Interactive gambling

Interactive gambling

One of the most significant changes to the gambling environment in the past 15 years has been the increased availability of interactive or Internet gambling. Interactive gambling, including mobile gambling, is the fastest growing mode of gambling. This paper describes how and why Australians choose to gamble interactively. It will consider how interactive gambling differs from traditional land-based options and the differences between gamblers who do and do not gamble interactively. The discussion paper focuses on concerns regarding interactive gambling, including the risks it poses, particularly in terms of problem gambling. 

Key messages: 

Interactive gambling is increasing in popularity with intensive marketing being used to encourage greater use of this mode of gambling.

Sports and race wagering are the dominant forms of interactive gambling in Australia and interactive gamblers are more likely to be younger males.

Most online gambling occurs on home computers, but the popularity of mobile technologies is increasing, allowing Australians to gamble at any time, from any place.

Interactive gamblers tend to be more intensely involved in gambling than their land-based counterparts and more likely to experience gambling issues.

Harm reduction may be achieved through initiatives such as regulated gambling sites, community education about the risks of interactive gambling, specialised treatment and prevention programs, and improved understanding of the impact of new technologies on gambling behaviour.

The author wishes to acknowledge the valuable contributions of her colleagues who assisted with her research on interactive gambling, Professor Nerilee Hing, CGER Director, Southern Cross University, Alex Russell, CGER, Southern Cross University, Professor Alex Blaszczynski, University of Sydney, and Associate Professor Robert Wood, University of Lethbridge. The author would also like to acknowledge and thank the Menzies Foundation and Gambling Research Australia for providing funding for and commissioning research on interactive gambling in Australia.

Dr Sally Gainsbury is a Senior Lecturer in the Centre for Gambling Education & Research at Southern Cross University. Dr Gainsbury has led and been a co-investigator on two of the largest studies of interactive gambling in Australia. She was invited to consult with the Department of Broadband Communications and the Digital Economy in their review of the Interactive Gambling Act, and has been asked to provide expert testimony and submissions to numerous Australian state and federal inquiries into gambling as well as international government regulators. She has also assisted in the development of online responsible gambling practices, prevention strategies and treatment options for national and international stakeholders.

AGRC Discussion Paper
3
10 pp.
ISSN: 
2204-2989
ISBN: 
978-1-922038-86-9

The rise of interactive gambling

  • Interactive or Internet gambling is any gambling conducted online, using computers, tablets, mobile smart phones or televisions.
  • Regulating interactive gambling and enforcing regulations is a complex issue.

Interactive gambling is a term largely interchangeable with Internet, remote, and online gambling. It refers to the range of gambling activities offered through interactive media, including computers, mobile and smart phones, tablets, and digital televisions. This mode of gambling, facilitated by technological advances, is not a separate type of gambling activity but is distinct from gambling in person at land-based retail outlets and venues and placing wagers over the telephone.

Interactive gambling is growing rapidly in terms of popularity, market share and products offered. The online global gambling market was valued at US$40.59 billion in 2013, an increase of 4% over the previous year, and is expected to reach US$50 billion by 2017 (Global Betting and Gaming Consultants [GBGC], 2014). Online gambling is predicted to account for 9% of the total global gambling market between 2015 and 2017. Globally, the largest online gambling product is wagering,1 accounting for 53% of the market, followed by casino games (25%),2 poker (14%), and bingo (7%) (H2 Capital, 2013).

Regulation of interactive gambling is a contentious issue internationally, with most jurisdictions examining the benefits and drawbacks of legalising and regulating interactive gambling. Based on considerations and international experiences and in recognition of the difficulties of enforcing prohibition, an increasing number of jurisdictions are legalising and regulating interactive gambling using a variety of models.

The advantages and disadvantages of legalising and regulating interactive gambling

Advantages:

  • Regulation of products, services, and marketing
  • Reduction in use of offshore sites
  • Required consumer protection and harm minimisation policies and practices
  • Policies can be implemented to reduce criminal activities such as fraud, cheating, money laundering and match-fixing
  • Revenue through taxation and licensing.

Disadvantages:

  • Increased total gambling participation
  • Increased use of interactive gambling
  • Potential for increase in gambling problems.

 

Footnotes

1 Wagering refers to placing a bet of monetary value on the outcome of an actual event and is distinct from betting on games in which outcomes are randomly determined.

2 Including electronic gaming machines or "pokies".

Interactive gambling in Australia

  • The only legal forms of interactive gambling in Australia are those offered by licensed wagering and lottery operators.
  • Around 8% of Australians gamble interactively. This participation rate has increased from an estimated 1% in 1999.

In Australia, the Interactive Gambling Act 2001 (IGA) provides for overarching Commonwealth oversight, while allowing individual states and territories to retain some independent control. Under the IGA all interactive gambling is prohibited, with the exception of licensed wagering (excluding in-play betting) and lottery activities (Department of Broadband Communications and the Digital Economy [DBCDE], 2013). This regulation means that it is illegal for operators to offer unlicensed interactive gambling products to Australians, but it is not illegal for Australians to access offshore online gambling. This has created a situation where interactive gambling is partially legalised, but an estimated 2,233 offshore gambling sites provide services to Australians in contravention of Commonwealth laws. There are around 30-35 online gambling operators regulated by various states and territories in Australia.

Australia has one of the highest rates of Internet penetration and smartphone usage globally. Easy access to Internet-enabled devices, increased comfort with the use of Internet technology and online consumerism, in addition to a long-standing cultural acceptance of gambling, has resulted in a strong Internet gambling market. Despite its relatively small population, Australia is estimated to account for 5% of the global online gambling market (Gainsbury, 2012).

Participation in interactive gambling is growing rapidly. The rate of Australians gambling online has increased from a low base of under 1% in 1998-99 to 8% in 2011 (Gainsbury, Russell, Hing, Wood, Lubman et al., 2013). This growth in participation has occurred in the context of declining gambling participation rates overall, with annual participation decreasing from 82% in 1999 to 64% in 2011 (Gainsbury, Russell, Hing, Wood, Lubman et al., 2013). It was estimated in 2010 that the total value of interactive gambling in Australia was around AUD$1.6 billion, of which around 60% was spent on prohibited overseas services and the remainder with Australian licensed services (DBCDE, 2013).

The extent of domestic advertising and promotion for online wagering has increased substantially in recent years. Advertising has been found to increase awareness of this mode of gambling and increase the likelihood that gamblers shift from non-interactive to interactive modes (Hing, Cherney, Blaszczynski, Gainsbury, & Lubman, 2014). Internet gambling use is likely to continue to grow as interactive platforms (websites and applications) become increasingly used to engage in entertainment and recreational activities.

Characteristics of interactive gamblers

  • Uptake of interactive gambling is relatively recent, driven by convenient, easy access.
  • Interactive gamblers are more likely to be male, younger and have higher levels of education than solely land-based gamblers.
  • Interactive gamblers are likely to play a greater number of gambling activities and spend more money than solely land-based gamblers. Most also take part in land-based gambling.
  • Interactive gamblers are most likely to bet on legalised sports and races than use illegal websites.

Most interactive gambling appears to be based on relatively recent uptake. Australian research suggests that over half of those who took up interactive gambling did so after 2008 (Gainsbury, Russell, Hing, Wood, Lubman et al., 2013). Just over half reported a preference for interactive gambling, but many (approximately two-fifths) reported preferring land-based gambling. Most interactive gambling is done during the afternoons and evenings and from gamblers' homes (Hing, Gainsbury et al., 2014; Gainsbury, Wood, Russell, Hing, & Blaszczynski, 2012; Wood & Williams, 2010).

Advantages and disadvantages of interactive gambling reported by consumers

Advantages:

  • Convenience
  • Accessibility
  • Better payout rates
  • Better bonus rates
  • Easy to use
  • Fast
  • Larger selection of products and options
  • Ability to gamble at home
  • Anonymity and privacy.

Disadvantages:

  • Too convenient
  • Easier to spend money online
  • Not a safe way to gamble
  • Concerns about security of funds and personal information
  • Unreliable technology.

Source: Gainsbury et al. (2012); Hing, Gainsbury et al. (2014)

Interactive gamblers are a diverse population, but there is some evidence suggesting that interactive gamblers are still a distinctively different group to those who only gamble on land-based activities. They are more likely to be male, younger, have higher levels of education, and be employed full-time or be studying when compared to non-interactive gamblers (Gainsbury, Russell, Hing, Wood, Lubman et al., 2013; Wood & Williams, 2011).

Interactive gamblers appear to be more involved gamblers overall, participating in a greater number of forms of gambling, and spending more money gambling than non-interactive gamblers (Gainsbury, Russell, Hing, Wood, Lubman et al., 2013; Griffiths, Wardle, Orford, Sproston, & Erens, 2009; Wardle, Moody, Griffiths, Orford, & Volberg, 2011; Wood & Williams, 2011). Across all gambling activities (including land-based), interactive gamblers were more than three times as likely as non-interactive gamblers to bet on sports and more than twice as likely to bet on races (e.g., horse and dog races) and play casino games (e.g., blackjack and roulette) and poker (Gainsbury, Russell, Hing, Wood, Lubman et al., 2013). The majority (approximately 80%) of interactive gamblers also use land-based forms of gambling (Hing, Gainsbury et al., 2014).

The extent to which the Internet is used for gambling varies by activity. Among interactive gamblers, over 80% of all sports and race betting appeared to be done online, and two-thirds of lottery tickets were purchased via interactive means (Hing, Gainsbury et al., 2014). In comparison, less than half of all electronic gaming machine (EGM or poker machine) play was done online and only a minority of players used online EGMs exclusively. These results were consistent with respondents' stated preference for domestic sites, where these are available, and suggest that the legally available forms of interactive gambling are driving participation via this mode of access.

Mobile betting

  • The convenience of mobile betting is driving growth in interactive gambling.

Mobile betting, that is gambling online through smartphones, mobiles, tablets, and other wireless devices, has been a major contributor to the growth of interactive gambling in Australia. The global gross gambling yield from mobile devices was US$1 billion in 2006 and is predicted to reach almost US$12 billion by 2017. This represents an increase from 5% to 24% of the interactive gambling market (GBGC, 2014). Australia has one of the highest smartphone penetrations in the world and most online wagering operators offer mobile applications (apps) to capitalise on this and encourage customers to place bets at any time, from any place. The turnover from Australian mobile wagering rose 163% to reach A$3 billion in the year to June 2013 and is predicted to account for up to 70% of online wagering activity by 2016 (Stone, 2013).

One significant factor that is limiting the growth of mobile betting in Australia is the prohibition of "in-play" betting. "In-play" betting (also known as betting "in the run" or live betting) is a form of continuous wagering whereby the bettor is able to place bets after an event has begun (e.g., betting on the outcome of a football match at half-time or point-by-point betting during a tennis match). "In-play" wagering using the Internet is prohibited under the IGA, with the exception of horse and greyhound racing. However, these bets are still accessible through offshore sites.

Given the increased marketing efforts of gambling operators and availability of apps and smartphones in Australia, the popularity and use of mobile betting apps is likely to continue to increase. Recent growth in the use of mobiles and wireless devices for betting, for example, is generally attributed to convenience, and this growth must continue to be monitored (Gainsbury et al., 2012; Gainsbury, Russell, Hing, Wood, Lubman et al., 2013; Hing, Gainsbury et al., 2014). Nonetheless, despite the increase in mobile betting in recent years, the vast majority of interactive gamblers (87%) still prefer using desktop or laptop computers to gamble online compared to mobile (9.4%) or tablet (2.5%) devices, in part due to the greater security and usability of these devices (Gainsbury, Russell, Hing, Wood, Lubman et al., 2013; Hing, Gainsbury et al., 2014). and usability of these devices (Gainsbury, Russell, Hing, Wood, Lubman et al., 2013; Hing, Gainsbury et al., 2014).

Concerns related to interactive gambling

  • Features of interactive gambling such as its privacy and anonymity, continual and convenient access, and the ability to use electronic funds may increase risk of gambling problems.
  • Interactive gamblers are more likely to experience gambling problems than land-based gamblers, most likely related to their greater overall gambling use and expenditure.
  • Some interactive gamblers experiencing problems relate these to land-based gambling (most commonly EGMs), while others identify interactive gambling as the cause of their problems.
  • Risk factors for interactive gamblers who experience problems include being younger, male, from culturally diverse backgrounds, and the presence of alcohol and substance abuse.

Interactive gambling has some unique features that may pose additional risks for harm, particularly for vulnerable populations. Interactive gambling differs from land-based gambling primarily in terms of its constant availability, easy access, and ability to bet for uninterrupted periods in private, facilitated by the interactive and immersive Internet environment (Griffiths, 2012; Hing, Cherney, Blaszczynski et al., 2014; Wood, Williams, & Parke, 2012; Monaghan, 2009). Use of money online appears to lead to increased gambling and losses, particularly for those experiencing gambling problems, as people feel that they are not spending "real" money (Gainsbury, Russell, Hing, Wood, Lubman et al., 2014; Hing, Gainsbury et al., 2014; Hing, Cherney, Blaszczynski et al., 2014; McCormack & Griffiths, 2012; Wood & Williams, 2010). Surveys indicate that one-fifth to one-third of Internet gamblers report it is easier to spend more money online, and 15% of online gamblers consider this form to be more addictive than land-based gambling (Gainsbury et al., 2012; Gainsbury, Russell, Hing, Wood, & Blaszczynski, 2013; Wood & Williams, 2010).

Data collected by Australian gambling treatment services suggests that interactive gambling currently makes a small but growing contribution to gambling problems among those seeking formal help (Hing, Cherney, Gainsbury et al., 2014). A number of studies have found greater levels of problem gambling severity among samples of interactive as compared to non-interactive gamblers (Gainsbury, Russell, Wood, Hing, & Blaszczynski, 2014; Griffiths et al., 2009; Wood & Williams, 2011). In 2011, the problem gambling rate among interactive gamblers was three times higher than for non-interactive gamblers (Gainsbury, Russell, Hing et al., 2014). Interactive gamblers were also significantly more likely to have low and moderate levels of gambling problems. Evidence to date suggests it is likely that the more intense gambling behaviour of interactive gamblers is related to other problems, with no evidence that interactive gambling by itself causes problem gambling (Gainsbury, Russell, Hing et al., 2014; Philander & MacKay, 2014).

Research has investigated the gambling activities and modes of access that are most likely to be associated with problems. For interactive gamblers, sports and race betting is associated with problem gambling, a finding not obtained among land-based gamblers. However, a substantial proportion (one-third to one-half) of moderate risk and problem Internet gamblers attribute their problems primarily to land-based gambling, in particular to EGMs (Gainsbury, Russell, Hing, et al., 2014; Gainsbury, Russell, Hing, Wood, & Blaszczynski, 2013; Productivity Commission, 2010).

Further, Australian research indicates that a substantial proportion of problem gamblers who gamble online had existing problems prior to gambling online (Gainsbury, Russell, Hing et al., 2014; Gainsbury, Russell, Wood, Hing, & Blaszczynski, 2014). However, around half of those whose problems started after they first gambled online, attributed their problems to these online modes of gambling (Gainsbury, Russell, Hing et al., 2014). These results are consistent with other research findings (Wood & Williams, 2011), suggesting that for some problem gamblers, interactive gambling played an important role in the development of gambling problems, while others had existing problems, which were likely exacerbated by interactive gambling.

Potential signs of risky Internet gambling:

  • Gambling on multiple different activities, online and offline
  • Gambling online frequently and spending increasing amounts of money
  • Losing track of money won and lost on gambling sites and time spent gambling
  • Gambling alone for long uninterrupted sessions
  • Lying about or hiding online gambling
  • Gambling on credit (including using credit cards)
  • Neglecting other important activities, including relationships with friends and family, work or study, eating, sleeping, and self-care.

Research suggests that interactive problem gamblers are not distinctly different from gamblers who experience problems related to land-based gambling. However, there are some characteristics that appear to be risk factors for having problems with interactive gambling. These include being younger, male, and from a culturally diverse background (Gainsbury, Russell, Hing et al., 2014). Studies have also found higher rates of smoking and alcohol consumption, as well as substance abuse or dependence, among interactive as compared to non-interactive gamblers (Gainsbury, Russell, Hing et al., 2014; Gainsbury et al., 2012; Griffiths et al., 2009; Wood & Williams, 2011). It is likely that the profile of those at-risk for developing interactive gambling problems will change as this mode of gambling becomes more accepted and widely used.

You are not alone: Resources to help manage Internet gambling

  • Set a spend/deposit limit for your online gambling accounts.
  • Reduce limits on credit cards and transfers from bank accounts.
  • Avoid gambling when drinking alcohol.
  • Find non-gambling activities, online and offline.
  • Limit exposure to advertisements by installing ad-blocking software and enabling pop-up blockers.
  • Unsubscribe to any notifications and updates from gambling sites.
  • Avoid watching live sporting/racing events or televised poker.
  • Search for self-help tips on gambling help websites.
  • Suspend gambling accounts.
  • Self-exclude from online gambling sites.
  • Use software to block Internet gambling sites.
  • Contact a professional through face-to-face counselling, telephone helplines, or online chat and email, such as the services available at Gambling Help Online <www.gamblinghelponline.org.au>.

Next steps

  • Dedicated prevention and intervention policies and practices are needed to address interactive gambling problems.
  • Technological advances facilitate development of sophisticated harm reduction and responsible gambling strategies.
  • Community education is required on the risks of using offshore sites.

Technological advancements have changed the nature and accessibility of various forms of gambling in Australia. While there are currently no indications that the increased availability and use of interactive gambling has affected prevalence rates for problem gambling, concerns still remain that interactive gambling will have significant impacts in terms of gambling problems and related health and mental health. Nonetheless, this mode of gambling is likely to be attractive to individuals who are vulnerable to developing gambling problems and, as such, it is important to consider how to best minimise gambling-related harms.

Although interactive problem gamblers are similar to land-based problem gamblers, attention needs to be paid to developing different treatment and prevention initiatives. In particular:

  • Online treatments and brief interventions should be developed as alternatives to face-to-face counselling in recognition of the low help-seeking rates and preference of many people to seek help through interactive technologies.
  • Prevention initiatives need to be developed for interactive gambling and should target those most at risk.
  • Further efforts are needed to increase public awareness of the risks of Internet gambling, particularly among young people who are generally more Internet connected and prone to risky behaviours.

Advances in technology have great potential to develop and implement more effective harm reduction measures. As all online gamblers must be registered, and their gambling is automatically recorded, operators have the capacity to be able to monitor play and proactively identify potentially risky play. Proactive identification would enable tailored interventions, such as pop-up messages promoting limit setting tools and resources, and would allow operators to directly contact players to assess risk of harm. Limits and pre-commitment are also more easily facilitated using electronic gambling, as would be self-exclusion schemes that could be applied across operators. Research is needed on the most effective strategies that would assist in guiding policies and practices.

Introduction of harm reduction/responsible gambling measures can be a benefit to operators as well as consumers. Research has found that consumers value responsible gambling practices provided by gambling operators and believe that online gambling operators should take further steps to prevent gambling harm (Gainsbury, Parke, & Suhonen, 2013; Wood & Griffiths, 2008). Similarly, online gambling operators who do introduce harm reduction/responsible gambling measures are viewed as more trustworthy, which enhances consumer comfort and brand reputation.

Unregulated offshore gambling sites may pose additional risks for consumers if they do not include responsible gambling measures, or if the player has any disputes with the operator in terms of unfair practices. Australian gamblers should be alerted to these risks and discouraged from using offshore sites. Further research is needed in the area of interactive gambling in order for the implications and consequences to be fully understood. in order for the implications and consequences to be fully understood.

Further reading

  • Department of Broadband Communications and the Digital Economy (DBCDE). (2013). Final report 2012: Review of the Interactive Gambling Act 2001. Canberra: DBCDE.
  • Gainsbury, S., Hing, N., Blaszczynski, A., & Wood, R. (2011). An investigation of Internet gambling in Australia. Lismore: Southern Cross University, Centre for Gambling Education & Research.
  • Gainsbury, S. (2012). Internet gambling: Current research findings and implications. New York: Springer.
  • Hing, N., Gainsbury, S., Blaszczynski, A., Wood, R., Lubman, D., & Russell, A. (2014). Interactive gambling in Australia: Telephone and online surveys, conducted in 2011/2012. In Interactive gambling. Melbourne: Gambling Research Australia.

References

  • Department of Broadband Communications and the Digital Economy. (2013). Final report 2012: Review of the Interactive Gambling Act 2001. Canberra: DBCDE.
  • Gainsbury, S. (2012). Internet gambling: Current research findings and implications. New York: Springer.
  • Gainsbury, S., Wood, R., Russell, A., Hing, N., & Blaszczynski, A. (2012). A digital revolution: Comparison of demographic profiles, attitudes and gambling behaviour of Internet and non-Internet gamblers. Computers in Human Behavior, 28, 1388-1398.
  • Gainsbury, S., Parke, J., & Suhonen, N. (2013). Attitudes towards Internet gambling: Perceptions of responsible gambling, consumer protection, and regulation of gambling sites. Computers in Human Behavior, 29,235-245.
  • Gainsbury, S., Russell, A., Hing, N., Wood, R., & Blaszczynski, A. (2013). The impact of Internet gambling on gambling problems: A comparison of moderate-risk and problem Internet and non-Internet gamblers. Psychology of Addictive Behaviors, 27(4),1092-1101.
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