iGaming and Consumer Protections: A Crucial Disconnect

Is there a need for greater consumer protection in sports betting?

A 2019 study* found that only a limited number of internet gamblers in Australia use the consumer protection tools available on gaming websites.

A common perception is that these tools are only for problem gamblers. Increased efforts are needed to promote the tools to more internet gamblers to keep gambling sustainable and affordable and avoid gambling harms.

Internet gambling is growing in popularity and is increasingly accepted as a form of mainstream entertainment. In Australia, the activity more than doubled between 2012 and 2018, with more than 34 percent of Australian adults placing bets online last year.

The main types of internet gambling are wagering and lottery, provided through domestically licensed sites; all other forms of online gambling are prohibited in Australia.

Internet gambling is convenient, with round-the-clock access to high-speed, private, uninterrupted play and online payment methods—all features that make it difficult for some gamblers to maintain control.

Reportedly, most internet gamblers set limits formally or informally, and use strategies to keep their gambling at affordable levels.

However, it’s all too easy for gamblers to lose track of time and money, putting them at risk for excessive gambling and subsequent harm.

Research shows that gamblers are increasingly seeking outside help for online gambling problems. Preventing these harms is a significant area of concern for researchers, gambling operators and policymakers.

 

Consumer Protection Tools

Most licensed internet gambling sites in Australia are required to provide consumer protection tools such as activity statements (where players can view their gambling expenditures), restrictive tools (self-imposed limits on gambling spend), and time-outs (the temporary suspension of access to accounts) to help customers gamble only what they can afford.

These tools, which require customers to opt in, are intended to help them maintain self-control and make rational, controlled decisions when gambling online.

 

Consumer Protection Tools

Activity Statements

Activity statements enable customers to track their gambling spend by showing their wins, losses, withdrawals, deposits and current balance. Gamblers have positive views towards receiving activity statements, and these are among the most popular of all consumer protection tools. They appear to be effective in reducing time and money spent gambling.

 

Deposit Limits

Voluntary deposit limits (a form of voluntary pre-commitment) enable customers to set personal limits on the amount of money deposited into their gambling account for a specified period (24-hour, weekly or monthly). These tools are generally positively viewed and show some effect on reduced spending, encouraging gamblers to reflect on the amount of time they spend gambling. Usage is low because operators do not promote the tool.

 

Time-out

Temporary time-outs (also known as “take a break,” or temporary self-exclusion) allow customers to suspend their gambling account for a specified period (generally less than six months, with daily and one-month self-exclusion options available). Time-out has been found to be a useful consumer protection tool. Usage is low, again, because operators do not promote the tool.

 

The Study

A survey of 564 Australians who use online sports wagering sites assessed the three consumer protection tools: activity statements, deposit limits and time-out. The study found that although many internet gamblers know about the tools and satisfaction with the tools is high, few gamblers use them.

The research team wanted to understand gamblers’ perceptions of the tools and the motivators and barriers to their use, to help policymakers and iGaming operators promote greater use of the tools. The study is highly important, as understanding the use of and attitudes toward consumer protection tools is necessary to design effective strategies for behavioral change.

 

Use of the Tools

The researchers found that the majority of participants (60.5 percent) were aware that all three tool types exist. Participants were more likely to be aware of activity statements (96.6 percent) compared to deposit limits (85.5 percent) and time-out tools (65.8 percent).

Usage rates also varied. Among those indicating awareness of the tools, 88.4 percent had used activity statements, less than a quarter had used deposit limits (24.5 percent), and only 8.1 percent had used time-out tools. Consumer protection tool users were, overall, satisfied with each tool.

In general, use of the tools was higher among younger customers, and restrictive tools (deposit limits and time-out) were predominantly used by those who reported problems with their gambling.

These findings suggest a need to improve engagement with the tools among a broader population of internet gamblers, and to change the perception that they’re relevant only to gamblers experiencing problems. The tools could be useful to all internet gamblers in proactively managing their gambling.

 

Consumer Protection and Problem Gambling

Of the gamblers surveyed, 12.3 percent were problem gamblers, with the remainder identified as moderate-risk (30.3 percent), low-risk (27.6 percent) and non-problem gamblers (29.8 percent).

The majority of difficulties among problem and moderate-risk gamblers were attributed to wagering on horse/dog races (37 percent) or sports events (17.2 percent), and slightly more than one-tenth had experienced problems due to electronic gaming machines (11.8 percent).

Participants who experienced gambling problems tended to attribute them to gambling on the internet using apps (48 percent). Relatively few participants attributed their gambling problems to betting via telephone (5.1 percent). One-quarter of participants attributed their gambling problems to wagering via websites (26 percent), and one-fifth to gambling in venues (20.9 percent).

Participants reporting gambling problems were more likely to use deposit limits and time-out tools. Whether participants had gambling problems or not made no difference when it came to reported use of activity statements.

Overall, the most popular reasons for using consumer protection tools were to increase feelings of control and pro-activity with gambling and in response to spending too much money gambling.

  • Activity statement users mostly viewed their statements to see their transaction history, and just under half to see a summary of their gambling.
  • Deposit limits were primarily used to limit gambling spending, as a means of tracking gambling spending, and to avoid developing gambling problems.
  • Time-out was used as intended—to take a break from gambling.

When researchers asked why people did not use the tools, the most common responses were, “I don’t have any problems with my gambling” and “I can control my own gambling without the (tool).”

 

How Do These Tools Affect Gambling?

A portion of participants who used the tools reported that they impacted their gambling behavior. While only 22.9 percent of activity-statement users thought their gambling had changed because of the tool, the restrictive tools were more impactful, with 58 percent of deposit-limit users and 69.6 percent of time-out users reporting that their gambling had changed as a result of using the tools.

Deposit-limit users indicated the tool had reduced the amount of money (63.8 percent) and time (46.8 percent) they spent gambling, increased their control over gambling (53.2 percent), and reduced their thinking about gambling (23.4 percent). Time-out users indicated the tool had changed their behavior in that that they spent less time and money gambling and were more in control of their gambling.

 

Self-Budgeting

Over half of the internet gamblers in the study reported setting formal or informal budgets for their online wagering (55.5 percent).

Common strategies included limiting the funds available in wagering accounts (46.6 percent) and withdrawing funds on a regular basis or following large wins (47 percent).

Approximately one-quarter of self-budgeting participants viewed their personal bank/credit card statement as a strategy (24.6 percent). Overall, people tended to adhere to the budgets they set themselves with half adhering to their budgets most of the time, and 38.3 percent always adhering. Only 9.9 percent adhered some of the time, and 1.6 percent never adhered.

 

Beyond Problem Gambling

The Australian study indicates a need to enhance awareness of the consumer protection tools—a necessary precursor of tool use. Although activity statements were the most popular and widely used tool, relatively few gamblers used the restrictive tools (deposit limits and time-out).

The report indicated that internet gamblers have some awareness of the importance of taking active steps and using tools to assist gambling within affordable levels. But there was a pervasive view that the tools are intended only for people with gambling problems. Although time-outs may be most useful for those who need assistance in avoiding gambling due to problem gambling and experience of harms, use of activity statements and deposit limits are arguably relevant for all gamblers to enhance sustainable gambling.

The consumer protection tools reviewed in the study should be viewed as distinct from interventions such as self-exclusion. The tools are intended to be used by a broad segment of internet gamblers, including those who wish to be proactive and have assistance to keep their gambling within sustainable levels.

Although the study suggests that internet gamblers already set budgets and therefore realize the importance of such actions, consumer protection tools should be promoted as supporting internet gamblers with their own personal strategies, enabling them to manage their play and track expenditures more easily.

 

Changing Perceptions

Given the increasing prevalence of internet gambling, policies and practices that assist gamblers to monitor and limit their gambling expenditures across sites are necessary. Communication should focus on empowering autonomy among internet gamblers for exercising personal control. Changing terminology and placement of tools may encourage all online wagering customers to use the tools.

Gambling operators worldwide predominantly use the term “responsible gambling,” which should be avoided. The researchers purposely did not use “responsible gambling” in their study, but rather referred to “gambling tools” to avoid introducing bias into recruitment and responses. Terminology must also clarify that the tools are relevant for the entire consumer base, perhaps with the use of the terms “play management” or “account tools,” which could replace current terminology.

Additionally, developing tools and strategies that do not rely on individuals to be proactive and opt in should also be considered. Drawing on behavioral economics, operators could “nudge” gamblers toward sustainable play, for example, making tool use on gambling websites automatic, such that gamblers have to opt out rather than opt in. The self-management strategies reportedly used by gamblers—for example, keeping limited funds in their accounts and making withdrawals after wins—could be made available and automated on gambling sites.

Clearly, not enough is being done to protect consumers from potential harm on gambling websites. More efforts are needed to develop and evaluate consumer protection and play management strategies that are perceived as useful by more internet gamblers.

*See the full study at: doi.org/10.1007/s10899-019-09859-8

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Sally M. Gainsbury, Douglas J. Angus, Lindsey Procter and Alex Blaszczynski (2019). Use of Consumer Protection Tools on Internet Gambling Sites: Customer Perceptions, Motivators, and Barriers to Use. Journal of Gambling Studies. This work was funded by an Australian Research Council Discovery Early Career Research Award granted to Dr. Sally Gainsbury and research funding provided by Responsible Wagering Australia to Gainsbury and Blaszczynski.

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