Matthew Hill – Director of regulatory risk and analysis, speech at World Regulatory Briefing, Thursday 10 September 2015
Although we are concerned that the new Culture Secretary has previously expressed the view that gambling1 is “a legitimate entertainment activity” with “considerable scope to reduce and simplify the current burden of regulation”, we hope that he will act on the recommendations2 of the select committee he chaired in 2012 and address (in his words) “the worrying lack of proper research to inform policy”.
There is currently a lack of proper independent research into the prevalence / incidence of gambling addiction and no risk assessment of the harm products may cause before they are made available to consumers.
This can only be made possible by imposing a statutory levy on the gambling industry to fund research and by removing the industry controlled Responsible Gambling Trust as the distributor of those funds. As Secretary of State, he has the power to implement this without further legislation.
1On 24 July 2012 – John Whittingdale MP, Chair of the Committee, said:
“Gambling is now widely accepted in the UK as a legitimate entertainment activity. We took a lot of evidence in this inquiry, from all sides, and while we recognise the need to be aware of the harm caused by problem gambling, we believe that there is considerable scope to reduce and simplify the current burden of regulation and to devolve decision-making to a more local level. However, given how emotive an issue gambling is in many quarters, there is a worrying lack of proper research to inform policy: this is something that needs to be addressed.
2Report: The Gambling Act 2005: A bet worth taking? 12 July 2012
However, should one or more sectors of the gambling industry fall short in their duty to fund research, education and treatment programmes, the Government should implement a compulsory levy on those sectors.
Jim Orford, Gambling Watch UK, January 2015
Initial suspicions about the independence of this research programme
The first series of reports of the programme of research on machine gambling commissioned by the Responsible Gambling Trust (RGT) are out. The results were presented to an audience largely consisting of industry representatives at a conference held in London on 10th December. This is important research not least because those of us who have been arguing for something significant to be done about Fixed Odds Betting Terminals (FOBTs) in betting shops were told that no policy decisions would be taken until this research had reported. We were always suspicious about this, suspecting that it was a way of avoiding taking any action. We were suspicious because, as we have repeatedly pointed out, the current British system of funding and commissioning research does not guarantee its independence from the industry. RGT is ‘an industry led body’ and was always unlikely to support research which might threaten the massive profits which the industry now makes from FOBTs. It always seemed likely that the machines research programme would follow the industry lead in focusing on problem play and problem players rather than on problem products. This was confirmed early on in the reports of the research where it is repeatedly stated that the main purpose of the programme was ‘to identify problem gamblers and harmful patterns of play’. The large bulk of the reports, and of discussion at the 10th December conference, has focused on trying to predict problem individuals and sessions of play. Suspicions were intensified because the research has been conducted by a consortium including the much respected NatCen and a company called Featurespace which has a history of contracts with the gambling industry which is represented on its board.
A survey of loyalty cardholders: nearly half were found to be problem or at-risk gamblers and most held negative attitudes towards the product
One of the most interesting reports in the series gives us an initial analysis of a survey, using a number of questions similar to those used in the 2010 British Gambling Prevalence Survey (BGPS), of those holding loyalty cards with Ladbrokes, William Hill or Paddy Power. The response rate was estimated at only 17 to 19% and those who agreed to take part in the survey tended to be more engaged gamblers, but the procedure for weighting the data was able to compensate for that to some degree. The most striking feature of the results to me was the extremely high rate of problem gambling (Problem Gambling Severity Index [PGSI] scores of 8 or more) – a massive 23% – with a further 24% scoring as ‘moderate risk’ (scores of 3 to 7). Rates of problem gambling were particularly high amongst those who were unemployed (38%) and were also high amongst those who gambled on a larger number of forms of gambling, those in the lowest of five income groups, those in England who lived in the most deprived areas, those who were economically inactive because of long-term sickness, and members of BME groups.
Two attitude statements, identical to those used in the BGPS but in this case relating specifically to machine gambling, were also included in the survey. Asked whether it ‘is a harmless form of entertainment’, 54% disagreed (24% strongly) and 29% agreed (only 5% strongly). Asked whether it ‘should be discouraged’, 41% agreed (19% strongly) and 37% disagreed (7% strongly). You really might expect loyalty cardholders to be more positive than that. The majority it seems are not very loyal when it comes to commenting on the product for which they hold a loyalty card!
Industry betting transaction data: large minorities of players lose large amounts of money in short periods of time
Other reports looked at betting transaction data provided by the five big bookmaking companies. The size of the database is huge – more than 6.7 billion bets placed in over 32,000 gambling machines in over 8,000 betting shops! In England, 40% of all these bets were placed in betting shops in the 20% most deprived areas – not surprisingly, since this is where 38% of all the betting shops are located (there was a similar concentration of bets in more deprived areas in Scotland). The average bet size was just over £5 (nearly £6 in the 20% most densely populated areas and nearly £7 in London, and nearly £10 after 10 p.m. at night).
One of the most interesting things is how stake size and expenditure of money and time varied by whether a betting session only involved betting on B2 machines (the FOBTs), only on B3s (faster, low stake, jackpot, slot-type machines), or involved both types of machine. It needs to be borne in mind, however, that it is not always obvious from the data when one ‘session’ finishes and another starts. Hence, some arbitrary decisions had to be made in order to break up the transactional data into ‘proxy sessions’. The method for doing this was complicated and there is a suspicion that it may have resulted in breaking the data up into unrealistically short sessions – the median session length was just under 4 minutes which will seem unrealistic to some (the mean was just over 11 mins). Nevertheless, the results are interesting. Not surprisingly, the mean stake per bet during B2-only sessions was £14, much higher than for other types of session. At the 90th percentile it was £38 and at the 95th percentile £65, showing that a large minority of stakes in such sessions are many times higher than the stakes that are possible on B3 machines. Interestingly, though, when it comes to expenditure in sessions of different types, B2-only sessions were no more costly than B3-only sessions, in terms of either money (a mean loss of just over £6 for both types of session) or time (a mean of just under 10 minutes for both types), with the highest means being for sessions that involved both types of machine (a mean loss of just over £14 and a mean session length of a bit over 20 mins). An indication of the large amounts of money that people are losing in quite short periods of time is given by the figures for, say, the 95th percentile for monetary loss which corresponds to a loss of £105, and the 95th percentile for length of session which corresponds to a bit over half an hour.
Linking transactional and loyalty cardholder survey data: prediction of problem gambling from transactional data is poor (and the report of this part of the programme displays bias)
About 4,000 of the loyalty cardholders who agreed to take part in the survey also agreed that their results could be linked to the betting transactional data. A particular aim was to determine what parameters of machine play best predicted whether someone had a score on the PGSI indicating a gambling problem. The analysis started by testing a ‘baseline’ model based on the ABB (Association of British Bookmakers) social responsibility code introduced a few months ago. The best prediction was provided by an expenditure cut-off of £30 (the £250 limit mentioned in the code was far too high and time expenditure added little to the prediction). But that cut-off was not very successful since the best it could do was to identify 60% of the problem gamblers at the expense of 40% of non-problem gamblers being false positives. Compared to that baseline model, it was possible to improve the prediction of problem gambling by using the best combination of a large number of factors from the transactional data set. These factors included, ‘number of playing days’, ‘maximum weekly winnings’, and ‘average daily loss’. The report says that stake size was notable by its absence but stakes did appear in the list of predictors in the form of ‘average daily player total stake’ and ‘number of stake levels’.
In the discussion of these results the authors say that they have shown that they can predict problem gambling and that there is therefore ‘a bright future for behavioural analytics’ in the area of social responsibility and gambling. This really seems to be over-optimistic and to smack of special pleading. Of course no one expects perfect prediction but even the best was hardly impressive. For example, 50% of problem gamblers could be identified but only at a cost of a false positive rate of 25% amongst non-problem gamblers. Since the latter are much the larger group, this represents an unacceptably high false-positive rate. In other words at even a modest level of sensitivity, specificity is unacceptably low. Further analysis did suggest that many of the false positives might be at-risk gamblers.
Unlike the report on the survey of loyalty cardholders (the first author for which was Heather Wardle of NatCen), that report (first authored by Dave Excell of Featurespace) was noticeably less careful. As well as making a point of noting the absence of stake size in their best predictive model, they say in the discussion that, because no one variable alone was predictive (how could it have been!), ‘The focus should shift away from regulating particular parameters, such as stake size, but take a balanced rounded approach which considers the player, the product and the environment’, a clear reference to the debate about high stake FOBT machines which have been so controversial and which were the stimulus for setting up this programme of research in the first place. This report also repeatedly refers to the skewedness of the data (as if this was a surprise!), ‘a small number of extreme values’, the majority of players exhibiting ‘minimal values’ (as an example, ‘only one in 10 will play 40 times a month’!), and most variables following an exponential curve so ‘large values… are very rare’. That is a coded way of saying: Look how moderate almost all machine play is and how rare is immoderate or irresponsible gambling!
There is much confusion and mistrust about ‘return to player’ (RTP) messages
Amongst a number of other projects which contributed to the overall research programme was a small-scale qualitative study exploring players’ understanding and opinions about RTP information. Although participants were split between those who felt that such information was useful and those who did not, a main finding, perhaps not unexpectedly, was that messages about RTP were mostly found to be unclear and/or inaccessible. There was too much technical language, the mathematical concepts involved were not easy for everyone to understand, and the English-only language was an additional problem for some.
A laboratory experimental study suggests that staking impairs decision-making
This experiment was conducted with 32 regular but non-problem gamblers. The authors fully acknowledge the limitations of an artificial experiment like this, but there were some indicative findings. Decision-making, which is one aspect of ‘executive functioning’, was impaired, although this happened at both stake levels used in the experiment (£20 and £2) when compared with the control condition in which no money was staked. Unexpectedly this occurred both when winning as well as when losing. A conclusion drawn by the first author in his talk at the meeting was that structural characteristics do affect decision-making and that the product therefore does matter.
The British gambling research agenda has been hijacked by the gambling industry
I have made the comment before, that this programme of research, although there is much about it which is very interesting, is a good example of how the gambling research agenda has been hijacked by the gambling industry and those who have been taken in by their overall view of things. One obvious indication of this is the makeup of the organisations that have collaborated to sponsor, oversee and carry out the research. In an attempt to provide some independence from the industry, a Machines Research Oversight Panel was set up. Alex Blaszczynski, a well-known Australian gambling researcher whose views on gambling policy are known to be conservative, industry-supporting ones, chaired the Panel. Representing the Panel at the conference Paul Delfabbro stated that, despite industry support for the machines research programme, it did seem that the work had been independently carried out. This is really to miss the point. The research was probably carried out, and mostly reported, without direct influence by the industry, and that is particularly likely to be true of those parts of the programme led by NatCen. The point is that the research required the collaboration of the industry who provided access to much of the data, and the very nature of the research and the questions being asked are part of a whole framework of ideas about ‘responsible gambling’ which is industry-friendly and not too industry-challenging.
One then has to ask about members of the collaborating research team. NatCen has an excellent record of carrying out independent research and in my opinion is itself above reproach. This can not necessarily be said, however, about the other research partners, particularly Featurespace which has a history of working with the gambling industry and has contracts with the industry. As already noted, that part of the report led by Featurespace was much less cautious in drawing conclusions and Featurespace has been accused of drawing unwarranted, industry-favourable, conclusions in a press release and tweets prior to the conference. The front cover of the printed programme for the conference day bears the Featurespace logo alongside logos for igt (‘The industry’s leading manufacturer of gaming machines’), Rank (owners of Grosvenor Casinos), and Joelson Wilson (a law firm that ‘advises remote gambling operators and suppliers, acting for spread-betting companies, online casinos and major betting websites’).
The likely conclusions that the industry and their supporters will draw from the programme of research so far came out in the final panel discussion at the conference. Matthew Hill of the Gambling Commission summed up for me the whole problem with the way the research programme has been set up by saying that the takeout message was that ‘we should be looking at people not the product’. That seems to be strange coming from the body that is charged with regulating the industry! Richard Glynn, Chief Executive of Ladbrokes, was clearer still in concluding that, ‘it’s not the product’. The keyword for him, to summarise the research findings so far, was ‘complex’ – very convenient of course for an industry making huge profits out of a dangerous activity. Alex Blaszczynski made essentially the same point at the end of his written introduction from the Oversight Panel: ‘… at this stage, it would be inadvisable to rush policies on the basis of these foundational studies… more would be achieved by a strategic approach compared to fragmented, disjointed and potentially costly policies that fail to achieve their objective’ – in other words, don’t do anything about FOBTs now. The final word went to Richard Glynn who, in response to my suggestion that the research agenda had been hijacked by the industry, referred to ‘provocateurs’, amongst whom I presume he counted me as one!
Kiwi tastes a golden nugget. It’s delicious.
Script, direction, animation: Andreas Hykade
Animation, artwork: Angela Steffen
Music, sound design: Heiko Maile
Postproduction: Ralf Bohde
Production management: Bianca Just
Funding: FFA Berlin
Studio FILM BILDER 2014
- The present system of financing gambling treatment, prevention and research through an annual voluntary levy of approximately £5-£6 million administered by the industry-led Responsible Gambling Trust, does not command respect and should be reformed. It should be replaced by a mandatory levy, including a proportionate contribution from National Lottery takings, substantially increased in size (to at least £50 million annually), and administered by a body that is completely independent of the industry.
- Treatment, prevention and research should be decoupled so that the Responsible Gambling Trust no longer commission research and instead projects are selected by national research councils supported by ring-fenced revenue. This decoupling would enable a new knowledge base to grow and restore faith in field. The current arrangements are completely inappropriate and contrary to best practice in alcohol and tobacco research.
- A minimum age of 18 years should apply to all electronic gambling / gaming machines (excluding coin-push and prize-grab games) whatever their stake and prize sizes. This would remove the anomaly whereby children and young people in Britain, unlike in other jurisdictions, are permitted to play on category D machines. The present position is inconsistent with a major purpose of the Gambling Act 2005, to protect children from harm from gambling.
- Television advertising of any form of gambling should not be permitted before 9 p.m. This would also bring regulations more into line with the principle of protecting children from harm.
- In Government, gambling should be seen as a cross-department issue, with the Department of Health, Home Office, and Department for Culture Media and Sport having regular and ongoing inputs. The Minister with chief responsibility for gambling should be a Department of Health Minister, reflecting an important shift towards seeing gambling first and foremost as a public health matter.
- Fixed Odds Betting Terminals (FOBTs), which offer high-stake gambling on virtual casino-type games, should not be permitted in venues outside casinos. This would deal with what has become the most dangerous form of highly accessible gambling and would reverse the process whereby high street betting shops are becoming town centre ‘mini-casinos’.
- Any proposed new form of gambling, mode or type of venue, should be subject to a full social, health and economic impact assessment. This would be designed to avoid the kind of mistake that was made when, some years ago, FOBTs were permitted in British betting shops.
- A national programme of treatment for problem gambling should be put in place ensuring that health services in all areas include facilities for the treatment of those with gambling problems and for their families.
- The regular, three-yearly, British Gambling Prevalence Survey should be reintroduced, but with a better balance between questions about gamblers and questions about the products they gamble on.
The national wealth service: Problem gambling is a health issue
Whilst it is good to see that you agree that disordered gambling is a public health issue, it is interesting that you seem to take a slightly different view in your recent publication for the Association of British Bookmakers, (Problem gambling in Great Britain: A brief review, July 2014), where you conclude:
“This brief review has demonstrated that problem gambling in Great Britain is a minority problem that effects (sic) less than 1% of the British population and that the prevalence rate is much lower than in most other countries. Problem gambling also appears to be less of a problem than many other potentially addictive behaviours. The latest British research tends to suggest that the prevalence rate of problem gambling is slightly declining. Data also appears to suggest that since 2010, that rate of problem gambling in England has dropped by around 40% but the rates of problem gambling in Scotland have held relatively stable. Rates of pathological gambling appear to be extremely low and in some surveys were not even reported as the base sizes were simply too small”
Real world figures are probably significantly higher as research has found that 60% of gambling addicts would either refuse to participate, or lie about the extent of their gambling in a prevalence survey. (Australian Government Productivity Commission, Gambling 2010 Inquiry Report)
The last British Gambling Prevalence Survey in 2010 estimated that there were over 450,000 adult gambling addicts in the UK – an increase of more than 200,000 since the previous survey in 2007, each with an average debt of £17,500. Another 900,000 people were at “moderate risk” of becoming disordered gamblers, while 2.7 million more displayed “some risk factors”. (British Gambling Prevalence Surveys, NatCen, 2007, 2010). Remarkably, Britain is one of the few countries to allow children to gamble. The result is > 60,000 young people are suffering from disordered gambling or gambling addiction. (British Survey of Children, the National Lottery and Gambling 2008-09: Report of a quantitative survey, IPSOS Mori, 2009)
It is estimated that for every disordered gambler at least 10 other family members, friends and colleagues are also directly affected (The Social Impact of Problem Gambling, Gordon Moody Association, 2014) – this means that an absolute minimum of 5 million people are directly affected.
The social cost of gambling to the UK economy was estimated in 2012 as £3.8 billion. (Gamcare Annual Review and Plan 2012-15, 2012).
A Losing Bet? Alcohol and Gambling: Investigating Parallels and Shared Solutions, a report by Alcohol Concern and the Royal College of Psychiatrists, recommended that the availability of gambling should not be allowed to increase and that special care should be taken with new technologies.
Professor Jim Orford has said that:
“no new form of gambling or significant development of an existing form should be allowed to become legal or to be made available without a proper social and health impact assessment. If that had been done in the case of fixed odds betting terminals (FOBTs or Category B2 gaming machines), the problems associated with them which are now causing so much concern might have been avoided”
— rethink gambling (@rethinkgambling) September 26, 2014
— Gambler's Help (@gamblershelp_au) September 24, 2014
— Priory Group (@PrioryGroup) September 26, 2014
“Gambling addict stole £20,000 from charity.” Addiction can cause you to do terrible crimes. Find the help you need. http://t.co/KG6oww7tUF
— KnowTheOdds (@KnowTheOdds) September 22, 2014