Banning early evening gaming ads on TV is like being ‘a little bit pregnant’

While gaming advertising will be banned before 8.30pm, the ban doesn’t extend to perimeter advertising or on-air mentions of betting odds. From www.shutterstock.com

Simon Chapman, University of Sydney

Early this month, Prime Minister Malcolm Turnbull made his family friendly announcement that advertising for gaming, including sports betting, would be banned from television and radio before 8.30pm each night, plainly a message about reducing exposure to children.

The “siren to siren” ban, which will cover all sports broadcasts on TV and radio except racing, will start five minutes before matches start and end five minutes after full time.

We don’t know when this will start, but you can probably get low odds somewhere on implementation taking as long as possible.

Just as you can’t be “a little bit pregnant”, you can’t have a partial ban.

Turnbull’s announcement said nothing about on-ground and perimeter advertising, TV commentators and their guests mentioning betting odds or the many sneaky ways direct advertising bans were subverted by the masters of the art, Big Tobacco.

No kid watches sport after 8.30pm, right?

Just take a nanosecond to think about what has been promised. Yes, the policy will take direct advertising of gambling out of pre-8.30pm sport. But last time I looked, the State of Origin, all day/night cricket, major world events like the World Cup and the Olympic Games, and Grand Prix events all run well after 8.30pm.

While most seven-year-olds may be tucked in bed before 8.30pm, many older kids stay up much later. So picture the living rooms across Australia as armies of parents say to their 12-year-olds, “Look I know it’s the decider State of Origin match and the game kicked-off only 15 minutes ago, but the TV is going off now because the betting ads are starting up in a minute.”

That’s just certain to work very, very well. Perhaps exactly as well as the gaming industry’s public support for the package would predict.

Former Labor front bencher Stephen Conroy, now with Responsible Wagering Australia told Sky News that Sports Bet “absolutely welcomed” the new package.

This should set cynicism meters off the dial. If this move had even the remotest chance of having any impact on the betting industry’s bottom lines, it would fight it tooth and claw, in the way we saw with tobacco plain packaging.

Gamble responsibly

The relentless TV betting ad postscripts that remind us to “always gamble responsibly” are as sincere as Big Tobacco urging smokers to smoke lightly.

The 2010 Productivity Commission report on gambling in Australia estimated that problem gamblers contributed about 40% of gaming revenue via poker machines. The report identified about 115,000 Australians as “problem gamblers” with a further 280,000 people at “moderate risk” of being a problem gambler.

There is no definitive national estimate of how common problem gambling is among people who bet on sports. But a 2014 study in the ACT indicated rates of problem gambling among internet gamblers were three times greater than for gamblers in general and on a par with rates for people gambling on poker machines or on racing.

The bottom line is that problem gamblers are the backbone of the gaming industry’s fortunes. The industry would be devastated if these fortunes somehow dried up.

Incremental tobacco advertising bans

The history of restricting tobacco advertising is likely to point to what’s ahead in reforms on how gambling promotion.

The last time a direct tobacco advertisement was seen or heard on Australian TV or radio was in August 1976. The Whitlam government introduced the policy, which was continued by the Fraser government. Direct cigarette advertising on radio and television was phased out over the three years between September 1, 1973 and September 1, 1976.

The decision was framed as a way of reducing the exposure of children to tobacco advertising. Obviously, the proposition was that kids were a prime target for tobacco companies and their advertising was a powerful way of conditioning interest in smoking in young people.

So, direct tobacco ads on TV and radio could help kids take up smoking. But the very same appeals in ads in print, on billboards, in shops and as sporting and cultural sponsorship apparently could not. This was the bizarre logic in governments at the time banning tobacco advertising in only selected media, but not across the board.

As ordinary commonsense and research highlighted the inanity of this policy, governments incrementally increased the number of media where cigarette ad bans applied. It took from September 1973 until April, 30 1996 (when tobacco sponsorship of cricket finally ended) for all forms of tobacco advertising and promotion to end in Australia. That’s 22 years and 8 months from start to finish.

If we count branded packaging as a form of advertising (as the tobacco industry unequivocally agrees it is) then we need to add another 16 years and 7 months. That’s until plain packaging was implemented in December 2012.

Children seeing sports betting ads can’t participate in online gaming because they don’t have credit or debit cards. But they are a vital audience for the future of the industry. It is in the industry’s interests to beguile them about gaming as early and for as long as possible until the day they can open their first betting account.

Simon Chapman, Emeritus Professor in Public Health, University of Sydney

This article was originally published on The Conversation. (Reblogged by permission). Read the original article.

Advantage gambling, but corruption risk surely isn’t worth it for tennis

Charles Livingstone, Monash University

The tennis world has been rocked this week by allegations that a number of players appear to have fixed matches at the behest of gambling syndicates over nearly a decade.

Tennis authorities scoff at the suggestion that such practices are widespread or that they have ignored information provided to them. They also reject the notion that entering into sponsorship deals with bookmakers – such as William Hill, sponsor of the Australian Open – makes corruption more likely.

Rather, the argument goes, co-operation with the bookies facilitates access to gambling data.

The investigation that uncovered the match-fixing allegations utilised analysis of this data to identify the suspected players. In the absence of hard evidence such as surveillance material, bank records or telecommunications metadata, statistical analysis is the way to identify patterns of behaviour and identify likely cheats.

The bookies already do this. And if they are as public spirited as they claim, surely allowing access to data for purposes of scrutiny by sporting or regulatory authorities is a public duty? It doesn’t require a cosy sponsorship deal.

Drawing parallels

Unlike many businesses, wagering relies on the operations of unconnected entities to generate the markets that are its stock in trade. In this, it resembles the relentless “investment” in derivatives of the US housing market, which fuelled the global financial crisis.

In the end, the size of this market dwarfed the real activity it was focused on. When it collapsed, it brought that real world down with it. The danger for global sport is that the sports betting bubble will have the same effect.

Sports betting has enjoyed enormous growth in recent years. In Australia, its 16% annual growth has far outstripped other gambling modes.

The market in sports betting is also heavily driven by technology and relentless expansion into more sports. Anyone watching the Australian Open this year on Australian free-to-air TV will notice the proliferation of sports betting ads. So will spectators in the major arenas.

So, the current controversy over match-fixing has some ironic elements. World number two Andy Murray suggested there was a touch of hypocrisy about telling the players to have no connection with gambling interests (including accepting sponsorship from bookies) while blithely maintaining that gambling sponsorship generated no conflicts for the sport overall.

Gambling is big business; its money buys a lot of influence. One area where this plays out is the symbiotic relationship between governments and gambling businesses. The revenue governments derive from gambling makes them largely oblivious to the corrupting influence of gambling dollars on politics and policies.

Saving sport from itself

Sporting organisations are no different to political institutions. Gambling has spread its sponsorship wings and provided a new stream of revenue to popular sporting codes.

Beyond the codes themselves, broadcasters and other commercial media also find the stream of revenue from gambling ads lucrative. That in turn pumps up what they can offer for broadcast rights for popular leagues. And the cycle continues.

It’s hardly surprising that individual players – particularly those at the start of their careers who are often struggling to meet the costs of staying on the tour – would somehow fall victim to the temptations of all that money. Sadly, once corrupt gamblers or their agents have their hooks into you, they never let go.

And, in this debate, the factor that is usually forgotten is the cost to ordinary people. With rampant promotion of gambling on a seemingly never-ending exponential trajectory, more people are likely to gamble. Many will be young people who have never known sports free of the influence of gambling. And, it seems, they now view all sporting contests through the lens of the odds and the “value” available from different bookies.

For many of these people, gambling harms will ruin (or in too many cases end) their lives and greatly damage those of their family, friends and in some cases employers and others.

More broadly, the inestimable value of the untrammelled enjoyment of sport is lost. If you love a specific sport and see it degraded by scandal after scandal, some part of the enjoyment is gone forever. Tennis provides an excellent example of a sport of global significance being tainted by the commercial interests of a relatively small but increasingly lucrative and powerful business.

It is not feasible to clean up sport tournament by tournament, or country by country. An anti-corruption agency with the ability to look at these matters with an unjaundiced eye is probably necessary, and sooner rather than later.

It wouldn’t hurt to see the ever-closer associations between sports and gambling businesses wound back dramatically. Tobacco provided more than one-quarter of Australian sports sponsorship in the 1980s. At one point it sustained some sports’ financial viability. But when it ended, no sport went to the wall.

Gambling is a corrupter of institutions, as well as a dangerous product for many of those who consume it as intended. It must be seen as such. It needs to be properly and carefully regulated, and it needs to be treated with the considerable care that any dangerous product deserves.

If the price of clean sport and corruption-free political and social processes is a modest reduction in global gambling revenues or growth, I suspect most sports fans would be happy with the deal. Surely, right now, tennis lovers would be.

Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash University

This article was originally published on The Conversation. (Reblogged by permission). Read the original article.
 

Gambling on pokies is like tobacco – no amount of it is safe

Francis Markham, Australian National University; Bruce Doran, Australian National University, and Martin Young

Is occasional gambling safe? Our study found that gambling is like smoking: the more you gamble, the greater your risk of developing problems. There is no safe level of gambling, only risks that increase as you lose more money – even at relatively low levels of losses.

We examined large, nationally representative surveys in Australia, Canada, Finland and Norway, and found that no amount of gambling was safe.

In the graph below, we show the average relationship between money lost and problem gambling index scores in the four surveys. Gambling losses are shown on the x-axes, with problem gambling risk on the y-axes.

Crucially, there is no safe region on these curves where problems do not increase as you lose more money. This is different to alcohol, where moderate consumption may reduce your risk of mortality.

The relationships between gambling losses and problem gambling risk in four countries.
http://doi.org/10.1111/add.13178

We have known for some time that some forms of gambling are more risky than others. Therefore, we also examined the relationships between losses and risk for different gambling activities.

Electronic gaming machines – known as pokies in Australia, video lottery terminals in Canada and slot machines in the US – were the most strongly associated with problem gambling in every country in our study.

In Australia, there was also a clear relationship between money lost betting on races and problem gambling. Lotteries were also associated with problem gambling in Canada and Finland and sports betting was associated with problem gambling in Norway. There was no evidence of low-risk thresholds for any gambling activity.

Contradicting conventional wisdom

These findings are important because they contradict the conventional wisdom that there is a threshold below which gambling is safe. According to this view, gambling is much like alcohol, in that only after a particular consumption level has been reached does risk mount. It is only after heavy consumption (or losses) that problems supposedly occur.

As a case in point, the axiom that “safe levels of gambling participation are possible” is one of the six fundamental assumptions of the influential Reno Model, which describes itself as “a science-based framework for responsible gambling”.

This claim that safe levels of gambling are possible turns out to rest on two erroneous arguments. The first is an empirical case that supposedly documents low-risk thresholds for gambling.

The most prominent study of this kind found evidence for a “J-shaped” relationship between problem gambling risk and gambling expenditure. A J-shaped curve describes the situation where risk starts off very low and increases significantly only at higher levels of gambling losses (see panel A in the the graph below).

Unfortunately, this conclusion was based on an incorrectly scaled graph. In panel A, the range of money represented by each data point widens from $50 to $500, but the dots are still placed with equal distances apart. When the x-axis is correctly rescaled, a linear rather than J-shaped relationship emerges (see panel B).

The evidence base for ‘safe levels of gambling’ appears to rely on a flawed interpretation of data.
http://doi.org10.1111/j.1360-0443.2006.01392.x

The second argument sometimes made to support the idea of safe gambling is based on the anecdotal observation that some people do gamble large amounts without becoming problem gamblers. By extension, the argument goes, problem gamblers need to become like these responsible gamblers who can gamble without adverse impacts.

However, the existence of such individuals does not imply that gambling at that intensity is safe at the population level. For example, while some regular smokers may live to 100, this does not mean that smoking is safe or that we should promote “responsible smoking”. Such an argument fundamentally misunderstands the concept of risk.

What now?

Our findings have two important implications for regulation.

First, public information about gambling should not imply that moderate gambling is risk-free. Guidelines and other forms of public awareness campaigning should make it clear that, for poker machine gambling in particular, every increase in consumption increases the level of risk.

As a recent article in the Journal of the American Medical Association put it:

Traditional messaging oriented around “reduce, restrict, limit, ban” may make sense for determinants that have a linear relationship with health outcomes, as with tobacco and mortality.

Our research suggests that this kind of public health messaging should also apply to poker machine gambling.

The second implication relates to the “responsible gambling” model of regulation. This model rests on the notion that gambling in moderation is safe. In contrast, our research suggests that gambling at any level can be associated with harm. And the more money lost, the greater the risk of harm.

There is no threshold below which consumption does not increase the risk of harm. Harm-minimisation policies should seek to reduce the poker machine gambling of everyone, not just problem gamblers.

Francis Markham, PhD Candidate, The Fenner School of Environment and Society, Australian National University; Bruce Doran, Senior Lecturer (Geographic Information Systems), Fenner School of Environment and Society, Australian National University, and Martin Young, Associate Professor, Centre for Gambling Education and Research

This article was originally published on The Conversation. (Reblogged by permission). Read the original article.

15 things you should know about Australia’s love affair with pokies

Francis Markham, Australian National University and Martin Young

• Poker machines were legalised in New South Wales in 1956; the ACT in 1976; Victoria and Queensland in 1991; South Australia in 1992; Tasmania in 1997; and the Northern Territory in 1998. They are banned in Western Australia, except in the casino.
• There are 196,900 poker machines in Australia; 95,012 are in NSW, with a further 46,663 in Queensland and 28,860 in Victoria. In comparison, there are just 16,440 pokies in New Zealand and 97,161 in Canada.
• Australia has the most poker machines per person of any country in the world (excluding gambling destinations dominated by the casino industry like Macau and Monaco), with one machine for every 114 people.
• In 2013–14, Australians lost A$11 billion on poker machines in clubs and hotels. A further A$1.5 billion is estimated to have been lost on poker machines in casinos. That’s a total of around A$700 per adult per year.
• Australians lose more on gambling than any other nation, mostly because of poker machines. In 2014, Australians lost more than US$1100 per capita, compared with less than US$600 in New Zealand and the US, and less than US$500 in Canada and Britain.
• In 2013–14, state and territory governments raised A$3.2 billion in taxes on poker machines in clubs and hotels – that’s 5% of state-levied tax revenue.
• Between 20% and 30% of Australian adults play poker machines at least once a year (except in Western Australia). The 4% who play weekly are conservatively estimated to lose an average of A$7000 to A$8000 per year.
• It’s easy to lose A$1500 per hour playing poker machines at their maximum bet size and maximum speed. Because poker machine returns are unpredictable over the short term, gamblers playing in this way could lose a greater or lesser amount.

It’s easy to lose around $1500 an hour on poker machines.
AAP/Dan Peled

• The average poker machine in clubs and hotels makes A$56,000 per year. Some machines are much more profitable, with pokies in several venues in Victoria making more than A$200,000 each.
• Poker machines have minted a select few super rich, such as James Packer (net worth A$6,080 million), Len Ainsworth (net worth A$1,840 million), Bruce Mathieson (net worth A$1,160 million), Arthur Laundy (net worth A$310 million) and the Farrell family (net worth A$275 million).
• Poker machines are concentrated in Australia’s poorest suburbs. In Western Sydney’s relatively impoverished Fairfield, each adult lost an average of A$2340 on the pokies in 2010-11; in wealthy Ku-ring-gai and Willoughby, poker machine losses were just A$270 per adult.
• In 2010, the Productivity Commission estimated that there were around 115,000 “problem gamblers” in Australia, who account for 40% of losses on poker machines. People who live closer to poker machine venues are more likely to experience gambling problems.
• Around 30% of people who play poker machines weekly are problem gamblers or are “at risk” of becoming problem gamblers. In WA, where poker machines are only allowed inside the casino, the rate of problem gambling is one-third of that in the rest of the country.
• Aside from banning poker machines outside casinos, the most promising harm-minimisation measures include reducing maximum bet limits and requiring gamblers to set a limit before they begin playing (pre-commitment).
• Poker machine reform is popular in Australia: 70% of people agree that gambling should be more tightly controlled and 74% agree that people should be limited to spending an amount they nominate before they start gambling.

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This article is part of our special package on poker machines. See the other articles here:

Bright lights, big losses: how poker machines create addicts and rob them blind

How real are claims of poker machine community benefits?

Francis Markham, PhD Candidate, The Fenner School of Environment and Society, Australian National University and Martin Young, Associate Professor, Centre for Gambling Education and Research

This article was originally published on The Conversation. (Reblogged by permission). Read the original article.
 

Bright lights, big losses: how poker machines create addicts and rob them blind

Charles Livingstone, Monash University

Australians lose A$20 billion on gambling every year, $11 billion of which goes on poker machines in pubs and clubs. Why, then, are pokies so attractive? And why do we spend so much on them?

Ubiquity is one reason. The high intensity – the rapid speed of operation and relatively high stakes of betting up to $10 per “spin” – is another.

But there’s also a more insidious mechanism at work here: the basic characteristics of poker machines, combined with constantly refined game features, stimulate the brain in a way that, in many cases, leads to addiction with symptoms similar to those associated with cocaine use.

Poker machines cultivate addiction by teaching the brain to associate the sounds and flashing lights that are displayed when a punter “wins” with pleasure. And since the pattern of wins, or rewards, is random, the “reinforcement” of the link between the stimuli and pleasure is much stronger than if it could be predicted.

Into the machine

Poker machines, invented in the late 19th century, were originally mechanical, usually with three reels and a fixed and limited number of symbols available for display on the win line. Contemporary pokies are fully computerised. Usually housed in a retro-designed box, they refer to the old-fashioned simplicity of their predecessors. But they are as chalk and cheese compared to their mechanical forebears.

Today, the gambling machine industry employs an army of engineers, programmers, composers and graphic designers to produce increasingly sophisticated games and machines, with more ways of persuading people to part with their cash.

At the heart of the modern pokie is a series of random number generators. These are constantly operating and, when the button is pushed, the answer is instantly known. Each number corresponds to a “reel” symbol – pokies still appear to have reels that roll around when the button is pushed, but this is an illusion.

In Australia, unlike some other jurisdictions, the order of symbols on each of the visual reels must be constant, but the number of symbols can be different on each reel. This includes winning symbols.

Old, mechanical pokies had a limited number of “stops” because of the limitations of physical space. Electronic pokies have no such limitations. And the difference is profound. A mechanical pokie with three reels, 20 symbols on each reel, including one prize symbol, would have winning odds of 1/20×1/20×1/20, or one in 8,000.

A contemporary pokie will often have major prize odds of one in 10 million or more. The number of symbols on each reel is not limited by physical space, so the odds of a major win can be tweaked by limiting the number of winning symbols on certain reels.

A five-reel game may have two winning symbols on each of the first three reels, each of 60 symbols in total. The last two reels may have only one winning symbol, with 80 total symbols. This configuration would produce odds of 2/60×2/60×2/60×1/80×1/80, equal to one in 230,400,000.

This maths is at the heart of machine design. A slot game is just a spreadsheet. But it’s a spreadsheet with a lot of enhancements.

Tricking the brain

These configurations will regularly produce “near misses”. These occur when winning symbols appear on some lines, but not all. Experimental work has revealed that the brain stimulus produced by such “near misses” can be almost as significant as those produced by a win. The level of reinforcement is thus dramatically increased, without any need for the machine’s operator to actually pay out.

Current pokies also allow multiline bets, whereby users can select all available lines to bet on in a single spin. Mechanical machines were limited to a single line of three reels. Pokies now allow users to bet on 50 or more lines, configured from the video display of five reels and three lines.

The line across the middle is one such line, as are those above and below that line. But patterns of symbols are available in bewildering arrangements, combining lines and reels and multiplying the minimum bet by many times. A one-cent credit value game can thus be configured to allow at least a 50-cent minimum bet per spin if 50 lines are selected.

Most regular users report that their preferred style of use is “mini-max” – that is, the minimum bet with maximum lines. In a strange way, this reveals risk-averse behaviour. There’s nothing worse than seeing a win come up on a line you’re not playing, as a regular pokie user once explained to me.

How multiline poker machines work

But regular users will also increase their stakes when they can. This is to provide for the possibility of bigger payouts, or in some cases because they believe – incorrectly – that doing so will increase the chances of a win.

Pokies also allow the credits bet per line to be multiplied, often by up to 20 times. Thus, a one-cent machine becomes a device capable of allowing bets of $10 per spin. Each spin can take as little as three seconds.

For this reason, the Productivity Commission calculated that such machines could easily average takings of up to $1,200 per hour. But this is an average, and it’s not uncommon to observe people spending $400 or more on poker machines in as little as ten minutes.

Machines that accept banknotes allow significant amounts to be “loaded up”. In New South Wales, pub and club pokies can accept $7,500 at any one time.

The other capability provided by multiline poker machines is a phenomenon known as “losses disguised as wins”. This allows users to experience a reward from the game even when they’ve actually lost money.

If you bet on each of 50 lines at one cent per line and win a minor prize on one line (say, 20 credits), for instance, the machine will provide suitable reinforcement – sounds, lights and sometimes a congratulatory message – and acknowledge the credits won. But you’ve actually lost 30 cents.

This allows the amount of reinforcement delivered to the user to be magnified significantly – often doubled. Thus, the user feels like they’re winning quite regularly. In fact, they’re losing.

So what does all this stimulation do? Brain chemicals, particularly dopamine, are central to this process. Brain imaging has shown in recent years that the pattern of dopamine release that occurs during a gambling session is strikingly similar to that of cocaine and other addictions.

Poker machines are essentially addiction machines that have been developed over a long period of time to be as attractive to their users as drugs are to theirs.

This article is part of our special package on poker machines. See the other articles here:

15 things you should know about Australia’s love affair with pokies

How real are claims of poker machine community benefits?

Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash University

This article was originally published on The Conversation. (Reblogged by permission). Read the original article.

 

Online gambling review should not ignore the problems in our own backyard

Charles Livingstone, Monash University

As those who watch sport will attest, online gambling is seemingly ubiquitous. Certainly advertising for it is.

In Australia, the regulation of gambling services is a matter for state governments. However, the federal government has responsibility for telecommunications, which includes the internet. So, there is some division of responsibility for online gambling. This has arguably left the area less well regulated than it might be.

This is one ostensible reason the federal government has announced a review of the online gambling industry.

Background

The current federal legislation is the Interactive Gambling Act. It allows Australian operators to offer online betting. It also seeks to prohibit the provision of casino-style gambling – roulette, slot machines – to Australian residents, but doesn’t prohibit Australians from using such services.

This means that Australian-registered services are not allowed to offer some gambling services, but are permitted to take online bets.

The most recent review of the act reported in 2012. It concluded that it would be useful to consider a trial of some online gambling – suggesting online poker, which is thought to be a less harmful form of gambling than slots or other casino-style gambling.

The review also recommended a host of harm-minimisation measures be introduced into the online gambling arena. These included a pre-commitment system, an effective self-exclusion system and much-improved practices among bookies. The review recommended that better enforcement of offshore providers be implemented, although effective regulation of extra-jurisdictional gambling providers is likely to be futile.

Nonetheless, the review suggested that banking institutions should be rewarded for blocking transactions between Australians and nominated unlawful gambling providers. This may have some effect, although mainstream banking institutions provide only some of the plethora of ways of moving money around the world.

A recent Financial Counselling Australia report highlighted a number of what can only be regarded as very dubious practices among prominent bookmakers operating under Australian regulation. These include extending unsolicited lines of credit, failure to pay winnings on request and repeated inducements to gamble.

These practices are not caught by current consumer protections under credit law or gambling regulation. Bookies also appear to regularly share data on their customers, which is likely to breach privacy legislation.

What this review will focus on

Media reports early this month – when Social Services Minister Scott Morrison confirmed that a review would be held – appeared to focus on a range of the issues highlighted by the 2013 review, including consumer protection.

However, the terms of reference headlined this new review as being into the:

Impact of Illegal Offshore Wagering.

In fairness, one of the terms of reference of the review is concerned with increasing consumer protection.

It will be a quick review. The final report must be with Morrison by late December. Submissions will be sought from industry and the public.

Those concerned with the growing harms of online gambling – and particularly sports betting – will be disappointed with the terms of this review. There are a number of pressing concerns that, from a consumer protection perspective, might have ranked higher in both the terms of reference and Morrison’s messaging.

Online bookies are competing for market share in Australia, where the operators now include global giants such as the British bookies Ladbrokes and William Hill. Their practices have attracted considerable criticism as the scramble for revenue escalates.

Troubling practices include the continuing provision of credit, the pushing of boundaries on such issues as the prohibition of online in-play betting, and blanket advertising of their wares – including to children during sporting events – and the aggressive branding of sporting teams with gambling providers.

What is Australia’s real gambling problem?

Sports betting in Australia is likely to generate revenue – that is, player losses – of around A$750 million in 2015-16. It is the fastest-growing gambling sector and is likely to produce a new wave of gambling problems among the young men to whom these products are marketed.

Although modest in comparison to poker machines – which generated around $11 billion in losses in 2014-15 – it needs to be effectively regulated if Australia is to avoid adding to the already significant burden of gambling harm. The good news is that preventing this harm is actually quite straightforward.

Unfortunately, substantial and powerful segments of the Australian body politic are now closely affected by the fortunes of the bookies. These include Packer interests via CrownBet, the AFL’s official wagering partner. State and territory treasuries are also abundantly interested in maintaining the flow of money.

It is worth asking if the offshore online gambling sector is Australia’s most pressing gambling problem. Undoubtedly, some Australians get into a lot of trouble gambling online. Most of them will fall prey to bookies already licensed in Australia and offering services lawfully. Some will end up in trouble because of offshore sites offering unobtainable services such as online slots or roulette.

Overall, the market going to such offshore providers is estimated at around $1 billion, although there is no way of verifying this under current circumstances.

But, at least 75% of those with a gambling problem have it because of poker machines in clubs or pubs. We see little concern from the government about this group.

And, even in the online gambling environment, there appears to be little concern about first cleaning up our own backyard. The 2013 review made some very sensible recommendations about harm minimisation, including restricting or prohibiting credit betting. This is clearly a source of considerable harm to many. And prohibiting credit betting is in fact current federal government policy.

The Financial Counselling Australia report provided ample evidence of the excesses of the Australian online gambling industry. A recent whistleblower article from within the industry confirmed these concerns. These need to be a major focus of any review of the Interactive Gambling Act and other relevant federal legislation, including the regulation of advertising and banking services.

But if the renewed urgency behind this review is to highlight the “dangers” of offshore online gambling providers, then the bookies will be arguing as hard as they can that the solution is to allow them to offer the same services from Australia. After all, the internet is notoriously difficult to regulate and service providers licensed in Australia would be expected to observe Australian regulation.

It is important to ensure gambling is properly regulated. But it is probably better to address the main game first, or at least simultaneously. That involves making sure that current providers are adhering to the best possible harm-minimisation practice.

The 2013 review set up a clear set of goals for that. We don’t need another review to know what needs to be done, or to do it.

Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash University

This article was originally published on The Conversation. (Reblogged by permission). Read the original article.
 

The Gambler’s Fallacy

by Tim Harding

The nature of the fallacy

The Gambler’s Fallacy, also known as the Monte Carlo Fallacy or the Fallacy of the Maturity of Chances, is the mistaken belief that if something happens more frequently than normal during some period, then it will happen less frequently in the future (presumably as a means of balancing nature).  This belief is also sometimes referred to as the so-called ‘Law of Averages’.

Although appealing to the human mind, this belief is false.  The fallacy can arise in many practical situations although it is most strongly associated with gambling where such errors of reasoning are common amongst players, and even more common amongst ‘problem gamblers’ (see below).

The use of the term Monte Carlo Fallacy originates from the most notorious example of this phenomenon, which occurred in a Monte Carlo Casino in on August 18, 1913.[1]  On this occasion, black came up a record twenty-six times in succession on a roulette wheel.  There was a frenzied rush to bet on red, beginning about the time black had come up a phenomenal fifteen times.  In an application of the Gambler’s Fallacy, players doubled and tripled their stakes, the fallacy leading them to believe after black came up the twentieth time that there was not a chance in a million of another repeat.  In the end, the unusual run enriched the Casino by some millions of francs.[2]

The reality is that if the roulette wheel at the Casino was fair, then the probability of the ball landing on black was a little less than one-half on any given turn of the wheel.  Also, the colours that come up are statistically independent of one another, thus no matter how many times the ball has fallen on black, the probability is still the same at every turn of the wheel.  (Remember that neither a roulette wheel nor the ball has a memory).

Almost every so-called gambling ‘system’ is based on this fallacy, or a similar error of reasoning. Any gambler who thinks that he can record the results of a roulette wheel, or lotto numbers or a gaming machine, and use this information to predict future outcomes is probably committing some form of the gambler’s fallacy. An exception is counting the cards in successive deals from an unshuffled card deck. Many casinos now counteract card counting by reshuffling the cards before each deal. Part of the reason for the prevalence of this fallacy could be derived from this former system of card counting.

Problem gambling

Many psychologists treating problem gamblers have identified false perceptions and beliefs as major contributors to problem gambling.  Erroneous beliefs also lead to uninformed decision-making by a significant number of other players.[3]  A survey of gambling attitudes among 1017 Australian young people in 1998 found that such erroneous beliefs include:

•  the chances of winning are significantly higher than they actually are;
•  a player’s skill or adopting ‘the right system’ can influence the outcome of a game that is purely a game of chance;
•  a player will eventually ‘strike it lucky’;
•  a player is more likely to win with ‘lucky numbers’, by ‘thinking positively’ or by ‘concentrating hard enough’.[4]

According to the Productivity Commission Inquiry Report, one of the most widespread misconceptions is that gaming machine payouts are dependent upon previous outcomes from the same machine (as evidenced by the frequent ‘chasing of losses’).  To counter this common misconception, the Commission quotes the following facts about gaming machines:

•  The payout tables on gaming machines indicate the winnings that are associated with certain combinations.  They do not tell the player the probability of the combination occurring.
•  In most jurisdictions, operators must return at least 85 per cent of turnover to players as winnings. It will usually take hundreds of thousands of games for a machine to come close to this average ‘set’ return.
•  Each game played on a machine is independent of results from past games —machines which have not paid out for some time have no higher chance of paying out now or in the near future (and vice versa).
•  Actual outcomes on machines are extremely volatile, with player returns and the amount of time that it takes to lose a set amount of money varying between sessions.
•  If a gambler ‘reinvests’ the winnings, he or she will eventually lose the lot.[5]

In this way, problem gambling is a severe manifestation of preference failure, with potentially dire consequences.  Harm to problem gamblers and their families can range from excessive time-wasting and financial losses, to loss of employment and family breakdown, to bankruptcy or criminal behaviour, clinical depression and even suicide.[6]

References:

[1] Lehrer, Jonah (2009).How We Decide. New York: Houghton Mifflin Harcourt. p.66.

[2] Darrell Huff & Irving Geis (1959) How to Take a Chance, pp. 28-29.

[3] Productivity Commission (1999) Australia’s Gambling Industries Report No. 10, AusInfo, Canberra, p.41.

[4] Moore, S.M. and Ohtsuka, K. (1999) ‘Beliefs About Control Over Gambling Among Young People, and Their Relation to Problem Gambling’. Psychology of Addictive Behaviors, December 1999, Volume 113, Number 4 APA Journals, Washington. D.C.

[5] Productivity Commission (1999) Australia’s Gambling Industries Report No. 10, AusInfo, Canberra, p.42.

[6] Tim Harding & Associates (2005)  Gambling Regulation Regulations 2005 – Regulatory Impact Statement. Department of Justice, Melbourne.

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