The Adelson Case

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Internet Freedom Includes Internet Poker

The CEO of Las Vegas Sands Corporation, Sheldon Adelson, has launched an incredible attack on the freedom of people to play poker on the Internet. Somehow, Adelson supports real-money play in casinos he owns but not real-money play on the Internet.

On the Internet, we can play when we want to and at far lower stakes than are available in the casinos. On the Internet, we do not need to travel and we do not need to pay tips. Those of us with health and disability issues can pursue our hobby on the Internet in a way that casinos cannot match. Crucially, we can choose to play poker for cents, not dollars, on the Internet. Those of us who care for others can pursue our hobby (or in some cases our profession) whilst still being able to care for our elderly relatives, sick partners and yes, our children.

For those of us who are professional poker players, we can support our families via Internet poker far more easily online as we do not have the travel, food and other expenses that the casino industry imposes. And online we pay far lower charges (rake) than in casinos.

The Adelson campaign to limit our freedom is not about protecting people, it is about protecting the income of the casino moguls!

Why our freedom does not increase problem gambling

There are two main academic theories about problem gambling.

The first and most common hypothesis is that if people have greater access to gambling there will be more problem gambling. This is the “access” hypothesis.

The second is that people adapt to the availability of gambling. Whilst gambling may initially increase and problem gambling may initially rise, it then declines or plateaus as people adapt.This is the “adaption” hypothesis.

The “access” theory is a common sense approach. Many people believe it, but the evidence for it just does not stack up. The second theory is more complex, but the evidence does seem to support it. People adapt to gambling access surprisingly well.

There is another common sense theory. The “degen gonna degen” theory. That is, those with gambling problems – degenerate or “degen” gamblers – will actively seek out gambling opportunities regardless of barriers placed in their path. They bet privately, with illegal bookmakers or in illegal premises. They still bet but they do so at greater risk because they are gambling with criminal operations.

The US has a long history of banning gambling with the result that problem gamblers dealt with the mafia, not with respectable operators who would not proffer excess credit or break bones. Regulation means that operators can be required to help problem gamblers, not threaten them or fix baseball series to cheat them.

This “degen” theory helps explain why increased access for recreational gamblers and poker professionals does not increase the rate of problem gambling. Those with a problem are able to damage or destroy themselves already; the increased access does not change this.

How Internet betting can be safer than in casinos

Internet sites can and do offer some features that better protect gamblers.

You can set your own absolute limits before you gamble:

Deposit limit – say $100 per month and the site will not take further deposits. Time limit – say 3 hours in 24, or 20 in a week. Stop loss – say $100 in past day/week. The sites can stop gambling beyond these pre-set limits. You can’t get that protection when you walk into a casino.

Sites can also put in automated popups to remind players. For example:

You have been playing for 2 hours. Is it time for a break? You have lost 25% of your account balance. Is it time for a break? You have lost $100 this session. Is it time for a break? You have won 25% of your account balance this session. Is it time to quit while you are ahead?

Can you imagine the casino operator having staff tell you this stuff whilst you gamble at their tables? No it does not happen, some of it is not even possible. But it is possible online and can be mandated by proper regulation.

Helping problem gamblers

It is not just pop-ups and self-set limits that can help problem gamblers. Online, the betting record for the player is known. If a player’s behaviour shows signs of problem gambling, like chasing losses or escalating stakes for the same excitement, this can be detected quite easily. Advice and help can be offered pro-actively and automatically by the site.

This offer of help with details of those that can help, targeted at the players at risk, can be done automatically and reliably. Casino advice is far more limited: It depends on staff being attentive and intervening. And it depends on the casino mogul insisting that the staff seek out problem gamblers to help them.

UK Case Study – Proof that Adelson is wrong

The UK has seen the introduction of legal regulated online gambling via PCs and mobile phones. All forms of casino gambling are widely available and they are advertised extensively on TV, on billboards, online and in the press. British late night TV channels even have rolling programmes that consist solely of broadcasts of roulette that people can gamble upon online or by phone.

Sponsorship of Premier League football teams, including shirt sponsorship, is commonplace, with a number of different remote gambling operators sponsoring different Premiership teams. Adverts around the pitch routinely include online gambling advertisements, including poker site adverts. Half-time adverts for in-game online betting are so common that they are regularly spoofed in satirical TV programmes.

We also have some 9,000 high-street bookmakers which offer gambling to anyone over 18 who has not self-excluded. In those betting offices some 33,000 Fixed Odds Betting Terminals (FOBTs), offering slot games with maximum stakes of £2 and prizes of £500, as well as casino games with a maximum £100 stake and £500 win. People can gamble on the UK high street as well as online, and there has been a big increase in casino gaming in such premises.

The UK is an example of all that Sheldon Adelson and Sands Corporation oppose:

Simply put, the expansion of gambling to the internet is a societal train wreck waiting to happen. … Internet gambling literally makes it possible for bets to be placed by anyone at any time. When gambling is literally available in every bedroom, every dorm room and every office space, there is no way to fully determine who is actually making the bet at-hand, and whether that bet is being made in a rational and consensual manner.

Well, in the UK we have all this. In the UK we can bet from anywhere, at any time and we have been able to do so for years. Indeed, advertisers spend millions each year to encourage us to choose their site. We have been able to do this for over a decade so this means we have a test case of Sheldon’s “train wreck”.

In the UK, age verification and self-exclusion policies are mandated. Sites need to know who their customers are and monitor them for potential problems or criminality.

UK Problem Gambling and the Internet Gambling Boom

Problem Gambling vs. Internet Gambling Problem Gambling vs. Internet Gambling

The UK is blessed with having some of the best research into gambling anywhere in the world, with the Gambling Prevalence Surveys which took place in 1999, 2007 and 2010. Sadly the coalition cancelled the 2013 survey as part of their fake burning red tape exercise in May 2010, but the same questions were included in the 2012 Health Surveys for England and Scotland.

Each of these surveys used two measures to assess problem gambling rates.The DSM-IV screen has been used in all of them, whilst the SOGS screen was used in 1999 but has been replaced with the PGSI measure since that first survey.

In 1999, both screens showed a problem gambling rate of 0.6% of the general population. In 2007, both screens again showed 0.6% as the rate. This period covers the rise of Internet gambling and the introduction of FOBTs. Problem gambling rates did not change at all during that period.

In 2010, there was a small rise with either 0.7% or 0.9% classified as problem gamblers. The first is not statistically significant and the second is at the margins of statistical significance. This small rise may have been a statistical fluctuation or it may be that the economic crisis that hit between 2007 and 2010 means that more people were reporting that their gambling was causing them financial problems. With one million more adults unemployed and falling real wages between the (2007/10) survey dates, it is hardly surprising that there was a small rise.

In 2012 though, we find that in England the rate was either 0.4% or 0.5% and in Scotland it was back to 0.6%

Despite gambling being more available by phone, online and on high streets, this technological shift in how we bet between 1999 and 2012 has not seen a rise in numbers of people in crisis. Indeed, there is no detectable rise in problem gambling at all – despite much greater access and much greater advertising. Large sums are being spent on the new forms of gambling, £2.4bn ($4bn) in the UK online and another £1.5bn ($2.5bn) in the bookmakers machines but Problem Gambling has not risen.

That consumer choice is a threat to Adelson and Sands but it is not a threat to society.

Rest of the World – More evidence that access is not the problem

In 2006, the Scottish Executive commissioned an extensive review of all the available international and British research into the social impacts of gambling. This review is a little old now and it carries with it this important caveat:

“Understanding of the social impacts of gambling is limited by a serious lack of high quality research. Many studies have produced inconclusive or contradictory results, which can exacerbate the controversy that surrounds gambling with an evidence base that is often not able to resolve the most contentious issues.”

But it is a very thorough review of the available evidence.

For us, the most important research it examines are the longitudinal studies. That is research that is carried out or repeated over a period of several years to measure the effects of changes in gambling availability upon problem gambling. This is what the research shows:

4.59 The question of whether gambling availability actually causes increased problem gambling is one that requires longitudinal research to answer. Several longitudinal studies have examined these relationships, and these have tended to produce some unexpected results.

4.61 In New Zealand, longitudinal surveys have tracked patterns of gambling over seven years, and have found reduced rates of problem gambling, despite increases in availability.

4.64 Studies from Australia also appear to show decreases in problem gambling, despite increased in availability

4.69 In all of the studies considered above, gambling availability and expenditure has increased between surveys. However, what is notable is that, although the amount of individuals who gamble occasionally has increased, the proportion who report much heavier participation has reduced significantly (Abbott 2001; Volberg 2001). If the percentage of the overall population who gambles heavily on high-risk types of games – i.e. the group most likely to be problem players – actually decreases while overall expenditure rises, then it could be expected that problem gambling prevalence would level out or even reduce.

US – Gambling access does not mean more problem gamblers

http://www.scotland.gov.uk/Resource/Doc/143770/0036514.pdf

4.68 A comprehensive review of fifteen longitudinal North American studies reported that seven showed an increase in prevalence estimates over time, and eight showed lower ones (Abbott 2001). In most cases, particularly where the interval between surveys was three years or less, changes were small and generally not statistically significant. In four of the six studies where the gap was more than three years, increases were apparent, and for the remaining two studies, slight decreases were found. A similar variation in findings is evident for the small number of Australian state-level ‘replications’, although again methodological problems compromise straightforward interpretation of these studies (PC 1999).

4.69 In all of the studies considered above, gambling availability and expenditure has increased between surveys. However, what is notable is that, although the amount of individuals who gamble occasionally has increased, the proportion who report much heavier participation has reduced significantly (Abbott 2001; Volberg 2001). If the percentage of the overall population who gambles heavily on high-risk types of games – i.e. the group most likely to be problem players – actually decreases while overall expenditure rises, then it could be expected that problem gambling prevalence would level out or even reduce.

Sheldon Adelson and the Las Vegas Sands Corporation (LVS) are well aware of the US research that shows that there has been no rise in US problem gambling rates despite much wider availability of lotteries, slots and casino gaming.

We know this because of the information put out by the American Gaming Association which references respected US research papers. LVS is a fully paid up member of the AGA and Michael Leven, LVS President and COO, is a member of the AGA’s Board of Directors. This is the information LVS helps to publicise:

http://www.americangaming.org/industry-resources/research/fact-sheets/history-problem-gambling-prevalence-rates

Gambling opponents frequently claim that casinos — and casino games such as slot machines — create gambling addiction. But one simple fact — illustrated in this chart and based on independent, peer-reviewed scientific research performed over the past four decades — belies these claims: Despite the fact that the number of states with commercial casinos has increased ten-fold during the past 20 years, the prevalence rate of pathological and problem gambling in the U.S. is roughly the same today as it was 30 years ago.

The chart below compares the growth of commercial casino gaming from 1976 through 2008* with pathological and problem gambling prevalence rates during that same time.

If casinos and slot machines cause increased gambling addiction, we would see a corresponding increase in gambling problems with the expansion of casino gambling across the country. The research speaks for itself: Casinos and slot machines have proliferated over time, but gambling addiction has not.

Percent of US Problem Gamblers
*This chart reflects data through 2008 since it is the year of the most recent national prevalence study of pathological and problem gambling. Source: http://www.americangaming.org/industry-resources/research/fact-sheets/history-problem-gambling-prevalence-rates

Well, Sheldon Adelson, LVS and Michael Leven – we don’t find your case compelling. Increased availability of gambling has been proven NOT to be a “societal trainwreck” at all. This has been true in the US and is true in the UK. There is nothing different about Internet gambling that supports your position – increased availability does not increase problem gambling.

More help for problem gamblers

The research findings seem to show that problem gambling can be reduced with relatively small investments in help for problem gamblers, combined with a requirement on operators to provide contact details and support to problem gamblers:

http://www.scotland.gov.uk/Resource/Doc/143770/0036514.pdf

4.70 In this context, a recent study of four states is particularly interesting (Volberg 2006). In all the four states – Montana, North Dakota, Oregon and Washington State – substantial amounts of legal gambling existed at the time of the first (baseline) survey and increased further by the second (replication).

4.71 All four states introduced new casinos – two each in Montana and Oregon, five in North Dakota and ten in Washington State. In addition to opening this large number of new casinos, Washington State also allowed commercial ‘card rooms’ to greatly increase their maximum number of tables. Two states – Montana and Oregon – permitted electronic gaming machines to operate, although the density of machines was much greater in Montana than in Oregon. North Dakota was the only state without a lottery but had over 300 small charitable gambling operations in bars and restaurants.

4.72 Findings were unexpected. Casino gambling increased substantially, as would be expected from the dramatic increase in availability. Overall participation dropped however – probably as a consequence of casino gambling displacing other types. However, trends in changes in problem gambling were uneven: they increased in Montana and North Dakota and decreased in Oregon and Washington State. More severe cases of problem gambling changed most dramatically, with substantial and statistically significant decreases in Oregon and Washington State and substantial and statistically significant increases in Montana and North Dakota.

4.73 This is particularly surprising since Washington State, in particular, introduced large numbers of new casinos. The author concluded that ‘these data suggest that something more than gambling availability and participation can affect the prevalence of problem and pathological gambling’ (Volberg 2006). Looked at more closely, that factor appears to be the presence or absence of services to treat problem gambling. While Oregon spent around $2 million per year on services and Washington State around £150,000, Montana and North Dakota spent virtually nothing.

4.74 Overall, the results clearly demonstrated that problem gambling prevalence declined in the states with services and increased in the states without them. This indicates that availability is not the only factor at play in determining changes in rates of problem gambling, and that appropriate service provision can also be a crucial factor here.

4.75 Reports of declines in problem gambling, despite the introduction of new forms of gambling such as casinos, in the New Zealand and Australian studies mentioned earlier are consistent with the findings of this U.S. study. In New Zealand, between the 1991 and 1999 surveys, a national gambling problem helpline and extensive network of specialist counselling and treatment services was established. There was also a high level of publicity about the risks associated with excessive gambling and problem gambling.

4.76 In Australia too, as gambling availability and participation increased, many states and territories developed services to deal with problem gambling between the 1991 ‘four cities’ study and 1998 national survey. It is likely that the expansion of such services has had some impact on overall rates of problem gambling in these jurisdictions. However, while this may be the case, as ever, it should be cautioned that further research is required to determine the impact of service provision and other factors on problem gambling prevalence.

With the introduction of regulated online gambling to the US, there is a fantastic opportunity to ensure that online operators are required to offer help, advice and self-exclusion for problem gamblers. More problem gamblers can be contacted and helped. In addition, the potential significant tax revenues that are expected from online gambling can provide for far better advice, counselling and ongoing support for problem gamblers from specialists in addiction therapy. The provision of help from a tiny fraction of the expected tax revenues can and should reduce the social problems of ALL problem gambling.

The real moral position is to help the existing problem gamblers by using new revenues from Internet gambling to reduce problem gambling and its impact upon individuals, families and society.

Richas Richas (@RichasAA)

I am a UK recreational poker player with an interest in gambling legislation and regulation born from the UIGEA fiasco.

I studied Politics and Economics at university but monitoring the political developments in the US, UK, EU and WTO over the past two decades has taught me far more about the realities of lawmaking, lobbying and the often dirty tricks of various interest groups than my lecturers could.


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