A Critical Analysis of Online Gambling Websites
Swansea Business School
Swansea Metropolitan University
Email: [email protected]
Swansea Business School
Swansea Metropolitan University
Email: [email protected]
01792 481118 (Direct Line)
01792 481132 (SBS Office)
Fax 01792 481127
Keywords: Internet gambling, problem gambling, gambling regulation
Paper presented at the 2008 EBEN-UK ANNUAL CONFERENCE, Cambridge
2 April 2008
Please do not quote without permission.
(10.03.08 CJ & SG)
Gambling online is growing exponentially, without the protection of reliable regulatory structures that ensure age and identity verification, the integrity/fairness of the games, or that responsible gaming features are included on a site. In a poorly regulated Internet environment, this study investigates gambling on twenty online sites. Content analysis was utilised to evaluate whether the sample displayed responsible gambling features. In the absence of established, agreed, regulatory evaluation criteria, the researchers constructed their own, based on examples of good practice on available websites and following the recommendations of the Gambling Review Report 2001 and the Gambling Act 2005.
The primary findings suggest that most online gambling sites are responsible and most show elements of good practice, which is of interest given the unregulated environment and absence of policing. While some features are derived from conventional gambling policies and regulatory influences, some are unique to the special ethical risks of gambling on line. Web designers and commissioning organisations appear to have anticipated social criticisms by incorporating guards against unethical outcomes before regulatory controls have been imposed. As the impossibility of regulating/controlling the Internet is a common cliché in many commentators’ analysis, this self regulation and willingness to refrain from taking revenue from vulnerable punters, is intriguing.
The authors recommend further research to establish an accurate picture, including the size and characteristics of the UK online gambling market. Secondly, to study and compare online gambling with more traditional forms of gambling in terms of underage and problem gambling. More studies need to investigate which forms of responsible gambling are most effective in reducing underage and problem gambling. Lastly, the response of the industry to legislation and micro regulation would be a guide for policy makers and responsible industry practitioners.
Since the increased popularity of Internet access into homes and workplaces in the early nineties, Internet gambling opportunities have expanded at a surprisingly swift pace and more people are gambling online (Wood, Williams and Lawton, 2007).The unregulated nature and uncontrollability of the Internet, with low or no tax gambling, have created a perfect environment for the proliferation of gambling (Crist and Yeager, 1998). Anyone, anytime, anywhere with a computer, a connection, and a credit card can gamble at hundreds of different online gambling websites. Recent statistics state there are as many as 2,500 gambling websites currently operating; consisting of 1,083 online casinos, 592 sports and race-books, 532 poker rooms, 224 online bingo sites, 49 skill game sites, 30 betting exchanges, 25 lottery sites and 17 backgammon sites (Casino City, 2006). Gamcare (2008) state that the number of Internet gambling websites is approximately 3,000. By 12 September 2007, the Gambling Commission had received only 146 applications for operating licences that include provision for online gambling, a minute proportion of the 2,500 sites worldwide. Internet gambling revenues in a single year were $651 million in 1998, more than double the estimated $300 million from 1997 (Sinclair,1999). Further, the global Internet gambling industry is forecast to grow from about $9,000 million in 2004 to $25,000 million in 2010 (European Commission, 2006). If the estimated figures are accurate, then the importance of Internet gambling will continue to rise.
Gambling presents a large set of negative social consequences and online gambling has its own challenges beyond those of gambling in general; introducing many new potential problems and rekindling many old ones (Griffiths,1999). Internet and land based casinos have problems detecting and deterring addicted gamblers. Even with the opportunity presented to physically verify age in conventional gambling outlets, no gambling jurisdiction is 100% effective in keeping out underage gambling (Gambling Online Magazine, 2004). It is feared that the anonymity offered by the Internet will exacerbate this problem.
Computer-based systems allow gamblers to self-exclude or establish loss limits and may stand a better chance of being effective than the current systems in most conventional casinos. Whilst a determined gambler can move from site to site, reports of players’ activities can be made readily available with contact details for bodies that aim to assist those with problem gambling issues. However, offline and online operators other than those regulated in the UK, do not collect information about a customer’s financial situation, spending or habits, for both practical and protection of privacy reasons.
A person who has developed a problem must identify it themselves and take their own constructive steps to deal with it. Operators only train staff to help those who believe they have a problem and approach customer services. Presently there is no comprehensive research or definitive standard as to how to identify someone who has developed a gambling problem. The prevailing view is that it is the minority of players who develop gambling problems. The current regulatory response to this issue is influenced by this perspective (EGBA, 2007).
The Growth of Internet Gambling
Several factors have contributed to the growth of online gambling.
• Internet access has increased globally and technologies that drive the Internet have improved. Confidence in conducting financial transactions online has increased and some governments have licensed online operators within their borders.
• The personal computer extends the range of choice. Land-based casinos dictate which games are available to players. Online gambling lets players move through cyberspace to play the games they prefer.
• The Internet provides the highest level of anonymity for conducting gambling. The more pervasive concern has been that the Internet attracts people away from person-to-person contact, fostering alienation and real-world disconnection (Boase, 2006).
• The costs of establishing online sites are considerably less than those of land-based gambling operations. Flatt (1998) has estimated as little as $135,000.
The ability to gamble anonymously provides problem gamblers with a safe haven without physical scrutiny or surveillance (Scharf and Corrin, 2002). Problem gambling is categorised as an addiction. A severe disorder characterised by obsessive thoughts of gambling, a loss of control, often involving lying and stealing in order to recover gambling losses. As well as other negative consequences (Netemeyer,1998). Specific to Internet Gambling is the role that technology contributes to alteration in gambling habits (Griffiths, 1999). There are no regulated opening times, as exercised by terrestrial operations. It has been argued that there is an ‘exodus from reality’, in the sense that gambling online does not involve ‘real cash’. A gambler may lose control as he or she cannot see a money balance and does not suffer a physical loss. Online gambling loses the social aspect of gambling creating the disadvantage that there are no friends or peers to discourage a gambler from going too far (Griffiths, 1999).
There is a high priority of protecting children from online gambling, considered more addictive than conventional forms of gambling, because of young people’s familiarity with and access to computer-based technologies (Conway and Koehler, 2000). They have a perception of control resulting from their skills honed playing PlayStation or interactive video games, and may have a false sense of security boosted by their fluency (Mackay, 2004).
Another concern is that underage gamblers have easy access to sites and to forms of gambling, from which they otherwise would be excluded by conventional outlets. Many sites offer a ‘demo’ mode, i.e. play without wagering money. It is suspected that ‘demo’ games may give very good odds. Adolescents who are successful on these games could develop a habit which continues when they reach adulthood and are legally permitted to gamble for money, when the odds are no longer so favourable (Mackay, 2004).
Gambling in its various forms is often seen as a deeply-rooted trait of the human activity, which although a source of gratification for many and not innately immoral, can cause harm to individuals. Gambling has long been subject to regulation by governments, reflecting moral, religious and political mores. A pragmatic motivation for such regulation is to generate revenue, which might result in a conflict of interest in regulatory regimes, as the industry grows. The objective of regulation can vary from protecting consumers by ensuring the probity and integrity of the gambling operators and the purging of fraud and abuse of criminal activities, such as money laundering, to reduction of the social cost of problem gambling. There is a gap in the literature concerning the efficacy of regulation. Regulation of online gambling is a comparatively new phenomenon and it is too early to measure its effectiveness. There are debates about appropriate licensing frameworks, legal and technical standards for operators and cover issues, such as protection of customer funds, continuous and repetitive play and intervention to tackle problem gambling.
Content analysis, adopted for this study, has been defined as a systematic, replicable technique for compressing many words of text into fewer content categories based on explicit rules of coding (Krippendorff, 1980). Content analysis has four key advantages:
• it is unobtrusive
• it is flexible and applicable to unstructured materials • it is context sensitive
• it can be applied to large amounts of data.
The lack of research applying content analysis to websites is partially a result of the complexity of Internet information, in particular; the definition of a website, the unit of analysis and the method of sampling.
A major problem in conducting Internet content analysis is related to defining the term ‘website.’ With a large volume of information on a websit...