Monday January 20, 2020

Gambling at risk of becoming ‘the new smoking’ if industry fails to act

Calls for online bookies to introduce mandatory deposit limits have been ignored

Aaron Rogan

News Correspondent

@aarrogan
21st July, 2019
2
A cooling-off period would prevent gamblers from chasing their losses Picture: Getty

Gambling will get a “stench like cigarettes” unless bookies make their online operations less addictive, the co-founder and former chief executive of Paddy Power has told The Sunday Business Post.

Stewart Kenny’s calls for online bookmakers to introduce measures to force customers to limit the amount they can lose in a single session have been ignored so far.

Under his proposals, customers would be forced to set a limit on how much they can top up their account when they register. Gamblers could change this limit, but with a cooling-off period ensuring that they do not chase their losses by repeatedly topping up. This would prevent punters whose habit has spiralled out of control from losing large sums in short periods on online casino games or the 24-hour offering of sports bets.

The industry has acknowledged that giving customers this control is useful but will only offer it on a voluntary basis. Paddy Power Betfair, Boyslesports and others in the industry have attempted to stem the tide of criticism by investing in new technology to better identify problem gamblers and increase their contact with potential addicts. They have also established a trust to fund therapy.

Kenny said bookmakers were “swimming against the tide” by not making the product less addictive and called on the government to introduce regulations to limit the damage.

“I welcome the trust but really what is more important is to make some of the online gaming products less addictive and to bring in mandatory deposit limits to protect customers. I cannot understand why they wouldn’t bring in mandatory deposit limits to protect their more vulnerable customers. One hopes it is not because it would affect their profits too much,” Kenny said.

“To continuously throw money at therapy without making some of the product less addictive is a never-ending cycle.”

Kenny, who was on the board of Paddy Power until 2016, said that the Irish trust was a necessary development but “it is not a long-term solution because eventually the product will get a stench like cigarettes. It will be harder and harder to get executives and the public will turn against it.”

The Dubliner said he realised now that he should have done more about problem gambling when he was on the board. “Self-regulation won’t work and hasn’t worked. There are bonuses for profits, not for social responsibility. As someone with experience on the board, I can tell you boards look to governments for regulation.”

Bookmakers offer voluntary limits for customers and employ “responsible gambling” teams to step in when gamblers appear to be losing control. Evidence is stacking up that these measures are weakly enforced and bookmakers are failing to rise to the challenge of balancing their profits with limiting social harm.

Emails seen by this newspaper show that the same staff whose job it is to increase the turnover of losing customers by incentivising them with free bets and trips to sporting events are also tasked with protecting them from falling into addiction.

Increase turnover

The use of VIP managers to increase turnover rose to prominence after the case of Tony O’Reilly, the An Post manager who was jailed in 2012 after he stole €1.75 million from his employer to place bets with Paddy Power. O’Reilly was given VIP status by the bookmaker and tickets to the Europa League final and racing events at the height of his addiction.

Since then Paddy Power Betfair, which rebranded as Flutter in May, has increased spending on technology to detect addicts and employed staff to handle responsible gambling initiatives.

Stewart Kenny: ‘Self-regulation won’t work’ Pic: RollingNews

A spokesman said: “Our VIP managers are trained to spot issues with their customers and they form a key part of our responsible gambling approach; their intervention to protect at-risk customers forms part of the performance ratings for the team.

“However, they are not the only people interacting with these customers from a [responsible gambling] perspective. There is a full responsible gambling operations team. They are ultimately responsible. They make the calls, dictate the approach for each customer [and] act independently of VIP management.”

Professor Colin O’Gara, head of addiction services at St John of God’s Hospital, said the revelation that VIP staff were handling responsible gambling outreach was “very concerning”.

Clinical coalface

A gambler who shared his story said that he was contacted numerous times by Betfair staff last year after his betting patterns indicated a problem but he was allowed to continue and was given incentives by the VIP team. O’Gara said evidence was mounting at the “clinical coalface” that the industry’s responsible gambling efforts were ineffective.

On the issue of Paddy Power Betfair staff doubling up on VIP and responsible gambling duties, he said: “To me that does not show an effective means of protecting the individual”.

“It is unacceptable from this point onwards that we do not look at this in a very stringent way. We know that certain individuals are known to gambling companies to be gambling in a disordered way but there is no mechanism in place to help them and the status quo prevails where they continue to damage themselves.”

O’Gara said the current measures allowed the industry to ignore signs of a gambling disorder. Even when a customer voluntarily self-excluded, there was little resistance to them reopening their accounts. He also backed Kenny’s call for a mandatory deposit limit. “The idea of a voluntary limit goes against the idea that the very essence of the illness is that you have a loss of control,” he said.

David Stanton, junior justice minister, is overseeing the drafting of legislation to modernise Ireland’s gambling laws. An independent regulator is due to be established next year and an interdepartmental report has recommended establishing strict rules on how bookies should treat their customers. One proposal includes a version of Kenny’s idea by imposing daily, weekly and monthly spending limits for certain gambling activities, with cooling-off periods required to increase those limits.

A regulator and new laws

Stanton has warned that a regulator and new laws will not fix the social problem of addiction. “It is extremely complex. The more we drill down into it, the more complex it gets. It has become more complex over the decades, especially with the online manifestation,” he told the Dáil last month. “Even where they have very powerful regulators, they still have problem gambling and addictions.”

Kenny and O’Gara say the regulator must hold bookmakers accountable for how they treat customers whose addiction has diminished their personal responsibility.

Regulation in Britain has not stopped a wave of stories of people being failed by the industry. This is despite a series of multimillion-pound fines being levied on the major operators, including Paddy Power Betfair, for not protecting vulnerable customers.

Online bookmakers offer a “self-exclusion” option whereby gamblers can ask for their accounts to be closed indefinitely or for a defined period. Due to lax monitoring, however, problem gamblers are often able to reopen their accounts with ease.

Figures from the British Gambling Commission show that until last year, one in ten problem gamblers who used Paddy Power Betfair’s player protections were able to continue betting with the company. This was high compared with rival firms. As the breaches were self-reported, however, the figure may indicate that the Irish company has a better system for catching people who do get past the protection. In all cases where a breach is spotted, the money is returned to the gambler, a spokesman said.

PPB Entertainment, which runs the online licence for the bookmaker, reported that 5,829 of the 65,396 accounts which had self-excluded in 2016 were able to get around the restriction. In 2017 it was 8,383 of 95,169 for the same licence.

After consolidating its self-exclusions with other licences in the brand and merging its protection platform with Betfair, the number of self-exclusions was 216,123 and only 714 accounts managed to breach the protection.

One of those who did so provided details to this newspaper and said they were repaid the money lost following the self-exclusion on the condition that they signed a confidentiality agreement. The deal does not stop them informing the regulator or a therapist. The company said it was to prevent social media posting about the case.

A Flutter spokesman said it had established “industry-leading self-exclusion procedures”, and an independent industry source said the company was among a small number that had taken serious steps to address the harm caused by gambling. The spokesman said that as well as self-exclusion, the company had a number of tools to help staff spot behaviour that might be a sign of addiction.

“We look at a range of customer behaviours, including deposits, and regularly engage with customers who we think may be at risk. We use both predictive and reactive data models covering a range of customer behaviours.

“As publicly stated in our annual statements, we communicate with up to 70,000 customers per month and up to 1,000 customers per month receive in-depth responsible gambling phone calls. We have recently elevated deposit limits on site and they are now a very visible part of the registration journey. We continue to analyse ways of making our procedures more effective.”

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