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About the report
In ‘ONLINE GAMBLING: Addicted to Addiction’, ResPublica, with the support of the Campaign for Fairer Gambling, builds on the recommendations in the previous ResPublica reports, developing a growing package of reforms to make the gambling industry more sustainable and responsible.
This report shows that there is an urgent need for action. The online gambling industry is an industry that makes more than half of its profits from those at risk and problem gamblers and is itself addicted to addiction – needing to generate more addiction to generate more profits.
This report highlights the need to prevent operant conditioning techniques from being used. There is a clear need to protect those at risk, and particularly the young, from being enticed down a road that limits their ability to make rational judgements. This requires independent choices to be made. If action is not taken to properly ensure compliance on online gambling platforms, greater numbers of those at risk may rapidly become a bigger problem. At the very least, as has been done for online child protection in other contexts, clear and unambiguous warnings are needed for certain types of online gambling.
Key drivers for the report:
The Competition and Markets Authority (CMA) opened an investigation into the online gambling industry in 2016 and continues with enforcement action. Its findings to date are shocking:
• It has found breaches of consumer protection law
• It has found restrictions that require people to play multiple times before allowing them to withdraw their own money
• It has found restrictions on the right to withdraw winnings made from gameplay with their deposit
• It has found daily weekly or monthly withdrawal limits that keep players online and appear unreasonably low
• It has found dormancy terms that allow firms to confiscate funds or impose excessive charges after a certain period of inactivity
• It has found that firms denied pay-outs
In this report, we submit in addition that the online gambling industry obtains more than half of its profit from at risk and problem gamblers. Thus, the industry is addicted to addiction – too high a proportion of its profits come from the vulnerable and it has an interest in people spending time online and keeping people online to develop a habit – drawing them into gambling and creating long-term dependency.
1. As a minimum, those responsible must be brought to account and must change their ways, given the evidence to date of a culture of cynical exploitation, their gambling licences should be at risk unless they immediately return illegally obtained money and commit to ongoing compliance.
2. The CMA should use the full extent of the powers it has and, if necessary, be granted further powers to act as a Public Prosecutor, enabling it to strip those that have broken the law of their unlawful gains, and obtaining redress for consumers that have been harmed.
3. The undertakings are monitored and enforced against strict publicly available targets to prevent gambling addiction
4. Those firms responsible for causing harm must not be able to continue to profit from their wrongdoing
5. Deposit money and winnings generated under unfair contracts and now trapped in player accounts should be returned to the players
6. Work needs to be done on vulnerable consumers and their exposure to different games, some of which may be more addictive than others. We need bespoke action to ensure that more addictive games are not developed without due regard to the vulnerability of the user. In essence, a scale of addictiveness for games needs to be developed. Similar government action should be taken in the online world as has been taken in the bricks and mortar world. For example, fixed odds betting has recently been more carefully controlled, while the online world remains a “Wild West”, an enormous unregulated Cybercasino. Similar rules should apply both online and offline. Happily, the government in February 2018 announced a review of current legislation, with the aim to ensure that what is illegal offline is illegal online
7. It should be accepted that the online environment is more dangerous for those at risk as there is greater scope for Online Gambling using sophisticated techniques to create ongoing dependency for the vulnerable. Similar action to that recently taken to ensure child protection and prevent or restrict online access to unsuitable content can and should be used here.
Tim Cowen is an equity partner at Preiskel & Co and is independently recognised as one of the leading telecoms and technology regulatory/competition lawyers in the EU. Tim led BT’s competition law and public policy team for many years and...
Phillip is an internationally recognised political thinker and social and economic commentator. He bridges the gap between politics and practice, offering strategic consultation and policy formation to governments, businesses and organisations across the world. He founded ResPublica in 2009 and...
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