Friday, September 14, 2007

Technological fixes address problem gambling

Joshua Gans has an interesting post on technological fixes for dealing with problem gamblers. Essentially Joshua advocates technology to enable gamblers to pre-commit to limiting the extent of their gambling per week. This limits the propensity to get involved in ‘within session’ gambling excesses – running off to use the ATM when you have exhausted your cash – and also, on reflection it helps deal with, ‘between session’ excesses – simply going to play the pokies too often.

A fascinating paper by the psychologist Mark Dickerson (thanks to reader Kymbos ) examines things from this perspective of achieving reasonable pre-commitments in gambling:

‘The marketing of gaming could … guarantee that players could purchase currently available forms of gaming and yet never over-spend. The gaming industry could choose to prioritise informed choice of all players, thereby echoing the value placed on this throughout the community. It could claim that all consumers were protected from excessive expenditure by the safeguards that were in place.

This could be achieved ‘tomorrow’ by the change to the use of player cards for all EGM play. Player cards would be issued on the usual 100 point ID requirements of other significant cash cards, accounts etc. Such cards can be made desirable to players depending on a variety of attractive loyalty and reward schemes.

The limits to the amounts of money and time that an individual could pre-commit to his/her card would be transparently computed along the same sort of lines by which mortgage and other credit/loan levels are currently established. There would be the opportunity for individuals to make a special case that they had greater levels of discretionary monies than the standard levels but such claims, would be open to verification. For the majority of players it is likely that their preferred expenditure would be well within the regulated limits.

The environment in which the player made these pre-purchase decisions would be the proper place in which to provide player warnings and information about the potential harmful impacts that can arise from gambling and the availability of professional help should harmful impacts arise. This setting could include a simulated EGM so that buyers could explore how long a particular level of staking might last on a particular machine and what were the probabilities of winning.

The venues would then need have no notices and warning labels on machines but return to the pre- “responsible gambling” days of being purely escape and fantasy, never a window or a clock in view. The player could go and play and ‘lose control’ within the previously set safety constraints.

There would be additional positive corollaries for the providers of gaming; by using a process of consumer protection for all players that guaranteed informed choice gaming could be advertised as ‘safe’, the industry would be seen to have set standards that transparently abided by a core social value and their status would rise accordingly, new products could be tested against the same standard before being legalized. Above all the industry would have a coherent approach derived from a social value and with the whole policy and process couched in their core language and expertise of business management and marketing.

If the marketing process ensured that only by criminal activity such as fraud could a player spend excessive and uncontrolled amounts of cash on gambling, then the industry takes charge of the agenda and can be proactive rather than reactive to each research finding about the harmful impacts of gambling etc.

If such consumer protection was demonstrated to significantly reduce the harmful impacts of gambling, the nexus between convenience availability of gaming, regularity of play and the higher risk of harmful impacts would have been loosened if not broken. Extending the regular player base and increasing the availability of gaming then may become socially acceptable options.

The above argument can be replicated for all forms of gambling (currently available and those in the future) that permit continuous sequences of stake, play and determination, whether casino table games or off-course betting (56% of regular bettors report “sometimes, often or always” “ I feel an uncontrollable urge to continue gambling once I have started.”).

There are a number of good reasons why all forms of gambling should be included in such a regulated, player card system of purchasing gambling: 1) it would at a stroke stop all under-age gambling; 2) some rare players have been known to develop harmful levels of gambling using only lottery type products; 3) some players gambling to their limit using EGMs etc might then reach harmful levels of expenditure purchasing unregulated quantities of lottery products and; 4) future gambling products may be developed that blurr the line between continuous forms and other current non-continuous forms such as the daily/weekly draw of a lottery.

The use of a player card would have almost no impact on the convenience of most people as they purchased gambling. Introduced with player points and bonus schemes as a loyalty card but with the added social impact of stopping the harmful impacts of gambling it could be a highly attractive option politically in jurisdictions wanting to maintain the taxation/revenue stream from gambling but aware of the growing community backlash against the levels of harm arising and the escalating costs of preventing and treating individuals and families adversely affected.

The argument makes logical sense and good business sense without any mention of problem gambling. In retrospect it may be seen that industry’s preoccupation with problem and pathological gambling has been one of reaction to the evidence, concepts and theories of psychology and psychiatry rather than proactive policy and strategy driven by sound business and marketing ethics and practice. The latter approach has been shown to result in a strong consumer protection approach which ‘at a stroke’ has the potential to prevent excessive consumption of gambling: i.e. to prevent problem gambling?

If the consumer protection approach is taken all jurisdictions where gambling is legalized can now choose to prevent problem gambling’.


conrad said...

I think the problem with these sorts of fixes is that they work least best for those with the worst problems. Many people addicted to thing will find some way or another of getting around the rules, and I don't see why gambling is any different in this case. It would therefore be interesting to see to what extent these types of strategies effect different parts of the gambling distribution.

THis why I think you might be barking up the wrong tree asking business to use sound business models (to whom?) that make logical sense etc. These models assume rationality, but at the addiction end of the spectrum, this is where you are least likely to find it.

hc said...

I agree that comnpulsive gamblers will seek ways around them

But I think a more serious objection is that the pubs, clubs, casinos, machine owners and machine producers will tell us lies that they are too costly, impractical etc.

I don't believe they are serious about restricting what they sell to responsible gambling - they would lose 40% of their business.

Kymbos said...

Conrad’s point is only as true for smart technology and pre-commitment as it is for every single problem gambling initiative in the regulatory tool-kit. In fact, Conrad's percieved weakness is one of pre-commitment's core strenghts – the system helps every gambler make better decisions, without singling out particular players as ‘problem gamblers’ with all the difficulties associated with their identification.

Furthermore, problem gamblers do not start as problem gamblers and then discover gambling. They start as recreational gamblers and get more heavily involved, eventually suffering significant harm from their gambling. Pre-commitment offers regular gamblers the enhanced opportunity to set boundaries on their gambling behaviour, preventing the development of problems.

In the trial of smart technology in Nova Scotia, voluntary use of ‘informed choice’ initiatives including pre-commitment were avoided by problem gamblers, but taken up happily by regular gamblers. If you want to break the nexus, helping regular gamblers prevent development of problems is a great place to do it.

Problem gamblers will try to circumvent the system, but with smart technology it will be much harder to do and there will be a system in place to help them help themselves when they allow themselves.

Consider the case of a problem gambler going to counselling: “Mr Smith, you are experiencing problems controlling your gambling. I see you have set your pre-commitment at $1,000,000 per day. What do you think the problem might be?”