The US sports betting market might be able to take some clues from a recent deep look into its forerunner in the United Kingdom.
A June headline on The Guardian website read, “Gambling Losses in Online Gaming Very Skewed to Deprived Areas-UK Study.” That is obviously an alarming lede, as one of the biggest concerns about gambling legalization is that it disproportionately takes advantage of lower-income individuals.
The article details a newly conducted report led by academics David Forrest and Ian McHale, as well as colleagues from National Centre for Social Research.
What’s in UK gambling study?
Amongst the key findings is that approximately 129,000 customers lost at least 2,000 pounds per year from an analysis of approximately 140,000 UK-based accounts. The story notes that it is perhaps more concerning because of the relatively limited size of the sample.
The story noted that of the relatively limited sample, 50,000 played the equivalent of eight full calendar days playing online slots; of note was that this group was predominantly female.
The 30-page report goes into tremendous detail about the patterns of play amongst UK online gamblers and appears to have raised calls for intervention, at least among politicians.
Background on the report
The report was commissioned by the UK-based GambleAware.Forrest and McHale are well-known academics who previously collaborated on a review of Sportradar’s Fraud Detection System.
The genesis for the project came about from the need to better understand online gambling behavior.
The report details that the key questions driving the study about patterns of play are as follows:
- What are the typical patterns of online gambling?
- Are there differences in patterns of play among different people?
- What differences in patterns of play are there across different products?
- What tendencies are associated with at-risk or problem gambling?
Methodology
The study took place in three phases:
- Phase one was a small series of interviews with online gamblers.
- The second phase was an analysis of 140,000 gambling accounts equally pulled from seven online gambling companies. The data is from the pre-pandemic period of July 1, 2018 to June 30, 2019.
- Finally, stage three involved follow-up surveys with the gamblers included in the previous stages.
The report details “great diversity” in what drew gamblers to online gaming. While some were reported to have wagered offline, many cited friends, family, and advertisements as drawing them to online activities.
Amongst the group interviewed, most gamblers participated in a single online gambling activity, whether it be sports betting, horse racing, poker, or casino games. A smaller group had a clear preference for one activity but participated in others as well.
Not partners?
One of the standout points of the report detailed that “[p]participants held largely negative views about gambling companies.” Study participants did have some suggestions for reducing harm, however:
- Restricting certain types of play;
- Limiting advertising around in-play wagers;
- Multi-operator self-exclusion;
- Hard stake limits, as self-imposed limits were deemed “weak.”
Looking at who is betting
A full 94% of industry revenue is derived from men. Sports betting is a contributing factor, but so too is more frequent wagering and betting higher amounts.
More than half of bettors and online gamblers are between 25-44 years old and they contribute more than half of all revenue. It is worth noting that those over 45 contribute a larger proportional spend, with those gamblers accounting for roughly 35% of industry revenue.
If betting on horse racing and football (soccer) are removed from the equation, betting on virtual sports was “particularly skewed towards the most deprived areas.”
Most people do not win
Mastering sports betting is hard. It has bred an industry of touts and pick sellers.
The UK-based report indicates that the top 1% of customers (based on betting volume) accounted for 36.4% of the operators’ total win. The top 10% account for 79.1%.
Among the group of bettors with the highest losses, the average age was 40 and they tended to have addresses in less well-off areas.
Slots are king
It should be no surprise to anyone who has been to a brick-and-mortar casino that the online world does not differ too much. Online slots account for 60% of all gaming spending in the report.
While sports betting (including horse racing) is more popular than online casino gambling amongst the population sample, online casino is where the money is made. Spending was higher in online casino gaming across all eight studied age groups.
Like sports bettors, 20% of customers are accounting for 90% of online casino revenue.
The rapidity of online slots was viewed as a risk factor associated with heavy losses.
Are checks on play working?
The most commonly used check on play was the use of deposit limits, which were set by more than 20% of people during the period of the study.
Other features like timeouts and applying for self-exclusion were used far less frequently.
The study found that during the measured period, just under 4% of consumers received a check-in, something required by the Social Responsibility Code in the UK, which requires operators to check on consumers who might be demonstrating certain harmful tendencies.
What might US sports betting market make of this?
The UK has long been cited as a place to look for where the US market is heading. The Patterns of Play report indicates there are definitely some areas of concern.
In the US, we know that there have already been a number of voices expressing concerns about the advertising blitzes, as well as some features now being integrated into gaming platforms.
The report precedes a white paper from the UK Gambling Commission, which is expected to discuss potential regulatory recommendations. The release date of the white paper is not known but is rumored to be coming out soon.
It is possible that any significant changes in the UK could eventually make their way to the US as well.
