Thursday, August 18, 2022

Time for disruptive responsible gambling

Technology is changing the way that people gamble, in terms of their gambling experience, how they interact with operators in venues and online, and how gambling operators and regulators monitor and respond to customers. From a regulatory and corporate social responsibility perspective, it is important to clarify the risks associated with new technology, and how this can be used to minimize and prevent gambling-related harms.

The technological changes to gambling are too numerous to mention. Notable examples include virtual reality, augmented reality, betting on professional video games (esports), gambling with virtual items (skins), gambling using blockchain and cryptocurrencies, skilled video gambling machines, and of course social media as a marketing and communication platform.

There are many issues emerging, including whether new products are classified as gambling activities and should be regulated as such. An important concern is the potential target market for new products – are vulnerable populations, including young adults, children, and those with gambling problems, likely to increase gambling as a result of a new product? Will people who would not otherwise gamble now enter the market and potentially migrate to other gambling activities?

Do features of new gambling products pose specific risks of harm? This is one of the most difficult to answer as gambling products are being developed so rapidly that there is generally little research on the potential impact of these. However, conceptual models and existing research suggests that some concerns may be warranted. Virtual reality is a highly immersive experience that is likely to cause dissociation, including losing track of time, suspension of reality, and spending more money than intended.

Already gamblers report that digital currency leads to excessive expenditure due to a lack of salience of the money being spent. Augmented reality and apps involves smartphones and often track location and access personal information to offer a customized experience. This may allow gambling operators to have unprecedented information about customers which could be used to encourage ongoing gambling.

Video gambling machines incorporate a skill element into a chance-based gaming machine; however, the extent to which consumers understand the varying role of skill and the impact it may have on outcomes is unclear. It is possible that VGMs may encourage illusions of control and excessive gambling in the hopes of ‘beating’ a machine that is still largely chance determined.

Disruptive innovation is an often misused buzzword. The Harvard Business Review describes disruptive innovation as a process in which a new company/product meets needs of a neglected market segment and introduces a completely different business model to this population. Responsible gambling is another jargon term that is poorly defined with varying agreed-upon meaning within the gambling field, including among academics, industry, regulators, and consumers. Although semantically it should mean gambling within appropriate limits of time and money, it has become synonymous with avoiding or addressing problem gambling.

Gambling is one of the most heavily regulated industries in the world. However, there is very little empirical evidence to support the effectiveness of most policies and practices designed to minimize harms. Efforts have typically focused on the small proportion of gamblers who experience significant harms, and largely ignore, or are ignored, by the vast majority of consumers, including those at risk of experiencing lower levels of gambling-related problems. There is growing recognition of the need to disrupt harm-minimization efforts and focus on preventing gambling problems. Providing tools and resources for all gamblers can assist in setting appropriate limits and staying within these so that gambling remains an enjoyable and affordable entertainment activity.

Technological developments have the potential to transform the gambling experience in terms of reducing the risk of harm. Increased access to customer data allows operators to customize warning and notification messages to be more relevant for consumers and enhance their impact. Facial recognition technology, Bluetooth, and other geolocation technology could be used to enhance the provision of self-exclusion programs, send nudges to those who have been gambling for a lengthy period, and encourage the use of non-gambling amenities.

Virtual reality casinos may include personal avatars to check in with customers and ensure that they are gambling within their means, in a private and totally customized manner. Educational materials teaching consumers how outcomes are determined and to counter common irrational beliefs may be gamified to encourage their use and enhance effectiveness. Treatment and interventions can be delivered online and incorporate augmented and virtual reality technology resolving issues related to location, appointment times, and needing a counsellor when self-directed options can be very useful.

The massive changes that are occurring in the gambling industry are exciting and potentially revolutionary. However, consumers are increasingly more savvy and aware of the importance of corporate social responsibility. Regulators are also more demanding of the gambling industry to demonstrate an active effort to address gambling-related harms. The gambling industry, researchers, and policy makers need to move away from focusing only on the small minority of those with severe gambling harms, and provide resources for the rest of gambling consumers so that they can enjoy these new technologies, with the appropriate levels of risk and reward.

*Dr. Sally Gainsbury

Deputy Director, Gambling Treatment and Research Clinic, The University of Sydney


Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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