Green Paper On Online Gambling In The Internal Market

Global online gambling market is projected to grow at a CAGR of 8.77%, during the forecast period (2019 - 2024). The online betting is the fastest growing segment during the forecast period. Artificial intelligence, Chabot, and machine learning have taken over the market. Social impacts of gambling, and are scientifically rigorous. These principles are outlined in the first section of this paper. In light of these methodological principles, the second section of this paper provides an exhaustive review of what is known about the social and economic impacts of gambling.

1. Green Paper On Online Gambling In The Internal Marketers
2. Green Paper On Online Gambling In The Internal Markets
3. Green Paper On Online Gambling In The Internal Marketing
4. Green Paper On Online Gambling In The Internal Market Research

Introduction

Gambling is legal in the United Kingdom (UK). It is regulated and the costs of this are not insignificant for the industry.

The UK tax income from the industry is estimated to be £2.6 billion. It is much more difficult to obtain a figure for the costs of the industry to the economy, society and families. A recent estimate for the costs of problem gambling, including the costs to public services was a minimum of £1.2 billion. This did not include direct family costs. Of course this latter figure can never accurately reflect the social and psychological trauma that individuals and families may incur. What we do know is that people and thus families lost £12.6 billion gambling in 2015.

The Gambling Commission, the major regulator, has admitted it is struggling to keep up with the changing gambling market, especially how the online gambling market should be regulated.

During 2016 and early 2017 there has been unprecedented media coverage about the industry. Nearly all of it has been negative, except in specialist media where there are obvious conflicts of interest. It is, therefore a good time to analyse what may be causing the industry to act as it does.

This review considers how ‘fair and open’ the present gambling market is and makes suggestions for the future.

Recent history

The Gambling Act 2005, mainly implemented in 2007, deregulated and thus radically changed the UK gambling market. As part of this Act (‘deal’), which did have many aims, there was one of helping UK based gambling companies to lead the world in legalised gambling. The gambling industry made a number of promises as part of the ‘deal’, of which, most have now been broken, e.g. not to move offshore. This type of behaviour should have raised ‘red-flags’ about the attitude of gambling companies towards fairness much quicker than it did. Eventually two major responses did occur; the point of consumption tax (remote gaming duty) and irrespective of where a gambling company is based, if they trade with UK based citizens, they have to be regulated by the UK Gambling Commission.

For the convenience of this review the types of gambling will be split into just two parts; sports betting, where in theory, there is a chance for a customer to win regularly based on skill and secondly, everything else, where despite the rapid development of e-sports most of the gambling turnover has come from fixed odds betting terminals, online casinos and bingo, i.e. games of pure chance, where the gambling company has a house ‘edge’ that guarantees a profit. The expansion of the second category and online gambling are arguably the two biggest changes in the gambling market over the last 10-15 years.

How online is affecting the present gambling market

Every business plan over the last decade for every major gambling company will have contained enthusiastic noises about expanding, “Our online turnover and market share.”

Every major bank will have been approached for funding to start a new gambling business based on online income projections. It’s possible to set up an online gambling company at less cost than buying a main ‘pitch’ in the betting ring at Cheltenham racecourse, for which the former provides you with access to the world as opposed to a few days racing every year: What’s not to like? What’s not to like is the internet, as it is a fiercely competitive place to do business unless you have a unique business ‘edge’.

Gambling companies who trade online have only one serious ‘edge’ and that is value. Gambling is a harsh business for all concerned; customer and service provider alike and online this is even more so.

A gambling company takes the products of another company or organisation and let’s people gamble on those products. These gambling companies create nothing; their business model ‘piggy backs’ on what others do, so the costs for gambling companies have increased rapidly if they offer live sports betting opportunities, as opposed to cartoon sport or gaming products. This has happened, because sporting bodies are now much better at obtaining a fair licensing price for their product; quite right too.

Furthermore gambling companies have to think about access to information that the internet creates. Let’s forget about the customer at this point despite all the information benefits the internet provides to them and think about the companies. Company A, can easily see what odds companies B, C, and D are offering on a football match between Manchester United (MU) and Liverpool. Unsurprisingly, companies reduce their odds to compete with other odds they can see online until the market arrives at something like MU 7-4, Liverpool 2-1 and the draw 85-40 (a 101% book). Then along comes company E who offer a no risk in-play bet up to a maximum of £50.00 if you place a pre-match bet.

Horse racing is no better. It’s common to see races with over-rounds of 101-103% at 10.00am every day. You then add in best odds guaranteed as a promotion and money back if your horse falls or comes second to the SP favourite and the value for the customer is fantastic and a nightmare for the companies. Quite simply, the online market is broken and has no value for the companies.

At this point a paragraph should be dedicated to the betting exchanges. It can be kept short, as there is nothing more to say, except that they are a nightmare for traditional bookmakers; end off. This opinion is probably proven correct by traditional bookmakers paying tens of millions for the two biggest betting exchanges; namely Betfair and Betdaq.

Initially the internet looked fantastic for the companies; 24/7 potential to trade with losing customers at little cost; a wide range of gambling products most with a guaranteed profit; rapid-fire gambling with no thought, often leading to customers chasing their losses; gambling in pubs on ‘Smartphones’ and gambling when drunk. You can see why the company executives and the banks fell for this story of online gambling being plated in gold. This story has been falling apart for a number of years.

Now it seems the internet is the ideal place for the gambler: Wrong, because of?

The present gambling market and company practices

The previous section outlines the challenges the gambling market now presents for companies.

The sports betting market is a nightmare. How do you make a profit, with all the associated business costs, when the market for each event is so competitive?

1. Quite legitimately companies promote poor value products, e.g. accumulators, other multi-bets, in-play, cash out, etc. This will keep the companies and most customers happy. The customer often does not know they are using poor value products and they are happy with the dream of a bigger win and the chance to guarantee their profit (cash out); assuming it has not disappeared as an option, as it often does. The companies are also happier with this, because they have a much higher chance of making a profit from sports betting.
2. Quite legitimately companies try to migrate customers to products that guarantee profits, e.g. fixed odds betting terminals, online casinos and bingo.
3. Quite illegitimately companies use ‘sharp practices’ to improve their chances of profitability.

Sections a) and b) are the expertise of the gambling companies, so this author will leave those to them and concentrate on section c), which explains candidly why the present gambling market is not ‘fair and open’. Let’s begin by posing some questions.

1. When a customer opens an online gambling account does the customer expect to trade using clear, fair terms and conditions that can’t be held against him/her?
2. When a customer opens an online gambling account does the customer hope to win money, however difficult that may be?
3. When a customer opens an online gambling account does the customer expect to receive their winnings, if they ever have any, quickly and without hassle?

The answer to all these three questions is yes, whereas, in fact, the modern reality of these questions is often the opposite. How can this be right? This industry claims to be highly regulated, when in truth, most if not all companies are getting away with ‘sharp practice’ on a daily basis.

In the case of question 1 (When a customer opens an online gambling account does the customer expect to trade using clear, fair terms and conditions that can’t be held against him/her?), it is now common knowledge that the UK’s ‘Competition and Markets Authority’ (CMA) is investigating the terms and conditions used by online gambling companies. Of course, we don’t know the outcome yet and the trade organisations claim there is little wrong, but do we really imagine the CMA would have embarked on this investigation if they believed little was wrong? If you’ve studied consumer law for over one week you will realise that quite a number of terms and conditions used by gambling companies are

blatantly unfair. The most disappointing aspect is that it took so long for the investigation to happen.

The injustices of the written word within the terms and conditions is compounded by how many gambling companies train their customer service staff, e.g. they train them to tell customers that the terms and conditions are not only fair, but that they cannot be challenged. This reflects very badly on the industry.

In the case of question 2 (When a customer opens an online gambling account does the customer hope to win money, however difficult that may be?), unless you use a betting exchange or trade with ‘BlackType’ you have no chance whatsoever of winning on a regular basis, however small your stakes. Using perfectly acceptable methods combined with highly dubious methods all other gambling companies licensed by the UK Gambling Commission quickly profile all new customers. If a customer is deemed to be using a betting approach that uses any form of logic their account will be closed or effectively closed through the use of stake factoring. In theory, it should not be difficult for a customer to turn a sports betting market with a small over-round from a losing one into a winning one, especially when you add-in all the promotional offers, so a significant number of customers have to be stopped from sports betting very, very quickly, if not immediately. How many new customers know this?

Most of the population would recognise that it is impossible for gambling companies to trade forever with winning professional gamblers, but do they realise that all gambling companies, except one and the betting exchanges, do not trade with anybody who might win (you don’t even have to win before the restrictions occur); probably not? This industry practice over the last decade has led to a ridiculous situation where gambling companies do not know who they are trading against. Mr Jones is actually Mrs Smith or Mr Clarke. Neither the customers nor the companies appear to be breaking any laws, but the behaviour by both parties, especially the companies is now unacceptable. Whilst not seeming to break any laws, although this is debatable, the companies are pushing every fair consumer practice to the limit.

In the case of question 3 (When a customer opens an online gambling account does the customer expect to receive their winnings, if they ever have any, quickly and without hassle?), the situation is a bit of a mess, especially in the gaming sector. Most sports betting customers get paid and quickly. It would be nice to think all winning sports bets were still honoured, but they aren’t. Some winning bets are not paid at all citing many different dubious reasons, plus some are paid after illegally deducting offers, e.g. Best odds guaranteed. However, in the main it does not seem to be a daily problem. More frequent, is where gambling companies invoke their social responsibility procedures, which often is a charade at a convenient point in time. ‘Justice for Punters’ has seen some shocking invasions of privacy, combined with refusal to pay winnings, without any sensible reasons been cited.

The sports betting sector is dwarfed by the gaming sector when considering the issue of not paying out. ‘Justice for Punters’ only has anecdotal evidence from numerous cases, but we now think there is an industry wide policy not to pay gamers straight away when they win significant amounts of money, as the delay gives the customer a chance to lose their said winnings. These delays can be weeks if not months. This is dressed-up as social responsibility, but why were the protocols not instigated when the same individuals were losing thousands of pounds? ‘Justice for Punters’ has also been told by an ex-director of a very large gambling company that it is industry wide policy to do what is explained here.

Green Paper On Online Gambling In The Internal Marketers

Conclusions

It is clear that the modern gambling market presents many challenges for all the parties concerned.

It is also clear that the market is not ‘fair and open’ primarily because the market has been ‘broken’ by company practices. The business plan being used by the vast majority of companies is one of ‘churning’ customers through offers and promotions, which make an already difficult sports betting market into a non-profitable market, unless all customers who have any betting ability are excluded and losing customers are encouraged to lose more on poor value or other types of guaranteed profit gambling products. Sadly, this encouragement to lose more does include people who lose everything.

Customers are presently being sold a gambling product that is very different to the reality. The customer is not allowed to win in the medium or long term. With some gambling companies medium term can be defined as over 1-3 sports bets. At the same time, whilst efforts are being made to improve social responsibility the companies are so reliant on their profits from big losing customers; it is inconceivable that the most effective social responsibility approaches will ever be put in place without appropriate penalties or regulation supported by statute.

Recommendations

• Use technology to improve social responsibility within the industry, thus reducing the impacts of ‘problem gambling’.Note: This technology already exists and is not expensive, e.g. online tracking software, CCTV in shops and finger-print recognition for fixed odds betting terminals.
• Work with the banking and finance sector to make it easy for people to block their debit and credit cards being used for gambling transactions.
• Redraft the guidelines on customer verification procedures to include a point where companies must state a specific legal reason, which could be challenged, why completion of the process is being delayed, e.g. unredacted bank statements or lawyer signed documents could not be asked for without a legal reason being cited. Secondly, provide rapid access to a third independent party if scans containing personal information are not deemed to be of satisfactory quality by companies.Note: This will stop the prevalent false claim that submitted scans are not clear and make companies state why there is a need for more proof of identity. Any costs incurred should be covered by companies unless the customer is proven to be acting illegally (illegally does not mean in breach of T&Cs, because many are unfair).
• Restrict new account promotions to no more than £10 in value.Note: This will help to address problem gambling, the ‘churning’ of customers and the potential profitability of each customer. The latter example will also help create an ‘open and fair’ gambling market, because each customer will have a better chance of being profitable for the company.
• Promotions for those with an account must be available to all customers.Note: This will decrease massively the number of promotions offered thus helping to address the potential profitability of each individual sports betting market and the associated benefits to an ‘open and fair’ gambling market this will bring.
• Introduce a minimum liability (bet) rule for sports betting.Note: This will solve 95% of the pay-out issues as gambling companies, in the main; will know who they are trading against. It will also mean the word gambling is interpreted as it is defined, i.e. that customers win or lose once again.

These recommendations do not address all of the challenges in the modern gambling market by any stretch of the imagination, but they will certainly provide a good platform for beginning to address some of the major problems. They are desperately needed, because as mentioned, the gambling market is ‘broken’, unfair and certainly not open. It is very unlikely progress will be made without a greater input from customers and more direct regulation. The present market, in part, reflects the inability of companies to trade fairly in a light touch regulatory environment.

NB: This review was written in preparation for the second meeting between ‘Justice for Punters’ and the UK’s Gambling Commission (GC) as part of the GC’s work on improving consumer communication and gambling experience.

This sample Gambling Research Paper is published for educational and informational purposes only. If you need help writing your assignment, please use our research paper writing service and buy a paper on any topic at affordable price. Also check our tips on how to write a research paper, see the lists of psychology research paper topics, and browse research paper examples.

Gambling is a strikingly ubiquitous human activity. For most people it constitutes a fairly casual pastime, amid a varied matrix of social and leisure pursuits. For some, however, gambling is anything but a casual activity: for the pathological gambler, gambling is preoccupying, consuming substantial time and money. The American Psychiatric Association regards pathological gambling as an impulsive disorder manifest as an addiction to gambling akin to alcohol or drug addiction. This entry briefly describes the salient characteristics of the pathological gambler and indicates the current prevalence of the disorder. Explanations for pathological gambling are reviewed along with comments on treatment and intervention.

Gambling Research Paper Outline

I. Gambling

II. Pathological Gambling

III. Prevalence

IV. Explanations

A. Cognitive Bias

B. Personality

C. Arousal

V. Treatment

VI. Conclusions

VII. Bibliography

I. Gambling

Gambling, in some form or another, is legally sanctioned in more than 90 countries worldwide and in 48 of the 50 states of the United States. In 1988, it was estimated that Americans legally wagered some $210 billion; by 1991, the estimated expenditure on gambling had soared by 50% to $304 billion. The proliferation of video lottery terminals and the establishment of casinos on Native American lands, consequent on passage of the federal Indian Gaming Regulation Act in 1988, are just the most recent manifestations of the progressive loosening of legislative restrictions on gambling. In this context, it is worth noting that in 1974, the total of legal wagers in the United States was $17 billion, a mere 5 % of the most recent expenditure estimates.

Other countries have increasingly adopted similarly supportive legislative postures and have shown similar expenditure trajectories. For example, government revenue from gambling in Australia rose from $168 million (Australian dollars) in 1972-1973 to $2.02 billion in 1992-1993. Indeed, some countries began relaxing strictures against gambling much earlier than the United States. Although the United Kingdom was slow to appreciate the fiscal possibilities of lottery gambling, the Gaming Act, which legalized gaming for profit, became law in 1968. Among other things, it allowed licenses to be granted for slot machine installations in cafes, leisure centers, or dedicated slot machine arcades, with access policed only by a voluntary code of conduct, devised by the British Amusement and Catering Trade Association (BACTA). The BACTA code prohibits those under 16 years of age from entering slot machine arcades. However, the code does not apply to seaside arcades, does not bind owners who are nor members of the association, and does not apply to nonarcade sites. Thus, while other European countries, Australia, and the states of the United States set the legal minimum age of access to slot machines at 18 or 21 years, the United Kingdom, in effect, exerts no legal restriction.

Not surprisingly, the legislative arrangements that govern gambling have implications for behavior. For example, whereas other countries are not without problems related to slot machine gambling, it would appear that the heavy involvement of young people is a particularly British phenomenon. In the United Kingdom, organizations such as Gamblers Anonymous (GA) report an increasingly large number of under-18 youths seeking help for excessive or uncontrolled slot machine use. In 1964, the typical British GA member was a 40- to 50-year-old horse race gambler; by 1986, approximately 50% of new members were slot machine players, half of these being adolescents.

Legislative relaxation in the United States has not only seen a massive increase in expenditure on gambling, it has also been associated with a substantial increase in participation. In 1974 in the United States, about 60% of the adult population was estimated to have participated in some form of gambling. By 1990, the figure had risen to just over 80%, and the most recent estimates, based on sampled states, suggest that the current lifetime participation rates may be even higher.

These figures are cited only as illustration. Nevertheless, they are broadly representative. With increasing legislative laissez-faire has come increased access and participation rates, as well as massively increased expenditure on gambling, not to mention, in many cases, vast increases in government revenues. In addition, where legislation and cultural values permit, gambling appears to be a prevalent activity among the young. For example, surveys show that between 3 % and 14% of British high school students are regular slot machine players. The figures for occasional use are more dramatic, with two thirds of British adolescents reporting use of gaming machines in arcades.

II. Pathological Gambling

While for most people gambling represents an occasional distraction, for the pathological gambler it is anything but. In contrast to the occasional or recreational gambler, the pathological gambler has lost control over his or her gambling behavior. Gambling has, for such an individual, reached the point of disrupting not only his or her life, but also the lives of close family members and friends. In 1980, the American Psychiatric Association (APA) formally recognized pathological gambling as a disorder of impulse control, similar in many ways to other addictions. Save for “chasing” losses, the criteria used for defining gambling as pathological were very much modeled on those used to define alcohol and drug abuse. Like the substance addict, the pathological gambler is consumed by gambling, and will beg, borrow, cheat, and steal to support their addiction. Like the substance addict, the pathological gambler often shows tolerance, needing to increase the size or the frequency of the bet to achieve the desired excitement or “high.” Similarly, withdrawal symptoms of disturbed mood and behavior are evident when gambling is curtailed. With regard to withdrawal, one study interrogated 222 pathological gamblers. Sixty-five percent reported at least one of the following: insomnia, headaches, upset stomach, loss of appetite, physical weakness, heart racing, muscle aches, breathing difficulties, sweating, and chills. Indeed, the pathological gamblers reported, if anything, more withdrawal symptoms than did substance-addicted control subjects. Finally, there are many instances of cross-addictions among pathological gamblers. Some studies have observed that as many as 50% of pathological gamblers had abused alcohol or drugs at some point in their lives.

The following criteria are currently recommended by the APA as being characteristic. A diagnosis of pathological gambling is registered if an individual meets five or more of these criteria, with the proviso that the behavior is not better accounted for by a manic episode. A person may meet the criteria if he or she:

1. Is preoccupied with gambling (e.g., preoccupied with reliving past gambling experiences, handicapping or planning the next venture, or thinking of ways to get money with which to gamble)
2. Needs to gamble with increasing amounts of money in order to achieve the desired excitement
3. Has repeated unsuccessful efforts to control, cut back, or stop gambling
4. Is restless or irritable when attempting to cut down or stop gambling
5. Gambles as a way of escaping from problems or of relieving a dysphoric mood (e.g., feelings of helplessness, guilt, anxiety, depression)
6. After losing money gambling, often returns another day to get even (“chasing” one’s losses)
7. Lies to family members, therapist, or others to conceal the extent of involvement with gambling
8. Has committed illegal acts such as forgery, fraud, theft, or embezzlement to finance gambling
9. Has jeopardized or lost a significant relationship, job, or educational or career opportunity because of gambling
10. Relies on others to provide money to relieve a desperate financial situation caused by gambling

III. Prevalence of Gambling

Prevalence is the measure of the rate of a given phenomenon, such as pathological gambling, in a given population at a given time. Accordingly, the examples of prevalence rates cited here will necessarily be parochial. Although there are reasons for suspecting that the rates have increased in recent years, the data are circumstantial. As yet, there are no published reports of repeat prevalence surveys conducted on the same population. Nevertheless, there are clear trends apparent in research findings. Consider, for example, surveys of slot machine gambling among British high school students; in general, higher rates of pathological gambling appear in more recent surveys. Similarly, an escalation in pathological gambling can be inferred from the increase in treatment-seeking behavior. Consider the example of Holland and its alcohol and drug treatment centers. The number of individuals seeking treatment for gambling-related problems at these centers has increased strikingly over time. While only 10 individuals sought information or treatment in 198.5, 400 did so in 1986, 1200 in 1987, and 3883 in 1991.

The only national survey in the United States was conducted in 1974. The authors concluded that 1.1 million Americans were probable pathological gamblers. More recently, researchers have relied for data on state-based prevalence surveys. Those carried out since 1990 report prevalence rates ranging from 1.4 to 2.8%. Surveys of gambling behaviors in Canadian provinces yield, if anything, slightly lower prevalence rates, but much depends on the definition of what constitutes pathological. One of the problems with the survey research is variation in the criteria used to define pathological gambling. For example, if one adheres to a strict definition of pathological gambling, the Canadian provincial rates range from 0.8 to 1.7%. However, if one relaxes the definition to include problem gamblers who possess almost, but not quite, a sufficient number of the defining characteristics to qualify as pathological gamblers, the prevalence rates range from 2.7% in Saskatchewan to 8.6% in Ontario. Other countries are gradually beginning to survey their populations. Rates of pathological gambling in regions of Spain currently run at about 1.7%. In Australia, a partial national survey revealed pathological gambling rates of 1.2%, an identical figure to that which emerged from the recent national survey in New Zealand. Some appreciation of what these figures mean in social problem terms can be obtained by extrapolating from the case of New Zealand. A prevalence rate of 1.2 % implies that there are approximately 27,500 pathological gamblers in New Zealand. If we assume an overall current prevalence rate of 2 % in the United States, a reasonable assumption given recent individual state estimates, and an age structure similar to New Zealand, we can calculate that there are more than 3 million pathological gamblers in the United States.

There are reasons for suspecting, however, that the prevalence rates revealed by many of these surveys are, if anything, underestimates. We have already alluded to the matter of the criteria used to identify pathological gambling; someone may have severe problems with gambling, yet fall just short of pathological status. Secondly, most of the prevalence surveys have relied on telephone data collection techniques. Such an approach has obvious pitfalls. Pathological gamblers may be underrepresented as they are more likely to have their telephones cut off periodically for nonpayment of bills, or to be too poor to possess telephones. Furthermore, telephone surveys have notoriously high nonresponse and refusal rates; pathological gamblers are less likely to be at home to telephone enquiries and, if they are, more likely to be reticent in the face of enquiries about gambling. This would again lead to pathological gamblers being undersampled. Problems also arise from unsampled groups, such as those in institutional care. Studies of patients in alcohol and drug treatment centers reveal prevalence rates of pathological gambling of 9 to 15 %. The exclusion of such individuals from surveys of pathological gambling will consequently lead to underestimates of prevalence. There is also emerging evidence of relatively high rates of pathological gambling among adolescents. For example, recent surveys among high school age individuals in Canada registered pathological gambling prevalence rates of about 3 %. Most general telephone surveys necessarily exclude adolescents and are, as a result, likely to yield prevalence estimates lower than the true figure.

Finally, individual surveys in the United States usually show that pathological gambling prevalence rates are higher among those with low levels of education, as well as being higher among males, young adults, and nonwhites. It is worth noting that young adults and nonwhites tend to be underrepresented in treatment programs. Thus, treatment may not be reaching many of those who need it most.

IV. Explanations of Gambling

Early attempts to account for pathological gambling relied either on psychodynamic metaphor or on a strict application of reinforcement theory. From a psychodynamic perspective, gambling was regarded as an attempt to resolve conflicts with parental figures through symbolic contests with a surrogate. Pathological gambling reflected an unconscious desire to lose such contests, thus appeasing the parental figures. Reinforcement theory regarded gambling as a learned response to intermittent schedules of financial reinforcement. Pathological gambling, from this perspective, was the result of repeated exposure to these powerful schedules. Neither provide a satisfactory answer. While psychodynamic explanations are couched in a manner that renders empirical examination extremely difficult, strict reinforcement theory, with its emphasis on purely financial contingencies, gives improper regard to other motivating agencies and to intraindividual factors.

Other, recent theoretical models of pathological gambling are much more multifactorial in character, and, although retaining variable financial reinforcement schedules as part of the explanatory matrix, have incorporated a range of other factors. Most prominent among these are cognitive bias, personal disposition, and arousal.

A. Cognitive Bias

One of the most influential contributions to a cognitive psychology of gambling has been the work of Ellen Langer on the illusion of control. The illusion of control is defined as an expectancy of personal success inappropriately higher than the objective probability would warrant. In an elegant series of laboratory studies, Langer demonstrated that subjects’ appropriate orientations toward chance events could be altered by a range of manipulations. For example, subjects who cut cards against a nervous competitor bet more than when playing against a confident competitor. Subjects would pitch the sale price of a lottery ticket that they had chosen themselves at a higher price than they would a ticket chosen for them. Subjects given the opportunity to practice a novel game of chance would bet more than those denied such an opportunity. Finally, subjects led to believe that they were particularly successful during the early trials of a coin-tossing task rated themselves as significantly better predictors of outcomes than subjects led to believe they performed poorly in the early stages of the task.

In summary, if devices conventionally characteristic of skill situations are introduced into chance situations, individuals will inappropriately shift their expectations of success to levels better than chance. For example, provision of “feature” buttons which control aspects of slot machine behavior may enhance beliefs that skill is relevant to this form of gambling. Studies of gamblers in naturalistic settings yield confirmatory data. Regular gamblers frequently deny the importance of chance factors in their chosen pursuit, erroneously believing that they have devised a winning system. They display flexible attributions in that success is attributed to their own skill, whereas external factors such as bad luck or fluke circumstances are invoked to account for losses.

It is also clear that individuals vary in the degree to which they generally attribute outcomes to internal factors, such as skill, or to external factors, such as luck. Thus, some individuals may be more likely to adopt a skill or control perspective in essentially chance situations. There is certainly evidence from studies of slot machine players that an internal locus of control may be particularly characteristic of young pathological slot machine gamblers.

B. Personality

Aside from orientations regarding the locus of control, other personality factors have been implicated as predisposing a person to pathological gambling. Given the variety of personality questionnaires that have been deployed and the variations in the populations studied, it is perhaps hardly surprising that not all studies point in the same direction. Nevertheless, some consistent themes can be discerned. Sensation-seeking, impulsivity, and lack of concern for others emerge as characteristic of pathological gamblers in a number of studies.

Results from studies that have measured a disposition toward sensation-seeking have yielded equivocal results. However, perhaps sensation-seeking is best regarded in the context of prevailing levels of stimulation. Evidence seems to indicate that pathological gamblers, apart from their gambling, endure a lifestyle noticeably low in stimulation, and many report relief from boredom as a major motivating force. Accordingly, to the extent that sensation-seeking is implicated in pathological gambling, it is perhaps less as a personality trait, and more as a response to characteristically low levels of stimulation and arousal.

While caution is appropriate, given the bias toward male subjects in research, impulsivity and a lack of concern for others emerge from a number of studies of pathological gamblers. Pathological gamblers score high on a range of questionnaires devised to measure disregard for others, lack of empathy, inability to form and sustain relationships, attraction to risk and danger, and preference for immediate stimulation regardless of the consequences. Further evidence on impulsivity emerges from electroencephalographic studies. Drawing on the theory that brain hemispheric dysregulation is related to poor impulse control, hemispheric activation was measured in response to simple verbal versus nonverbal tasks. Pathological gamblers showed a pattern of activation dissimilar to normal control subjects, but similar in many ways to children with attention deficit disorder. Probably the major behavioral characteristic of such children is impulsivity. It has been speculated that at the neurochemical level, poor control of impulses may reflect a deficit in a particular brain neurotransmitting substance, serotonin. There is some recent evidence in line with this speculation. A serotonergic probe was used to measure the degree of activity of the serotonin system in pathological gamblers and matched control subjects. The pathological gamblers showed hypoactivity relative to the controls. It would appear that pathological gambling may share common neurochemical features with other behavioral disturbances characterized by poor impulse control.

C. Arousal

A number of recent theories propose an important role for arousal in pathological gambling theories. Such theories add arousal, as a reinforcer on a fixed-interval schedule, to the more commonly hypothesized variable financial schedule to explain what sustains pathological gambling. Indeed, it has been argued that arousal as a reinforcer may be the most important determinant of loss of control. From this perspective, then, arousal in combination with irregular financial schedules is regarded as the driving force behind pathological gambling.

Early laboratory investigations of heart rate as an index of arousal suggested that gambling was not particularly provocative. However, the ecological validity of these studies has been questioned. Tellingly, a key study found only modest increases in heart rate among students and regular gamblers in the context of a laboratory casino. For the regular gamblers in a real casino, however, substantial increases in heart rate accompanied gambling. Furthermore, the magnitude of the increase was related to the size of the wager. In subsequent studies, reliable increases in cardiovascular activity has been observed during slot machine play and horse race gambling.

Nevertheless, there is still no strong evidence that individual variation in arousal underlies pathological gambling; that is, there is no evidence that pathological gamblers are any more aroused by gambling than recreational gamblers. Furthermore, a recent study comparing pathological and recreational slot machine gamblers suggested that it might be baseline levels of arousal that are discriminating, and not the magnitude of the increase provoked by gambling; pathological slot machine gamblers tended to register low baseline arousal levels.

V. Treatment of Gambling

A variety of treatments have been applied to pathological gambling, but have not, on the whole, been subject to systematic and controlled evaluation. Because, for many, GA is the main or only recourse available, it is unfortunate that its mixture of disclosure and social support has received so little formal evaluation. In a study of 232 GA attenders in Scotland, 8% were abstinent at the 1-year follow-up; by the 2-year follow-up, 7% remained abstinent. The addition of behavior therapy to the usual GA provisions seemed to produce better results; in one study in the United States that used this combination, 54% reported gambling less than they did before treatment. This latter study raises an, as yet, unresolved issue: the appropriate outcome measure. Whereas earlier studies championed complete abstinence, there has been a shift toward moderated gambling as the preferred treatment outcome. Moderated gambling is not necessarily, as critics claim, associated with an increased probability of a return to pathological gambling. There is even evidence that intermittent relapses from complete abstinence can occur without gambling returning to pathological proportions.

A number of earlier studies applied behavioral techniques to the treatment of pathological gambling. The underlying assumption of the behavioral approach is that pathological gambling constitutes a learned response to schedules of intermittent reinforcement by money and arousal. The most common treatment procedures have been aversive conditioning and covert sensitization. In the former, unpleasant, but not painful, electric shocks are administered while individuals engage in gambling behavior. In the latter, aversive imagery is substituted for the electric shocks; the gambler is guided through a sequence of imagined gambling scenes characterized by unpleasant physical (e.g., nausea) or social (e.g., discovered gambling by spouse) consequences.

Green Paper On Online Gambling In The Internal Markets

The application of both of these techniques has produced encouraging outcomes, with up to 40 to 50% of pathological gamblers reporting either complete abstinence or that gambling is under control at follow-up. Nevertheless, caution is warranted. None of the behavioral treatment studies to date has included proper control conditions, many have treated very small numbers of gamblers, and the follow-up period has often been of limited and insufficient duration.

More recently, cognitive therapies have been tried. These are based on the assumption that faulty and erroneous cognitions are important determinants of pathological gambling. The aim of therapy is to replace dysfunctional cognitions with adaptive and rationale thinking. While there are fewer data available, cognitive therapies would seem to produce outcomes not wholly dissimilar to more purely behavioral approaches; that is, about 40 to 50% of pathological gamblers derive benefit from the therapy.

Of the various behavioral and cognitive approaches that have been applied, currently the most promising is imaginal desensitization. In contrast to covert sensitization described earlier, imaginal desensitization promotes images in which the gambler is no longer excited by gambling and no longer thinks of it as a way of dealing with tension, stress, and boredom. Participants practice relaxation along with imaging four scheduled scenes. In the one published controlled treatment outcome study, imaginal desensitization was compared with aversive therapy. Whereas only 2 out of 10 of aversive therapy participants reported that they were abstinent from gambling at 1-year follow-up, 7 out of the 10 imaginal desensitization participants did so.

As gambling has become more accessible, so the casualties have increased. While the development of effective treatment is very much in the early stages, the need is pressing. It is clear that our general understanding of pathological gambling is improving, and, accordingly, more recent therapeutic initiatives are being informed by more sophisticated theory. However, in this context, we would do well to pay more heed to the models of behavior change being deployed elsewhere. Most relevant are the therapeutic models being applied to changing unhealthy behaviors, such as cigarette smoking and poor dietary habits. In particular, the stages-of-change model, described first in 1984 by Prochaska and Di Clemente, is worth close consideration.

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The stages-of-change model has, as its starting point, a keen appreciation that people differ in their willingness to consider or to adopt behavioral changes. Furthermore, the process of change contains a series of stages through which individuals progress, reflecting the temporal dimension in which behavior change occurs. A stages-of-change model may be particularly applicable to changing gambling behavior in that it describes both the nature of change and the strategies most likely to facilitate change. Five stages of change are identified. The first stage is known as precontemplation. Here, no or only occasional thought is given to changing behavior. The next stage is known as contemplation, in which the individual begins to consider changing his or her behavior. However, contemplation does not guarantee action, and individuals can still slip back to the precontemplation stage. Nevertheless, contemplation may lead to active consideration, which is the necessary launching pad for behavioral change. These stages of active consideration and achievement of behavioral change are the planning and action stages. The final stage is one of consolidation and maintenance of behavioral change. From this perspective, intervention is about moving individuals from one stage to the next, from precontemplation to contemplation, from contemplation to active consideration, and so on. Thus, it is important that the therapist appreciates what stage the individual is at and also that different sorts of intervention are called for, dependent on stage. A number of researchers have identified phases in the career of a pathological gambler. At the very least, it has been argued, it is important to distinguish between acquisition and maintenance. Nevertheless, there has been, as yet, no systematic attempt to exploit a stages model in treating pathological gamblers.

Preventive strategies have received limited attention, although there are encouraging preliminary results from a high school-based program in Quebec. However, given the evidence implicating early initiation into gambling in the development of pathological gambling and the high prevalence rates of pathological gambling among adolescents in many countries, substantially greater energies should be devoted to developing and evaluating preventive strategies.

VI. Conclusions

It is clear that relaxation of legislative strictures and easing of access are associated with increased gambling. This is evident both in the numbers gambling and the monies wagered. It is almost certain that such changes have consequences for the numbers who gamble pathologically.

While substantial progress has been made, the study of gambling has still to yield a definitive account of the mechanisms that lead some individuals to pathological gambling. A variety of factors are undoubtedly involved. It is also likely that these various factors assume a different importance during progression from acquisition to maintenance, that is, from induction to addiction. For example, at the induction stage, positive cultural attitudes toward gambling, legislative laissez-faire, and early age of initiation all undoubtedly increase risk. Subsequently, compelling schedules of monetary reinforcement, the consistently arousing nature of gambling in the context of an otherwise unfulfilling and unstimulating lifestyle, a tendency to presume control when it is chance that operates, and a personality high on impulsivity and low on social concern, are all likely to be significant factors. Nevertheless, this is merely the bare bones of a theory, and, aside from the proposed role of hemispheric dysregulation and serotonergic deficits in impulsivity, we are without any account of the mechanisms operating at a neurobiological level. Given that pathological gambling may not be phenomenally distinct from other addictive behaviors, it is perhaps to the neurobiology of other, more fully studied addictions that gambling researchers should look for clues.

Both behavior and cognitive treatment techniques have been applied to pathological gamblers with some success. However, there is a dearth of properly controlled therapeutic trials. In addition, the treatment of pathological gambling could well benefit from adopting the therapeutic models that have been used successfully in other areas of behavior change. In particular, much could be gained from adopting a model that appreciates stages of change. Furthermore, more attention needs to be paid to preventive strategies. Given the prevalence rates of pathology gambling in young people, it is imperative that effective school-based preventive programs are developed. Finally, there may be a need to consider selective legislative intervention. Many of the substantial numbers of young people in the United Kingdom who fall afoul of slot machines could be helped by effective treatment regimes. However, simple legislative reform, restricting access to those 18 years or older, would undoubtedly yield more immediate and cost-effective dividends.

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