A Brief Re-cap from the NCRG and G2E: Part 2

In the second of our re-caps from the NCRG and G2E conferences we provide a summary from the G2E Panel on Proactive Process: Responsible Gaming Online. The session was chaired by Connie Jones, Director of Responsible Gaming at IGT and included Joachim Haeusler, Head of Responsible Gaming at bwin.party, Hillevi Stuhrenberg, Head of Responsible Gaming at Betsson, and Simo Dragicevic of Bet Buddy.

Simo opened up the discussion with an overview of the evolution of responsible gaming tools over the past decade and outlined the factors that are driving the adoption of new responsible gaming tools. Whilst regulation continues to be the major factor driving innovation and adoption in responsible gaming, there are increasingly more examples of how commercial B2C operators are adopting innovative and new advanced tools to help to protect vulnerable players in the absence of regulation. 

For example, Joachim Hauesler, head of responsible gaming at bwin.party, the world's largest listed commercial B2C internet gambling operator, described how bwin.party are using algorithms to detect problematic gambling behaviour to meet regulatory requirements in the Spanish iGaming market, specifically to support decisions as to whether players should be allowed to increase limits. Also Hillevi from Betsson, the Swedish internet gambling B2C and B2B operator, discussed a new online self-help tool that Betsson is piloting with their players which provides proactive online support from their players who feel they are at risk of problem gambling. The support is provided by an independent treatment provider and is voluntary, and any player information given to the treatment provider is confidential and not made available to Betsson. Both of these are great examples of how the commercial sector is seeing the benefits of implementing more personalized responsible gaming tools to help protect vulnerable players, whilst also building their brand equity and customer sustainability. We think it's very encouraging to see some of the recommendations from our industry expert review paper on CSR in gambling written in 2010 now being implemented in the market today.

Connie Jones then opened up the panel discussion with the audience. Much of the interest and questioning was around how B2C operators were using predictive analytics to better understand player behaviors to make personalized interventions. A topic that was discussed in the previous panel surfaced again too - how should operators best share data on self-exclusion? There appeared unanimous agreement on the need for centralized self-exclusion approaches, with Hillevi highlighting the approach to central self-exclusion adopted by the Danish internet gaming market. Simo also challenged the panel further, asking whether at some point in the future operators should collaborate and share not just self-exclusion data but also other player data, such as deposit and timing limits, to offer a unified responsible gaming platform across all operators for players. Whilst it's far to say this suggestion didn't receive overwhelming support from the panel, we feel it's another 'blue sky' thinking idea, that along with the adoption of universal predictive algorithms that was discussed previously, could one day become a standard practice in future regulated gaming markets.

British Gambling Prevalence Survey - Why the basic math should concern the British Government

The 2011 British Gambling Prevalence Survey (BGPS) reported that problem gambling levels as a percentage of adult population rose from 0.6 - 0.9% between 2007 and 2010. There are two ways to interpret this data. One can contextualise the data by comparing problem gambling prevalance rates in the UK to other countries e.g. UK problem gambling prevalence rates are lower than in other countries, such as Australia and the US, and similar to Germany and Norway. One can also look at the absolute increase and say a 0.3% increase is a very small increase in the grand scheme of things, and also caveat the results by stipulating they were at the 'margins of statistical significance'.

The other way to interpret these results is to think about them in the context of basic arithmetic. In a YouTube video that has had over 4 million hits, Albert Bartlett explains what he believes is the greatest shortcoming of the human race - Our Inability to Understand The Exponential Function. Let's apply some of this basic math to the BGPS results with a high-level analysis of the headline figures.

The UK problem gambling prevalence increase from 2007 - 2010 equates to around 14.5% per year. The prevalence survey also states the rate of problem gambling in the UK population remained constant at 0.6% between 1999 - 2007. If we take the annual increase using this period too, the increase to 2010 was around 3.8% per year. If we assume the UK adult population will grow at 0.58% per year, and if we look to 2018, the best case scenario is that UK problem gambling prevalence rate will have increased over 40% to around 650,000 adults (greater than 1.2% of the total adult population), the worst case scenario is the prevalence rates will have tripled to 2.7% (if the trends in the most recent BGPS continue). If we assume the true growth rate is somewhere in between (e.g. the median of the two rates, around 9%), the projected problem gambling prevalence rate will be at 1.6% of the total adult population by 2018. If we also assume that the UK government will not limit gambling supply and that funding to tackle research and education will remain relatively flat (based on the previous 3 years), whichever way you look at it using basic arithmetic, the UK is on course to have the same levels of problem gambling prevalence as those very same countries that today we point to to make the current UK rates look relatively low.

What does the analysis of internet casino gambling player data tell us about behaviour and risk?

Our research analysing internet casino data has now been published in the latest edition of International Gambling Studies (Vol. 11, No.3), a special edition on Internet Gambling. The paper outlines the phase 1 findings from research undertaken by Bet Buddy in partnership with GTECH and City University London which utilised anonymised player data from a research cohort of 128,788 players from three internet gambling sites licensed in Malta offering internet casino and poker to regulated markets. Whilst the research builds on the methodology adopted by the Harvard Medical School and bwin Interactive Entertainment AG (specifically Braverman and Shaffer (2010)), which analysed live action sports betting internet data relative to gambling risk factors using k-means clustering analysis, our research explores the casino results in new contexts not covered in previous research. To the best of our knowledge this research, along with the Harvard/bwin collaboration (an overview of the collaboration can be found here), is the only peer-reviewed research to be published that analyses actual internet gambling data, and is the only research to analyse casino internet gambling data in the context of risk.

Whilst we discussed some early insights from the research in a previous blog this paper contains the full results and analysis. Our results are analysed in the context of risk factors, game structure, player education and clinical models for problem gambling. For example, we suggest that the analysis of some risk factors, such as loss chasing, could prove problematic when using current gambling screens (such as DSM-IV) in the context of internet gambling. Our results showed that real active money gamblers with the highest intensity and frequency levels gambled predominantly on slots type casino games, in comparison to the most moderate gamblers who preferred table games. We also examined how behavioural analysis and feedback mechanisms can help players to regulate gambling behaviour (for example how medical data is being used to help people make more informed choices - see this TED video). We explore how the opportunities that data analysis offers can help move beyond the traditional applications of data analytics in the gambling industry such as in marketing and risk management, in that applying advanced data analysis in new contexts (e.g. healthcare) can identify individuals who would benefit from proactive intervention or lifestyle changes (McKinsey's Big Data report discusses the application of data analytics in industry in general in greater detail). When the results were analysed in the context of clinical models for pathological and problem gambling (such as the Pathways Model) we found certain limitations. For example, we would have benefited from augmenting our existing internet gambling data sets with new data sets, such as call centre data, which can also be used to help predict gambling behaviours (see Haefeli, J., Lischer, S., & Schwarz, J.(2011)). 

We believe that this research is an important step in furthering our understanding of internet gambling behaviours in the context of risk and player protection and welcome feedback from industry and academic practitioners. If you interested in finding out more about our research and product offerings then please contact us.

The Gambling Industry and Academia - Should They Collaborate?

A topic of interest within the gambling industry is the question as to what extent research and services to tackle problem gambling should be funded by the industry.  The topic is not new and has been debated for many years.  It was highlighted in Bet Buddy’s and City University's research paper last year and more recently was brought to attention in Professor Jim Orford’s new book called An Unsafe Bet: The Dangerous Rise of Gambling and the Debate We Should Be Having. 

Professor Orford states that government, service providers and academics are trapped in a consensus view about the benign nature of gambling expansion and are compromised in their ability to seriously challenge gambling expansion.  Orford argues that the independence of the academic community is crucial in areas such as tobacco, alcohol and gambling, however he states that there’s a growing risk that gambling research is being co-opted to serve industry interests.  Whilst some of the Orford's anti gambling expansion recommendations will not sit well with the industry (e.g.”UK based gambling internet sites should be made illegal”) it is a well written and researched book and provides an interesting overview of many issues within the industry.

There is no doubt that some conflicts of interest will always exist in collaborations between the gambling industry and academia.  However does this mean that they shouldn't collaborate?  The world is changing, and fast.  As gambling continues to evolve along a steep technology gradient, new and innovative approaches to research are required to keep up with the pace of industry innovation.  Whilst the rise of internet gambling offers exciting new opportunities for research it also requires more multidisciplinary experience and skills to effectively exploit these opportunities.  For example, B2C and B2B operators are best placed to provide access to players and player data and to advise on the features and technicalities of the vast range of online games they develop.  Specialist software analytics providers have the capability of taking player data and quickly identifying the sub-groups of players whose behaviour differentiates them from the norm.  Academics in gambling and psychology are best placed to validate the research underpinning analytical models and the results from them.  It is difficult to find one organisation that has all of this experience and capability under one roof.

So whilst a collaborative approach appears to make sense how does one overcome the conflicts of interest that exist?  Whilst there is no easy solution, academics and the industry working in isolation will not result in fast progress.  One of Orford’s recommendations is that 10% of industry profits should be directed towards problem gambling prevention and research.  Whilst additional funds will no doubt help researchers, forcing the industry to support research in such a manner may not be conducive to building important industry relationships.

An alternative and approach could be for interested collaborators to develop frameworks with which to build partnerships.  Such frameworks could include a series of principles that each collaborating party signs up to.  For example, one principle could be that academics must be held ultimately accountable for the design of research project aims and for presenting results.  Another could be that industry partners have sufficient consultation in the design of research proposals to enable them to fully apply their knowledge and expertise.  All participating parties could be asked to fund their own efforts in any collaboration project independently.  A more controversial principle could be that accountable academics are not allowed to commercialise the results of research that they were accountable for (although commercialising university research does happen).

As with the introduction of new technology, new research approaches would need to be actively tried to assess how effective they are, and either adapted (we are never 100% right first time) or rejected.  There are now examples in the industry where such collaborations have shed new insight into gambling research that could not have been possible without collaboration.  We at Bet Buddy are doing this too and will be presenting our research, undertaken in collaboration with both industry and academic partners, at the Responsible Gambling Council’s 2011 Discovery Conference.  We need academics to keep innovating and advancing research and we need the industry to support them in doing this therefore we believe that despite challanges to making such collaborations work we will see more of them developing as the industry continues to grow and mature.

‘The Hidden Addiction’ - National Problem Gambling Clinic 1st Annual Conference, London

Yesterday I attended the National Problem Gambling Clinic’s first annual conference at the Royal Society of Medicine in London and I wanted to share some highlights from the day.  The clinic is headed by Dr. Henrietta Bowden-Jones and provides treatment services for people with gambling disorders in the UK. 

Mark Griffiths, a professor in gambling studies at Nottingham Trent University, was the first speaker and talked predominantly about the impact of technology on the gambling industry and the opportunities and threats that this poses.  Mark shared with us his predictions on the trends he believes are going to shape gambling in the future, such as an emphasis on location-based marketing, greater use of behavioural tracking of player data and the growth of the in-play mobile market.

Professor Jim Orford from Birmingham University (recently awarded the Jellinek award for his academic contributions to addictions) talked about some of the key themes from his new book called ‘An Unsafe Bet’ and the dangers that gambling poses to public health.  The key takeaways from this talk were that over the years there has been an extraordinary increase in the gambling within society and that this causes concerns given gambling is dangerous and addictive.  He also argued that the public’s resistance to gambling is being eroded and that government and society are compliant in supporting industry interests in making gambling more socially acceptable, with one explanation being ‘Adaptation Theory’, which stipulates that an increased prevalence in gambling is coupled with society developing an ‘immunity to gambling’.  He shared an interesting statistic from the Australian Gambling Productivity Commission Report; "40% of gambling was problem gambling", which generated some debate.  A very frank and thought-provoking (and arguably controversial) talk indeed.

Back in June I wrote a short blog about a fascinating article in the Economist about the joys and perils of a near miss and I was delighted to have the opportunity to meet and listen to one of the key figures behind the research, Dr. Luke Clark from Cambridge University.   Amongst other findings from his research, Luke shared some very interesting brain imaging data looking at how the brain responds to near misses.  I would advise those interested in reading more about Luke’s research to read the original Economist article I referenced earlier in the year.  

Other speakers also included Dr. Neil Smith, principal psychologist at the clinic who discussed research into three approaches to cognitive-behavioural therapy undertaken by Robert Ladouceur, Nancy Petry and Tian Oeiand.  Also, Professor Wim van den Brink from the Amsterdam Institute for Addiction Research shared insights from his research into addictions, discussing how genes and heritability, risk factors and social and environmental factors all play significant roles in determining addictions.  Henrietta wrapped-up with a presentation outlining research on what is known about social issues and pathological gambling, specifically discussing homelessness, physical health, crime and domestic violence.  Henrietta also paid tribute to Malcolm Bruce (Head of Sustainable Gambling at Betfair) who was instrumental in helping to arrange the funding for the clinic when he worked at the Responsible Gambling Fund before joining Betfair. 

A final note to two ex-gamblers who have received treatment at the clinic and who shared their experiences with the conference.  Nothing quite brings home the negative consequences of problem gambling as hearing first-hand the pain it can cause to people and their friends and families.  So a great conference which focused  on interesting themes and exciting research – I look forward to next year!

Can Loss Chasing be explained by Behavioural Economic Theory?

Research by Xuan and Shaffer (2009) from The Division on Addictions (a Harvard teaching affiliate) sheds interesting light on our perceptions of loss chasing in relation to behavioural economic theory. Xuan and Shaffer analysed the play patterns of 226 online bwin gamblers who closed their accounts due to gambling problems. Their findings state that whilst players experienced increased monetary loss and increased their stake size prior to closing their accounts, they did not chase longer odds.

The authors frame their findings in the context of the work in the 1970s by Kahneman, Tversky and Slovic who analysed behavioural concepts and decision making, with Kahneman and Tversky’s paper in 1979, Prospect Theory: An Analysis of Decision under Risk, arguably one of the most important to be published in this field (Kahneman was awarded the Nobel prize for economics for his work in this field).

The group of gamblers in the Xuan and Shaffer study tried to recoup losses by increasing their stake on events with higher probabilities of winning i.e. they become more risk averse and, therefore, they bet more conservatively. However, the players did continue to bet with a greater stake size, albeit with less risky odds. Therefore whilst choosing less risky odds supports the theory of loss aversion, the fact they continued to bet using a different betting pattern perhaps adds less weight to the theory.  So I have an alternative theory that builds on this.

An additional explanation for the gamblers’ behaviours in this study could be the influence of cognitive biases such as regret theory, self-deception, over-confidence, and the sunk cost fallacy, rather than loss aversion. Jacobsen et al’s (2007) analysis of the influence of cognitive biases demonstrated that they play an important role in the development of problem gambling behaviour.  A study by Shefrin and Statman in 1984 that focused on loss realisation provides interesting insight into why investors tend to hold on to stocks that continue to lose value whilst selling performing stocks. One theory relates to avoiding regret, in that investors may resist realising losses as it is proof that their judgement is wrong. Their research also examined other emotional and psychological factors, such as mental accounting, where professional traders use heuristics, such as never letting their losses reach 10%, as a benchmark or anchor when to sell falling stocks.

Xuan and Shaffer’s paper provides a great insight into the gambling patterns of problem gamblers and their reference to loss aversion to explain gambling behaviours is very interesting and carries weight. In addition to loss aversion, other cognitive biases could have played an important role in the decision making process for gamblers as if they were truly loss averse, one can make the case that they would seek to limit their losses (like Shefrin and Statman’s traders) rather than to continue betting. Whilst many people today think there is very little difference between an investment banking trader and a casino gambler, I appreciate a direct comparison is too simplistic. One thing for sure is that this highlights the complexities involved in trying to get beneath the mind of a problem gambler.

EASG Conference – Some Links to Interesting Presentations

I was fortunate enough to attend the European Association of Gambling Studies conference in Vienna a couple of weeks back and the EASG have kindly posted the presentations on their website. There is a lot of really interesting information posted, and whilst it will take a long time to review them all, I’m going to give you some links to some of the sessions I attended.

Alex Blaszczynski from the University of Sydney gave a thought-provoking presentation on approaches to better understand the relationship between internet addiction and gambling whilst John McMullan from Saint Mary’s University (Canada) demonstrated an immense knowledge and understanding of online poker marketing and promotion and what this means from a responsible gambling perspective.

For a more detailed look at new thinking into problem gambling detection, I heard Tony Schellinck from Dalhousie University (Canada) give an overview of the work they are undertaking on developing FLAGS, a screen which acts as an early warning system to measure problem gambling risk. Joerg Haefeli from Lucerne University (Switzerland) gave an interesting overview of early detection research based on call centre data and his colleague Suzanne Lischer built on this when talking about early detection processes for problem gambling.

An increasing area of interest in academia is the link between youth gambling and social media, with presentations from Jani Kinnunen from the University of Tampere (Finland) and Jennifer Reynolds from the University of Toronto.

Finally, Sally Gainsbury from Southern Cross University (Australia) in Parallel Session 1 talked about the effectiveness of online interventions in the treatment of problem gambling and Henrietta Bowden-Jones told us about the great work she and her team are undertaking at the UK’s first NHS National Problem Gambling Clinic.

I could go on and on as there were many many other interesting talks and presentations but I would be here for some time!

Can the online gambling industry continue to grow profits whilst protecting players?

I’ve now completed my interviews with senior stakeholders this summer and the report is now available to view at Cass Business School’s website. First I’d like to thank the participants for taking part in this phase of my research. I interviewed representatives from the commercial sector, including Tim Phillips, Betfair’s Director of European Public Affairs, Clive Hawkwood, CEO at the Remote Gambling Association and Jean Moreau Jørgensen who is the Executive Director at the World Lotteries Association. It was very interesting talking to the commercial sector to understand both the initiatives operators are undertaking to progress the responsible gaming agenda and also to learn more about the challenges they face.

From academia I had the pleasure of talking to Professor Alex Blaszczynski from the University of Sydney, Dr Jonathan Parke from Salford University and Professor Roger Steare from Cass Business School. I found the academics were very open and balanced in their points of view, in terms of cautioning against jumping to generalisations about any links between internet gambling and problem gambling however also challenging the operators to do more where they can.

I also had very interesting conversations with the Andy McLellan, CEO of GamCare and Tex Rees who is eCOGRA’s Fair Gaming Advocate and John Carr OBE, Secretary of the UK Children's Charities' Coalition on Internet Safety. It was encouraging to see how the commercial sector is collaborating and supporting organisations such as GamCare and eCOGRA to help deliver a fair and safe gaming environment and also to help support vulnerable gamblers. I also interviewed Christel Schaldemose MEP, who has been actively involved in driving the political debate around consumer protection in the European Parliament and who authored last year’s report on the integrity of online gaming.

It was very enlightening talking to such a diverse and expert range of stakeholders and I learned a lot from the experience. As you could imagine, such a diverse range of people did at times take differing viewpoints on some issues. However whilst people had differing views on the best approaches, what was clear to me was that everyone was focused on trying to build a sustainable online gambling industry. I hope you enjoy the paper!

How effective is Self-Exclusion? The story of Joyce May Ross

I’ve been speaking to a number of stakeholders within the industry in the past few weeks about player protection. What I’m hearing is that one of the reasons why the levels of problem gambling has remained consistently low is due to operators offering players the appropriate tools to help them to manage their play, such as self-exclusions and limits. Many stated that these features have proved very effective.

This weekend I read about Joyce May Ross, who is suing B.C. Lottery Corp for $331,000 for failing to stop her gambling after she asked them to through the corporation’s self-exclusion programme. So whose fault was it that she lost so much money? Do lotteries need to do more to help gamblers such as Joyce? And are they the best placed to monitor gamblers?

For the online industry, one of the challenges to implementing effective player protection in the area of self-exclusion is how does one prevent a self-excluded player signing-up to a different operator? Adopting a pan-European approach would make sense, such as developing a common database where operators share relevant data, but implementing such an initiative could prove very challenging.

So back to Joyce May Ross. The question is will more lawsuits follow? You can read the article here.

The joys and perils of a near miss

There is a very interesting article in the Economist on the thrill of almost winning. We can analyse a player’s game play and make accurate assumptions about whether they are showing signs of problem gambling. But analysing their near misses takes this approach to the next level...