎ .19⁎⁎⁎ .02

Note:Internal consistency reliabilities (Cronbach's alpha) are on the diagonal.Casino-level means assigned down to the individual gamblers.Correlations between individual and casino variables based on biased N = 530.⁎ p b .05.⁎⁎ p b .01.⁎⁎⁎ p b .001.


p b .05) and spending (b=77.81, p b .05), but not for LOS (b= .04, n.s.);the results support Hypotheses 3and 5, but not Hypothesis 4. Next, wetested Hypothesis 6, which proposes a cross-level moderating effect ofthe service environment at the casino level, on the relationship betweenimpulsive gambling and the three endogenous behavioral variables.Wefirst tested the cross-level direct main effect leading from the casino-level service environment to the three endogenous variables. Resultsshowa significant cross-level effect emanating from casino-level serviceenvironment to FOV (γ=.45, p b .01), LOS (γ=.47, p b .01), and spend-ing (γ = 285.34, p b .05). Next, we tested the cross-level interaction inModel 4. The results indicate that only the casino-level serviceenvironment × LOS is significant (γ= .20, p b .05), partially supportingHypothesis 6. We graphically illustrate the casino-level serviceenvironment × LOS interaction by following the procedure detailedabove (see Fig. 3). The results suggest that the effect of impulse gam-bling on LOS is positive if a casino offers a good overall service environ-ment, while the effect is negative if a casino provides a low-qualityservice environment. That is, impulsive gambling has a divergent effecton people's length of stay in a casino, in that the effect is contingent onthe casino's overall service environment. A comfortable and well-designed environment keeps people in the casino and wagering more;and hence, they spend more (r LOS, Spending = .11, p b .05).

We tested the mediating effect of impulsive gambling with re-spect to the effect emanating from customer-perceived service envi-ronment to the three endogenous variables using the Sobel test.Results suggest that impulsive gambling fully mediates the relation-ships leading fromambient conditions and SSA on FOV, LOS, and spend-ing as well as the relationship leading from space and function on LOS.In addition, impulsive gambling partially mediates the relationshipsleading from space and function to FOV (Z=1.98, p b .10) and spending

Table 2Results of hierarchical linear modeling estimates of gambling impulsion.

Model 1 Model 2

Main effectsCasino-level service environment (CSE) 1.04⁎⁎ 1.04⁎⁎

Ambient conditions .16† .17⁎

Space and function .21⁎⁎ .20⁎⁎

Signs, symbols, and artifacts (SSA) .19⁎ .15⁎⁎⁎

Cross-level moderating effectsCSE × ambient conditions – − .12CSE × space and function – .05CSE × SSA – .39⁎

R2 .42 .44

Parameter estimates are unstandardized.⁎ p b .05.⁎⁎ p b .01.⁎⁎⁎ p b .10.


(Z = 1.71, p b .10). We further tested the cross-level mediating effectleading from casino-level service environment to the three behavioralvariables through impulsive gambling. The results support a partial me-diating effect of impulsive gambling on the relationship betweencasino-level service environment and FOV (Z = 1.98, p b .05) andspending (Z = 1.87, p b .10), and a full mediating effect of impulsivegambling on the relationship between casino-level service environmentand LOS (Z = .59, n.s.).

5. Discussion

The present study investigates the relationships among casino ser-vice environment, impulsive gambling and gambling behaviors. The in-vestigation is approached from both individual and organizationallevels. The study analyzes themediating role of impulsive gambling be-tween individual perception of casino service environment (referred toas ICSE) and gambling behaviors, aswell as themoderating effect of ser-vice environment on the organizational level (referred to as OCSE). Ser-vice environment on the individual level is operationalized into casinoambient conditions, space and function, and signs, symbols and arti-facts. Analyses of gambling behaviors are focused on length of stay,gambler visiting frequency and total spending in the casino. Findingsfrom testing the relationships among service environment, impulsivegambling and gambling behaviors show that both ICSE and OCSE havesignificant influence on impulsive gambling, which in turn has an im-pact on gambler visiting frequency and total spending in the casino.The mediation testing indicates that impulsive gambling partially orfully mediates the relationship between casino service environmentand gambling behaviors. OCSE demonstrates significant moderation ef-fects on the relationship between casino signs, symbols and artifacts,

2

3

4

5

6

Low SSA High SSA

Impu

lsiv

e G

ambl

ing

Low Casino Service Environment

High Casino Service Environment

Fig. 2. Casino-level service environment × signs, symbols, and artifacts interaction ongambling impulsion.



Table 3Results of hierarchical linear modeling estimates of frequency of visit, length of stay, andtotal spending.

Model 3 Model 4

FOV LOS Spending FOV LOS Spending

Main effectsCasino-level serviceenvironment (CSE)

.45⁎⁎ .47⁎⁎ 285.34⁎ .45⁎⁎ .47⁎⁎ 284.52⁎

Gambling impulsion .11⁎ .04 77.81⁎ .11⁎ .02 75.07⁎

Cross-level Moderating effectsCSE × gambling impulsion – – – .01 .20⁎ 46.66R2 .08 .13 .09 .08 .14 .09

Parameter estimates are unstandardized.⁎ p b .05.⁎⁎ p b .01.


and on the relationship between impulsive gambling and length of stay.Discussion involving these findings follows.

5.1. ICSE, OCSE and impulsive gambling

This study sheds new light on academic inquires in regard to theservice environment. Prior research by and large examines the rela-tionship between the physical setting and customer behavioral out-comes at the individual level. As a result, discussions on the role ofthe service environment are resolved around and can only be in-ferred via customer perceptions rather than as a firm's tangibleasset and value proposition. This study takes a different approachby incorporating both individual-level and organizational-level eval-uations of the service environment to understand their joint effecton impulsive gambling and gambling behavioral outcomes. In partic-ular, this study bridges the gap in the literature by assessing how thecombined effects of ICSE and OCSE influence people's gambling urge.Furthermore, OCSE enhances the influence of the tangible casino en-vironment (e.g., signs, symbols and artifacts) on impulsive gambling,demonstrating a significant positive moderating effect. That is, thefindings imply that a casino's signage and artifacts trigger people'simpulsion to gamble only in casinos with luxurious and exquisitephysical designs.

5.2. Impulsive gambling, OCSE and gambling behaviors

Results from testing the relationship between impulsive gamblingand gambling behaviors indicate that the former has a significant im-pact on gambler visiting frequency and total spending in the casino,but not on length of stay. Nevertheless, OCSE shows a significantcross-level direct positive effect on all three gambling behavioral out-comes, warranting the critical role of physical setting as a viable organi-zational asset. In otherwords, a casino's overall environment plays a key

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Low Gambling Impulsion High Gambling Impulsion

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Low Casino Service Environment

Fig. 3. Casino-level service environment × gambling impulsion on length of stay.


role in prompting gamblers to stay longer, visitmore, and spendmore inthe casino. OCSE also moderates the relationship between impulsivegambling and length of stay. This implies that people's gambling impul-sion compels them to stay longer in a casino only if the casino offers anenvironment representing an oasis for indulgence. On the contrary,these people are likely to leave sooner if the casino fails to do so(perhaps to gamble at another casino with a better environment).

The association of impulsive gambling with frequency of visitingthe casino and spending is plausible. Impulsive gambling is indica-tive of gamblers' spontaneous urge to gamble while staying in the ca-sino. Such an urge (intention) or impulse prompts further action orbehaviors (gambling). Winning evokes a thought or hope of morechances of winning; loss compels gamblers to win back by castingmore bets. When the gambling budget on that trip is exhausted,the urge to win back promotes more trips to the casino. Such acycle results in more spending and visits to the casino. The volumeof gambling expenditure and visiting frequency are not necessarilyrelated to the length of stay in the casino. A large bet can beexhausted in seconds. However, some gamblers enjoy the casinoamenities and atmosphere. They prefer to stay in the gaming areawithin the casino property even without placing any bets, appreciat-ing varieties of buffet, the exquisite décor and other gamblers' recre-ational enthusiasm (see Prentice, 2014). This accounts for thepositive moderating effect of casino service environment on lengthof stay in the casino.

5.3. The mediation relationship between ICSE or OCSE and gamblingbehaviors

The appearance of a full mediation in perceived ambience and tangi-ble amenities in the casino reveals the importance of gambler attitudesin determining their behaviors. This finding has profound implicationsfor casino practitioners as well as for problem-gambling counselors.Froma recreational gaming perspective, thisfinding provides guidelinesfor casinos on boosting gaming consumption bymanaging gambler per-ception and attitudes. Similarly, problem-gambling counseling shouldbe approached from moderating gambler attitudes to regulating prob-lem behaviors.

The partial mediation between space and function and visitingfrequency or spending indicates that ICSE with respect to a casino'sgrand design has a direct influence on gambling behaviors, and thatthemed, integrated casino resorts do appeal to gamblers and accountfor their patronage and gaming activity. This finding explains whygamblers opt for coming to casino resorts despite the existence ofmany other gambling opportunities such as online gambling (andplaying Mahjong at home, in the case of Chinese). Results frompost hoc analyses of a partial mediation relationship between OCSEand gambling behaviors indicate that casino environment on the or-ganizational level also has a direct effect on gambler visiting fre-quency and casino spending.

6. Implications

The findings generated from this study yield theoretical and mana-gerial implications. Theoretically, the study contributes to the servicemanagement literature by analyzing the influence of service environ-ment on customer intentions and behaviors. In particular, the analysesof environmental factors are approached fromboth individual and orga-nizational levels. This approach bridges the gap resulting from focusingon individual perception identified in previous research. The presenceof a significant moderation effect demonstrated by the organizationalservice environment supports the approach. In particular, this study ad-vances the service literature by understanding the joint effect of serviceofferings and environmental factors at different levels of the service en-counter. It takes a leap forward in service research by enriching the the-oretical understanding of the service quality domain in respect to how a




firm's capabilities and resources could affect the relationship betweenindividual-level service perceptions and consumer behaviors.

From the consumer behavior perspective, this research enriches thetheory of planned behavior proposed and tested by Ajzen (1991) by an-alyzing a hierarchical relationship of perception (perceived service en-vironment), attitudes or intention (impulsive gambling) and behavior(gambling activities). The study also contributes to problem-gamblingresearch by incorporating service environment factors into the analysisof impulsive gambling. Previous research on problem gambling is pri-marily focused on individual factors. Understanding the influence of or-ganizational factors provides a fresh prospect for counselors lookinginto problem gambling.

Practically, understanding the influence of service environmenton gambling activities would help casino practitioners identify ap-propriate factors for boosting consumption. However, the mediatingeffect explained by impulsive gambling in the relationship betweencasino service environment and gambling activities cautions casinopractitioners to avoid promoting the factors that may trigger com-pulsive gambling behaviors. Casinos should focus on managing ormoderating service factors in relation to casino tangibles that exertdirect effects on gaming activities. The findings of this research alsoprovide guidelines for problem-gambling counselors to undertakecollaborative efforts with casino management for more effectivecounseling and treatment. Particularly, they should focus on the ele-ments that are fully correlated to impulsive gambling.

7. Limitations and future research

Although this research demonstrates a significant contribution toboth literature and practitioners, a number of limitations arise. Thestudy analyzes the influence of casino service environment on gamblingbehaviors from both individual and organizational perspectives. Incor-poration of other organizational factors such as marketing promotionswould provide a broad perspective on the impact of non-individual fac-tors on gambler behaviors. Impulsive gambling in the current study isprimarily focused on impulsive gambler intention to gamble. Includingother problem-gambling scales that measure gambling consequences(such as the Canadian Problem Gambling Inventory) may providemore insights into the environment–problem gambling relationship.The sample frame of this studymay limit the generalizability of applyingits findings to other contexts. Nevertheless, this study offers gamblingresearchers a new perspective on approaching problem gamblingfrom both individual and organizational levels.

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