Gambling

Written evidence submitted by GamCare (GA 23)

Summary

1. Our paper reviews the nature and extent of problem gambling and the factors likely to influence the gambling environment. We identify what we see as the priorities for a coherent strategy and programme to protect vulnerable people from gambling harm and assess how well these priorities are being delivered. We recommend that the Committee should pay particular regard to the effectiveness of the mechanisms put in place in 2008/9 for raising and distributing industry funding for research, education, prevention and treatment. We also recommend that the Committee should explore the issues around the number, location and accessibility of high stake/high prize machines, and support the adoption of GamCare certification by gambling operators, particularly those online sites operating from other jurisdictions, as a significant contribution to consumer protection.

Introduction

2. GamCare is the pre-eminent national responsible gambling charity in Great Britain. Founded in 1997, the GamCare helpline receives nearly 1000 calls per week with 85% of clients rating the service as "very good" or "excellent". GamCare counsel ling services helped more than  2,600 clients in 2010/11. Around two thirds of the problem gamblers we help no longer score as problem gamblers at the end of treatment.  We advise, train and support the industry, regulators and others on prevention, player protection and responsible gambling. We are largely funded through voluntary contributions from the gambling industry collected by the GREaT Foundation and distributed by the Responsible Gambling Fund, which we supplement with other donations, grants and trading income.  GamCare receives no government funding. For more information on GamCare’s work visit http://www.gamcare.org.uk/pages/faqs.html

3. GamCare is not anti-gambling. We recognise that for many people gambling is an enjoyable leisure activity, and that most gamblers suffer no ill effects from it. Our main concern is the protection of vulnerable people, including children and young people, from the adverse effects of gambling, through education, prevention, treatment and relevant research. Our submission concentrates on these issues, though we also comment on other aspects of the Committee’s inquiry, particularly where they touch upon our main objectives.

The nature of problem gambling

4. Gambling becomes a problem for individuals when it ceases to be enjoyable and becomes a necessity. Winning is no longer pleasurable. The money gained is immediately reinvested in gambling. The life of a problem gambler revolves around gambling. They are constantly preoccupied with the next bet, the next game, to the exclusion of relationships, family, job and other things in their lives. They often report that they have stopped caring about themselves, their personal hygiene, appearance and health.

5. Gambling performs a multitude of functions in their lives. It is a way of managing intolerable feelings – sadness, frustration, lack of self-esteem. It gives the person a temporary sense of control and power when otherwise they feel helpless facing life’s problems. It may also be a form of self-harm, with losses representing the punishment for being "worthless", "a bad person". It is a way of saying something for which they can not find words.

6. There are certain features which are relatively common in the life-styles of the problem gamblers with whom we work – for example the necessity for secrecy and deception, the presentation of a false self. This means that many problem gamblers are able to hold down a job, can seem to be in control of their lives and so may give the appearance of functioning effectively (unlike many people with an alcohol or drug problem, who are much more clearly "non-functioning"). In most cases it means spending more money then can be afforded. But not every problem gambler has financial problems, and debt is not a factor for every client.

7. Gamblers tend to manage their lives the way they gamble, by following their impulses. When the façade of control breaks down, it often cracks completely. This means that when problem gamblers ask for help, they are often in a state of real crisis, and helping agencies must be able to provide immediate emotional as well as practical support. A number of our callers and clients have considered or attempted suicide and this suicidal tendency is directly linked to their gambling problem. After a huge loss the financial breakdown and the impact on family and relationships as well as on the individual often leads to feelings of hopelessness where suicide seems to be the only way out.

8. Although gambling can be a form of physiological dependence, insofar as gambling provides excitement and produces a "high" in the form of adrenalin, serotonin and endorphin rushes, there are marked differences from alcohol and substance addiction. In terms of treatment there is no need for detoxification prior to therapy and also no need for medication to substitute the substance.

9. Many problem gamblers have experienced some form of trauma, abuse or loss in their past, leaving them with a deficiency in expressing and containing their feelings. By the time they seek help this group has usually been gambling for many years, starting from an early age; they may have had a significant figure in their life who gambled (parent, grandparent, uncle) or conversely have had a parent whose injunctions were all about saving money and being risk averse.

10. Many gamblers are co-morbid. This might range from anxiety and depression through alcohol or substance addiction to diagnosed mental health issues. They may also be receiving (or should be receiving) treatment or support from other agencies, the criminal justice system, social services or the NHS. This therefore requires close liaison between all the agencies to ensure effective and coordinated interventions.

The extent of problem gambling

11. The latest evidence from the 2011 British Gambling Prevalence Survey showed that:

§ 73% of the adult population (c35.5 million) had gambled within the past year (cf 68% in 2007)

§ Problem gambling prevalence using a measure that was statistically significant was higher in 2010 (0.9%) than in 2007 and 1999 (0.6% for both years). This equates to around 450,000 adults aged 16 and over in Britain

§ Problem gambling is more prevalent among men and younger age groups; and significantly associated with being of Asian/Asian British or Black/Black British origin.

§ Problem gambling prevalence rates observed in Great Britain were similar to rates observed in other European countries, notably Germany (0.6%), Norway (0.8%) and Switzerland (0.8%); lower than countries like the USA (3.5%), South Africa (1.4%)and Hong Kong (5.3%); and higher than Sweden (0.3%), Canada (0.5%) and New Zealand (0.4%).

12. The Survey is a snapshot at a particular moment – problem gambling is dynamic, with people moving in and out all the time. Most problem gamblers participate in several types of gambling. Problem gambling affects partners, families and friends – if every gambler has an impact on just 4 others (a conservative estimate) that means over 1.8 million people are affected. The Survey also found that a further 1.8% of the population – over 900,000 people - were at "moderate risk" of becoming problem gamblers, and 5.5% - over 2.7 million people - displayed some risk factors.

13. The Prevalence Survey does not collect data on some specific groups - eg prisoners, students, the homeless - who are at significant risk in respect of gambling. Some estimates suggest that the prevalence of problem gambling amongst prison populations may be as high as 10%, with another 17% at high or medium risk. Students are particularly vulnerable: away from home and perhaps managing money for the first time, immediately in debt through the loan system and so under pressure to find income, and very possibly encountering peers who gamble successfully (because they have developed the necessary skills for certain activities) yet poorly informed themselves about the risks.

14. The Prevalence Survey also excludes data on gambling amongst under-16s. The most recent source of information on this group comes from a 2009 IPSOS Mori survey which found that 2% (c60,000) 12-15 year olds were problem gamblers; whilst a reduction from previous surveys, this is still a higher prevalence rate than for adults

15. There has been no research in Great Britain specifically designed to estimate the costs of gambling-related harm to society and the economy. We have assessed the costs of problem gambling to the economy at £3.6 billion per annum, based on an estimated average annual social cost per problem gambler to society of c£8000 pa (Grinols & Mustard, 2001) [1] and using the 2011 prevalence figure of 450,000. This compares with an estimated annual cost of £15 billion for problem drug use [2] and £9 billion for drink-related costs to the NHS and associated anti-social behaviour. [3]

16. At present, using assessments at the beginning and end of treatment, our latest figures show that of the gamblers we treat, c90% are classifiable as problem gamblers at the start of treatment and this reduces to c30% at the end of treatment – a two-thirds success rate. In 2010/11 we anticipate spending c£1.75 million in total on helping c2650 clients - c£660 per client. 95% - 2520 – are likely to be gamblers, and 90% of these - 2270 – problem gamblers. If two thirds (1520) of these are no longer problem gamblers at the end of treatment, the annual saving to society is £12 million (1520 x £8k), representing a cost: benefit ratio of 7:1. This compares with a cost: benefit ratio of just 2.5:1 for the treatment of problem drug users, where the mean cost of treatment is £4900 for a mean benefit of £12,000 (NAO, 2010).

Research, education, prevention and treatment (REPT)

17. The Government’s policy on REPT, predating the 2005 Act, has effectively been based on the "polluter pays" principle, i.e. that the gambling industry should fund research into and measures to prevent and address gambling-related harm. Operators licensed by the Gambling Commission (which excludes those operating from other jurisdictions) are required to have and put into effect policies and procedures to promote socially responsible gambling, and to demonstrate that they are contributing to REPT. The Act makes provision for the introduction of a statutory levy on operators licensed by the Gambling Commission, but both before the Act and after it, following a review by the Commission and DCMS in 2008/9, this policy has been pursued through a voluntary arrangement with the industry to raise and distribute funds. We return to the effectiveness of arrangements for this below.

18. Industry funding rose from just over £2m in 2005/6 to £3.5m in 2008/9 and is now running at £5m per annum. It is raised by the GREaT Foundation which provides the collective funding mechanism for the industry. Historically, industry funds have been focused on treatment, largely through GamCare to provide a national helpline and counselling (£2.5 million in 2010/11). Funds have also been used to provide residential treatment through Gordon Moody Association and to support treatment provided by the NHS through the National Problem Gambling Clinic in London. Very little has been spent on prevention and education. The remainder has been invested in research.

19. GamCare has worked closely with the industry throughout this period to create a coherent and effective infrastructure to deliver the national helpline and treatment. Counselling is now available in c70% of Great Britain, through a network of charitable partners commissioned and managed by GamCare, as well as online. We have welcomed the increased, voluntary funding commitment from the industry in the last two years and believe it represents a real commitment across the majority of industry operators to player protection and social responsibility. This is reinforced by our work with individual operators on the development of their social responsibility policies and procedures, the training of their staff and the certification of their operations, providing an important kitemark for consumers; we provide all of these services on a cost-recovery basis, and so they represent an industry investment over and above their voluntary contributions to GREaT.

Factors affecting the gambling environment

20. It is clear that in recent years awareness of gambling opportunities has become much more prevalent and gambling products much more accessible, due in particular to:

· the growth in advertising, sponsorship and media endorsement (facilitated by the Gambling Act)

· the expansion of gambling opportunities available in land-based premises

· the availability of gambling products via new channels: online, mobile technology, digital television etc

· the accelerating development of and innovation in gambling products by the industry, both land-based and online

· the increase in licensing of remote operators by other jurisdictions who target the UK market, facilitated by "white listing" arrangements under the Act.

21. At the same time, the growth of the National Lottery such that it might now be described almost as a "national institution" must also have contributed to a more general acceptance by society that gambling is a perfectly acceptable leisure pastime. We have no objection to this, but it is another factor that needs to be taken into account. Whilst playing the National Lottery on its own figures hardly at all as a factor amongst those contacting us for help, it would be useful to research whether there is any evidence that Lottery playing leads vulnerable people into other forms of gambling.

Priorities

22. In our view, all of these factors are likely to lead to an increasing number of people gambling, and so reinforce the need in the short term to ensure that adequate and effective support and treatment mechanisms are in place for those affected by gambling, and in the longer term to develop effective education and prevention measures. Our priorities for REPT are therefore to:

· Provide help and support for those in need by maintaining, expanding and developing the existing delivery infrastructure, and by continuing to innovate in the provision of treatment. In particular, we should seek to ensure that counselling is available in every part of the country by completing the network of partners we have been putting in place over the last few years;

· Encourage collaboration rather than competition between providers, and so ensure that very limited resources are used to best effect;

· Make sure that gamblers, non-gamblers, other helping agencies, GPs etc are much better informed about the risks of gambling and that help is available. A cost-free way to do this would be for the industry to agree to carry the Helpline phone number on their advertising

· Develop an effective education and prevention strategy, with a particular focus on young people, their teachers and parents to be able properly to assess the risks of gambling and so equip them to be able to gamble responsibly and enjoyably if they choose to do so;

· Focussing research, other than prevalence work, on establishing what works in respect of treatment, education and prevention, and feeding this back into policies and practice. This should encompass developing effective evaluation for existing provision and drawing on research in other jurisdictions.

How well are these priorities being delivered?

23. Very few – perhaps less than 1% [4] - of those who might benefit from treatment actually receive it. Problem gambling is widely referred to as ‘the hidden addiction’ since it shows few or no outward signs. Based on our experience over the years, we know that a wider public education campaign would significantly increase the numbers of people coming forward for help. GamCare restricts promotion of its services in line with funding available for treatment. In an ideal world, there would be more funds available. It is therefore vital that all the funding that is available is used to best effect, on the frontline.

24. We have therefore welcomed the increase in funding being provided by the industry since 2005. It is likely that this was influenced by the licensing requirements of the 2005 Act, though we note that funding was increasing anyway before it was implemented. Although, arguably, the DCMS’s levy consultation in 2008/9 gave further impetus to the industry’s fundraising, we remain convinced that a voluntary system is preferable to a statutory one, and hope that an effective voluntary system can be made to work.

25. Unfortunately, we have found the mechanisms which were put in place in 2008/9 for determining priorities for REPT and distributing funds to be less satisfactory, and we know these concerns are shared by other service providers and by many in the industry – so much so that GREaT’s fundraising is being severely constrained by question marks over the effectiveness of strategy-making and distribution.

26. The Responsible Gambling Strategy Board (RGSB) was created at the end of 2008 by the Gambling Commission its purpose is to advise the Commission on a national strategy for REPT. The Responsible Gambling Fund (RGF), an independent charity, came into being in spring 2009; its purpose is to distribute the funds raised by GREaT to deliver the RGSB’s strategy. The Gambling Commission’s review (October 2008), which proposed the new structure, set out four key objectives for the new system:

· Separation of the three functions of fundraising, strategy and distribution

· An effective framework for developing a strategy and priorities

· Improved distribution delivering cost-effective and evaluated programmes

· Sustainable, three-year funding. [5]

27. It does not seem to us that any of these objectives has been fully realised:

· Whilst fundraising is now handled separately by GREaT, by dint of having the same Chair, CEO and executive, and with considerable overlap of Board members, there is not a clear separation between the RGSB and the RGF;

· Although the RGSB has published two strategy documents (October 2009 and October 2010), neither attempted an assessment of need either in respect of treatment or education and prevention, or provided evidence for, or cost/benefit analyses of, their recommendations;

· the RGF has yet to produce a forward plan or budget for its use of GREaT’s funds. To the external observer their approach has therefore been characterised by a number of incremental decisions which have left existing providers uncertain about their futures. Their strategy can only be inferred from their major funding decisions, which included making commitments to research and three new regional pilot projects (costing £1.6m) ahead of providing funding for existing treatment providers. Their approach to tendering has appeared inconsistent, with several new and significant opportunities not being opened up to competitive tendering. There is no clear data available on the overall costs of the new system;

· whilst three year funding has been made available for some new projects, existing treatment providers were only offered 18 month contracts from April 2011. The commissioning process has been extremely protracted such that at the time of writing GamCare still does not have agreed funding for 2011/12, either for the national HelpLine or treatment, and we have had to ask for provisional arrangements to be put in place to prevent insolvency.

28. All this has meant that the funding of research, three experimental, and costly, treatment pilots, and some other one-off projects have apparently been prioritised above the delivery and expansion of existing treatment services, including the helpline. We and other treatment providers have been unable to plan properly even to maintain existing services, let alone to expand them, and at present our planning is month by month rather than on the three year basis envisaged. There has been very little progress on the development of an education and prevention strategy, despite the priority the Commission’s review recommended this be given. The costs of the new system are unclear, as are the benefits for the proposed beneficiaries: players, problem gamblers and their families. We recommend that the Committee should give these issues their particular attention.

Other issues

Casinos and machines

29. The casino issue dominated the passage of the 2005 Act, sadly characterised by much poorly-informed opinion. The social responsibility argument for the casino licences allowed under the 2005 Act, simply put, is that they are destination gambling and entertainment venues which can therefore be more easily managed and controlled – people make a specific decision to go there, probably plan an evening out around the trip and so can also plan their expenditure carefully as well. They are therefore, it is argued, potentially "safer" gambling venues than high-street gambling premises, which can provide players with spontaneous and therefore unplanned and so potentially riskier gambling opportunities. What is certainly true is that in recent years the opportunities for high-street gambling have increased, including the number and nature of products available. Whether faster development of large or small casinos would have affected this is debatable. We suggest that the Committee could usefully explore these issues and particularly the regulations governing the number, location and accessibility of high stake/high prize machines.

Off-shore online operators

30. It is very clear that the objective of the Act to bring on-line operators within the regulatory reach of the Gambling Commission was undermined from the outset by the Government’s tax decisions. The inevitable result is that the vast majority of on-line sites available to UK players are licensed overseas. Yet we suspect that players on these sites, if they consider these issues at all, might well assume that the sites are being regulated by the British regulator and so could be misled into believing there is a level of player protection available to them which is not actually present. We have found that more and more remote operators who are not licensed by the Gambling Commission are approaching us to certificate their sites. The GamCare brand and kitemark is becomingly increasingly well-known to players and so provides a considerable service to consumers. We would welcome the Committee’s support for the further development and adoption of this valuable aid to players, the costs of which are met by the operators themselves.

June 2011


[1] Grinols, Earl L. and David B. Mustard. 2001. “ Business and Social Profitability: Evaluating

[1] Industries with Externalities, The Case of the Casino Industry .” Managerial and Decision

[1] Economics , vol. 22: 143-162.

[2] “Tackling Problem Drug Use” Report by the Comptroller and Auditor General, NAO, March 2010

[3] “Alcohol misuse; how much does it cost?” Cabinet Office 2003

[4] Review of RET Final Report and Recommendations, para 7.28 Gambling Commission, Oct 2008

[5] Review of RET Final Report and Recommendations, para 1.11 Gambling Commission, Oct 2008

Prepared 29th July 2011