Online Casino Depends On Risky Gamblers, UK Study Suggests

July 6, 2022
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​​​​​​​A new British study suggests that the online casino industry draws a significant percentage of players and revenue from those with at least a moderate risk of developing a problem-gambling habit.

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A new British study suggests that the online casino industry draws a significant percentage of players and revenue from those with at least a moderate risk of developing a problem-gambling habit.

By contrast, lottery games have the lowest percentage of moderate risk and problem gamblers, along with the lowest percentage of revenue generated by those players, the study said.

But gamblers at least moderately at risk constitute an outsized level of spending for the industry as a whole, according to the study, released this week in the journal International Gambling Studies.

For gambling in general, 14 percent of players reporting at least moderate risks generated 43.5 percent of gross gambling spending, according to the study.

“When you look at this as a whole, across spending on all activities, there is a substantial skew with those experiencing moderate risk and problem gambling contributing far greater levels of gross spend than their population distribution,” said Heather Wardle, a University of Glasgow researcher and one of five academics conducting the study.

“This should be really troubling for the industry as a whole,” she said.

The survey found that respondents scoring at least a moderate risk of problem gambling constituted nearly 35 percent of online casino players, with lottery the lowest at 12.5 percent.

Online sports betting scored nearly 15 percent of players at least a moderate risk of problem gambling.

The study, which used self-reported data, suggested that about 90 percent of gross spending on online casino came from the third of players who had at least a moderate gambling harm risk.

The results broadly correlate with a 2020 survey which found that 82 percent of gross gambling yield in online casino came from 5 percent of players.

The study comes as the UK gambling industry braces for the release of a white paper that will reportedly include changes such as slots stake and affordability limits and cost the industry £700m in annual lost revenue.

“Understanding how the gambling industry generates revenue is of paramount importance,” the researchers said.

“Questions about whether higher volumes of expenditure are concentrated among a small proportion of gamblers, and how this varies by problematic gambling status, underpin policy debate about consumer protection.”

Under pressure, the industry has been seeking to reduce the percentage of revenue which comes from problem gamblers and high-rollers.

The idea of regulating different forms of gambling based on risk profile has arisen in both the UK and the Netherlands, where there are proposals to ban print, radio and TV ads for “higher-risk” games, which covers most verticals other than lottery.

Wardle cited this trend, adding: “Based on this evidence we might extend this to include differential regulation based on the reliance of different sectors on those harmed for revenues.”

Gambling Commission licensees are required to report estimates of what percent of their revenue comes from problem gamblers, but that is not considered public information, according to the study.

The newly released survey used 2020 and 2021 samples drawn from YouGov’s 1m opinion panellists, questioning those who had bet on sports at least monthly in the 12 months prior to the pandemic. The research was funded by the Economic and Social Research Council.

Some results for sports betting could have been skewed by the fact that most sporting events were cancelled during the earliest reporting period due to COVID-19 lockdowns, but that should not have affected online casino or lottery habits, the researchers said.

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