It was a nightmare that haunted Frank Fahrenkopf since the moment he took over as president and CEO of the newly formed American Gaming Association. He had witnessed tobacco industry executives appear before congressional committees to be grilled about their products and their harmful effects on their consumers. The executives steadfastly denied there was any problem with their products and produced bogus study after bogus study defending all forms of tobacco use.
Of course, even then, Americans knew that tobacco killed, so their protestations would have been comical if they weren’t so deadly serious.
Fahrenkopf and most casino executives knew instinctively that gambling didn’t negatively impact the vast majority of their customers, but they had no solid proof. Fahrenkopf didn’t want to see casino executives before Congress undergoing the same kinds of questioning without having solid evidence to back up their understanding of the issue.
“When I first took the job at the AGA, I knew that there were some problems with public perception, and the big one had to do with responsible gaming,” he says. “At the very first board meeting, I told them we had to do something about this. About half the room thought I was crazy.
“But one of the people who didn’t think I was nuts was (former Harrah’s CEO) Phil Satre. He had attended a seminar put on by Howard Shaffer at Harvard about underage gambling. He was very impressed with Howard and urged me to meet with him.”
Howard Shaffer was and is the director of the Division on Addiction and an associate professor of psychiatry at Harvard Medical School. He remembers the meeting well.
“Frank and I were set to debate at a meeting of the National Association of Attorneys General,” he says. “The night before, I got a call from Frank and he wanted to meet for breakfast. I was intrigued so I agreed. He proceeded to ask me lots of questions about how I viewed responsible gaming, and it turns out we agreed on most everything. So the debate turned out to be rather one-sided. When the moderator asked him his opinion, he just turned to me and asked me to speak about addiction and some of the work we had done. That was it.”
Fahrenkopf says that there hadn’t been a study done on problem gambling in almost 20 years, and he asked Shaffer to update it.
“Actually,” says Shaffer, “there had been many studies done over the years, but they had never been collected in one place. We put together all the data that we could find and let the science interpret it.”
“It was really a leap of faith for us,” says Fahrenkopf. “While we believed we understood the problem, we wanted something to validate that belief, but it could have turned out much differently.”
“This is one of the most important issues of the past 20 years in the industry,” says Shaffer. “It has made a big difference in the perception of the industry and also in the lives of people who have this problem. The faith the industry showed in science was commendable.”
Shaffer’s study went on to form the basis of the National Center for Responsible Gaming, which was founded in 1996.
One of the other executives who shared Fahrenkopf’s views was Bill Boyd, the chairman of Boyd Gaming. At that time, in the mid-1990s, regulators in Missouri were requiring gaming companies operating in the state to contribute millions to combat problem gambling, although the definition and scope of the issue was somewhat hazy.
“So this money that Boyd was going to set aside as part of their Missouri commitment became the seed money for the NCRG,” says Fahrenkopf. “In the beginning, we based the NCRG in Kansas City in 1996. We hired Chris Reilly as executive director, a job she’s still doing today.”
Fahrenkopf says the industry wanted peer-reviewed research on pathological and underage gambling.
“We wanted to show that the industry was responsible and cared about our customers,” he says. “The first grant went to Howard Shaffer to do the meta-analysis.”
Shaffer says it wasn’t quite that easy. He required total freedom in choosing research topics, with no feedback or oversight from the industry, for a variety of reasons, and was doubtful the industry would comply.
“Even today, critics of industries are skeptical about studies funded by the industries simply because of the link to the funding,” he explains. “They are not criticizing the research based on its methods, procedures and interpretation; they are just concerned about the source of the funding. But it’s much more important to be specifically critical rather than suspiciously critical.
“It’s a common problem, and we recognized it immediately. So we used the strength and reputation of Harvard Medical School to set up a firewall between the funders and the research. Put simply, our agreement with the gaming industry was that we would do the research of our choosing, we would publish it wherever we wanted, whenever we wanted, and when it was published, we would send it to the industry.
“Early on, they didn’t want that. They would have preferred to have some oversight, which was understandable, but this was too complicated an issue. They had to trust us, and to their credit, they did, and signed the contract.”
Fahrenkopf says it was a crucial point in the development of the NCRG.
“Remember at that time you had an anti-gaming movement that was contending that 20 percent to 30 percent of our customers were pathological gamblers and we were taking advantage of them,” he says. “We had to be careful. We had to make sure there was no suggestion of an industry taint.
“So we set up two boards. One was made up of industry executives who handled the organization’s basic business. But then we set up a scientific advisory board that decided where, about what and to whom the grants were made. There was no influence by the industry. We were just concerned that they would do the research to establish responsible gaming guidelines so we could set up programs.”
Two for One
From the start, it was important for the gaming companies to keep at arm’s length from the research because of the perceived idea that the industry funding would influence the research.
Alan Feldman, senior vice president of public affairs at MGM Resorts International, has been chairman of the NCRG board for almost two years, and involved in the organization since the start. He explains how the process works.
“The scientific advisory board has a meeting and comes to the board of directors and tells us what they believe to be relevant and what will get the highest response rate. They’ve come up with tweaks over the years, like using smaller award amounts because it’s not always about the big-dollar studies. They encouraged multi-year commitments because we can better understand the problem over a longer term. So they tell us what the needs are and we decide how we can meet those needs financially and what the ramifications will be for the organization.”
Chris Reilly has been the executive director of NCRG since the beginning. Now based in Boston, she says the NCRG research has always been separate from the funding.
“We set up a firewall,” she says. “Neither the donors nor the board of directors has any say about our funding priorities, mechanisms or research priorities. Ken Winters, a professor from the University of Minnesota and a leading addiction researcher, currently heads the scientific advisory board. That group makes all the decisions about the research.”
Reilly says that over the years, the NCRG has funded research that would have ruffled some feathers in the gaming industry, had it had a say.
“We’ve never taken the safe path,” she says. “We’ve looked at gambling as a public health ‘toxin;’ we actually used that word. We have looked at gambling among the homeless and older adults. So by approaching it as a public health issue, we have to look at the pros and cons. Because of our independence, we’ve developed a high-quality program that is not afraid to take on all kinds of topics related to gambling.”
Shaffer says there were even firewalls on the scientific side.
“We didn’t even trust ourselves,” he says. “I didn’t make the decisions on what research to pursue. People were concerned it would become my agenda, and no one, including myself, wanted that. We follow a strict NIH (National Institute of Health) model. People come together in groups, decide the best direction to take and only the best of the best gets funded. And that’s the way it still operates today.”
Shaffer’s initial research indicated that between 1 percent and 2 percent of Americans were at risk from pathological gambling, a number that has not varied since that first study.
“And we estimated on the high side,” he says. “The number was actually 1.1. percent, which is further proof that the casino industry had nothing to do with the research because no industry would err on the high side, which we decided to do.”
The initial research into the neuroscience of problem gambling was very fruitful, according to Reilly.
“It encouraged the American Psychiatric Association to move gambling disorders into the addiction category in the diagnostic manual, where previously it had been in the impulse control category,” she explains. “That made a huge difference because it meant that most states would fund treatment for problem gambling, while they would not if it was simply an impulse control issue. Our research helped them make that determination.”
The early days of the NCRG were filled with studies examining the physiological and environmental causes of problem gambling— epidemiology, neurology, behaviors and population segments that suffer with it.
“It took a while to get to the psychology and social setting, which is where we are now,” says Shaffer. “Today, we’ve got lots of great studies—treatment outcome studies, cultural studies—the field is growing by leaps and bounds.”
Complicating treatment, however, is the comorbidity issue—gambling addicts are usually addicted to another substance or activity—so finding a holistic manner to treat all the problems is difficult.
“Today, it’s very difficult to get a grasp on whether other problems cause gambling difficulties or gambling difficulties cause other problems,” says Shaffer.
Shaffer’s group at Harvard did a study a few years ago showing that 73 percent of people with gambling disorders also have other mental health problems. It was about evenly split whether the gambling or other mental health problems came first.
Reilly says real strides have been made recently in identifying drugs and pharmaceuticals that are effective combatting problem gambling.
“The more you learn about the brain, the more you discover what kinds of pharmaceuticals are effective in treating the disorder,” she says. “For example, right now, we have a rat study going on in Chicago—an animal model study—that is showing great promise. This particular drug they are testing seems to be reducing impulsiveness in the rats where we model gambling behavior. So the next step would be doing a small study with humans to see if this makes a difference. We’re starting to realize some important insights that will really help people.”
Feldman says some experiments in brain waves are also encouraging.
“I have a hearing-impaired daughter who is being treated with different kinds of brain impulses,” he says. “If we can figure out how to direct similar impulses to the affected areas of a gambling addict’s brain, maybe we can offer them some help.”
The fears that online gambling would exacerbate any problem gambling issues have not materialized, according to Shaffer.
“Using a strategy similar to the early work we did for land-based gaming, we identified that people were much more moderate in their gambling than critics were contending,” he says. “Those rates are very similar to the land-based rates,” with the caveat that the data was compiled from principally European gamblers since iGaming is relatively new to the U.S.
Fahrenkopf says he’s seen the same results.
“When we were considering supporting online gambling at the AGA, we had people come to us and say that problem gambling was going to be much worse when you could do it online. But from all the studies I’ve seen, that’s not the case,” says Fahrenkopf.
Shaffer says that studies will intensify as iGaming spreads across the U.S.
“I think inevitably that online gambling is here to stay,” he says. “I recognize the legal situations in the U.S.—it frightens a lot of people. But eventually it will be like the telephone or the automobile, which frightened everyone at the start. It’s here to stay, and that means more research will be forthcoming.”
Shaffer says he was pleased that so much data was available when his team initiated the studies of online gambling.
“I wasn’t smart enough to realize that right away,” he says. “That was (former bwin co-founder) Manfred Bodner’s idea. We met for a couple of days and he convinced me that this would be the future. When he told me that we could study every wager and every keystroke, my group went to work on it. We got to study actual behavior because, let’s face it, people with gambling problems don’t always tell the truth.”
Fahrenkopf calls the establishment of the NCRG one of the most important things he accomplished during his 17-year tenure heading up the AGA.
“No one can say that this industry hasn’t stepped up to the plate and been responsible in trying to uncover solutions for those that suffer with this compulsive gambling problem,” he says.
Feldman agrees, but would like to see problem gambling de-stigmatized. Too often, he says, the self-exclusion policies established by many states have a criminal outcome if the self-excluded person violates the terms of that policy.
“If self-exclusion is one of the tools that we use,” he says, “and clearly it is, we need to treat it like we treat alcoholism or drug abuse. We need to accept that the person has a problem and allow him to treat that problem without a threat of prosecution. People suffering from gambling problems will then be able to come out to their family, friends and co-workers and get their support in getting on a path to treatment and hopefully to recovery. That really can’t be done today.”
Shaffer is proud of how the NCRG has raised awareness of gambling-related problems.
“The research we did led to responsible gambling programs and guidelines all around the world,” he says.
He says that NCRG built integrity under serious duress.
“That’s not easy to do,” he says. “It is an industry-born organization that has integrity, which reflected a shift in the industry from organized crime to responsible public companies. The NCRG was a punctuation of that movement. And I like to think that in a few short years, it will be considered a premier foundation, like the Ford Foundation, the Rockefeller Foundation and others.”
And finally, says Shaffer, the NCRG was built upon a foundation of science.
“The NCRG was born at a time that science was being challenged,” he says. “The fact that it has survived and even thrived during that time is a real accomplishment, and that we’re letting science guide us rather that politics.”