6
The Royal College of Psychiatrists:
Submission to the Gambling Commission
Consultation regarding the document on
“Remote Technical Standards”
The Royal College of Psychiatrists is the statutory body responsible for the supervision of the training and accreditation of psychiatrists in Britain and for providing guidelines and advice regarding the treatment, care and prevention of mental and behavioural disorders.
In the course of their work, psychiatrists deal with people needing help who are in difficulty as a result of excessive gambling.
The Royal College of Psychiatrists is therefore concerned that any attempt to deal with the regulation of ‘remote gambling’ ensures that the licensing objective for the “protection of children and other vulnerable persons from being harmed or exploited by gambling” set by section 1 of the Gambling Act 2005 should be met. In order to do this, there must be a clear understanding of a number of fundamental underlying aspects. The Royal College of Psychiatrists therefore proposes to draw attention to these in more detail.
Responsible gambling
If the term ‘responsible’ is to have any meaning at all in relation to gambling, it must imply moderation.
It is therefore significant that the notion of ‘responsible gambling’ originally emanated from and has been promoted by the gambling industry. An example of this is the Victoria Gaming Machine Industry’s Code of Practice, which has been more generally adopted in gambling. In this, it is stated that,
“Responsible gaming is each person exercising a rational and sensible choice based on his or her individual circumstance.”
and
“The industry’s role is to offer products and services in a way that facilitates customers’ ability to engage in responsible gaming”.
The implication of this is that, if those who participate are given information and educated about gambling, then they will be able to exercise an informed, free choice.
However, as was demonstrated in the previous submission by The Royal College of Psychiatrists on the consultation about the document on the “Statement of Principles on Licensing and Regulation”, the facts are otherwise. There are potent psychological and physiological effects associated with gambling that impact on the individual gambler affecting his/her ability to exercise rational choice.
It is increasingly agreed that, in commercial transactions, decisions should be made in a calm and secure place and manner and that there should be a cooling off period available to ensure that a change in choice is possible.
This is patently not the situation in commercial gambling, especially casino gaming. While claiming to be behaving responsibly by giving information and advice, in future the gambling industry will be allowed actively to promote its product. Consequently, however well regulated, the incentives offered to continue gambling appear to the person who is gambling to be far greater than the warnings given. The psychological and physiological effects on those who participate in gambling inevitably encourage the chasing of losses.
Moreover, as was also demonstrated in the previous submission by The Royal College of Psychiatrists on the consultation about the document on the “Statement of Principles on Licensing and Regulation”, there is no evidence that those who gamble to excess are fundamentally any different from the rest of the population. All of us are therefore vulnerable to take gambling to excess.
Remote gambling
It is generally agreed that legal commercial gambling involving large sums of money should only take place in licensed premises. Those present have gone there because they have decided to take part in the gambling being provided. As against this in the remote variety, opportunities for gambling are now found very extensively in locations where one would not normally expect them. Invariably, one stumbles on them when ‘surfing’, even if one starts doing so with no intention to gamble.
Moreover, unlike gambling in the social environment of licensed premises, that in the remote variety is done on a computer, television screen or mobile phone in an isolated setting. There is therefore the added danger for the person gambling to act on impulse, because the checks and constraints that can be exercised by the presence of others are lacking.
On some online gambling sites, this situation is aggravated by the use of a series of consecutive ‘pop-ups’ that appear when an attempt is made to close down the browser window. The following are quotations from some to be found on the internet:
“Wait! A chat representative would like to talk to you about our amazing new player promotion.”
“Hey wait! We hate to see you go!”
“Please type 'HI' or 'HELLO' in the space below to let me know you are there...”
“Download our FREE software or try our No Download casino version. Either way, you can be playing in minutes! Just CLICK HERE”
“Whenever you are ready, just type 'HI' or 'HELLO' and we can get started...”
Such messages in a gambling situation are difficult to resist, particularly if the person receiving them is alone.
Finally, unlike the circumstances in licensed premises, it is very much more difficult to prevent children from having access to remote gambling, as things are arranged at present.
The regulation of remote gambling
The regulation of remote gambling is a truly daunting task. Indeed, in the present situation, it is probably a chimera. This is especially so in Britain where it is being undertaken at the same time as gaming is being deregulated. One therefore has some sympathy for the Gambling Commission being asked to produce workable arrangements.
One thing is certain; history shows that the regulation of gambling has to be tight to be effective. The situation is complicated by the fact that, on the internet, the ability of the authorities to regulate is limited to gambling promoters based onshore. Those abroad can offer their wares unhindered.
Even this is not the complete picture. In March 2006, the Culture Department and the Gambling Commission jointly issued advice about ‘Advertising by Remote Gaming Operators’. This stated quite explicitly that, under Section 42 of the Gaming Act, which is still operative until the Gambling Act 2005 comes fully into operation, the promotion of commercial gaming in publications and also on UK based web sites is prohibited. Yet, in spite of the fact that the law is being openly flouted, no action has been taken.
The matter has been complicated even further by the Culture Department advice regarding the 'White Listing' criteria for inclusion on the list of countries that may advertise their gambling operations in Britain after the Gambling Act becomes fully operative.
The Department heralds this as action to "protect online gamblers". As the criteria stand, they appear impeccable; however, there is one fatal flaw. Most such gamblers get their information about gambling sites from advertising and search engines on the internet. How does one regulate for this, if it emanates from foreign jurisdictions with dubious or no regulation?
The Culture Department has tried to deal with this by holding a one-day meeting last autumn at Ascot racecourse. In the advice regarding the 'White Listing' criteria, the Department has referred to this in the following terms:
“The agreement, reached following a summit attended by 31 countries in Ascot last October, will see international cooperation on protecting children and vulnerable people, keeping out crime and making sure games are fair.”
Yet, at the time, The Times reported that,
"the summit ended without agreement over minimum international standards for internet gambling."
In all the circumstances, it could hardly have been expected to deal with this situation. It is therefore a matter of concern that the Culture Department now refers to all this as follows:
“An international working group will also investigate how Governments can cooperate more closely with the financial sector, share research, develop more effective licensing regimes and promote public awareness of responsible gambling.”
However, the reality of this situation is such that by its nature “an international working group” is unlikely to resolve it in the foreseeable future.
Remote Gaming Duty
An even more crucial aspect of the situation is the tax regime to be applied to remote gambling. Since the Chancellor in his recent budget has now set this at 15%, the promoters have made it quite clear that they will continue to remain offshore.
Interestingly, the response of the trade organization, the Remote Gambling Association, has been that,
“..it also blows a huge whole (sic) in the Gambling Act 2005 which Ministers have frequently said was driven by the need to regulate remote gaming.”
In view of all this, The Royal College of Psychiatrists is concerned that there have been reports such as the following:
“The Government had hoped to gain tax revenues from offshore operators. A compromise was reached with the industry whereby the likes of PartyGaming or Ladbrokes.com could remain in Gibraltar. In return for a small amount of Remote Gaming Duty, they would be licensed and regulated by the UK authorities.”
It is vital to recognise that British regulation of online companies in any meaningful sense is only possible for those based in Britain. Consequently, any scheme of the type being canvassed by offshore operators is totally unacceptable.
Remote Technical Standards
In view of all the above aspects, the Gambling Commission clearly has a very difficult task to set remote technical standards that will meet the statutory licensing objectives, particularly the “protection of children and other vulnerable persons from being harmed or exploited by gambling”. Nevertheless, if remote gambling is to be permitted, it is vital that robust standards are set.
‘Fair and open’ technical standards (Chapter 1)
In view of the nature of gambling, the proposals for devices with restricted displays are inadequate. Thus, it is stated that information should “be made available through other reasonable means, for example, on websites, via email, or through the post” (para. 1.7). This arrangement totally ignores the characteristics of commercial gambling as described in an earlier Royal College submission. These proposals will certainly not ensure that those who gamble will be encouraged to so in a moderate manner viz. “responsibly”.
Adaptive behaviour
The document rightly deals with adaptive behaviour, which involves adjusting “the odds of particular winning events occurring based on previous payouts or intake”. However, the manner in which this is done is far too ambiguous.
Thus, the Commission comments as follows in para. 1.64:
“To be consistent with the draft standards regarding result determination (outlined above) the use of adaptive behaviour should be prohibited.”
It then goes on in para. 1.66 to say,
Many jurisdictions prohibit adaptive behaviour for the remote sector (eg the Northern Territory of Australia, Alderney).
Yet, a whole series of standards is offered in para. 1.68, if adaptive behaviour were permitted in spite of the stated inconsistency with the standards that are being set.
The Royal College of Psychiatrists recommends that adaptive behaviour should be prohibited.
‘Responsible gambling’ technical standards (Chapter 2)
The approach in Chapter 2 to the regulation of remote gambling to promote ‘responsible gambling’ is too laissez-faire. One appreciates the inherent difficulties in attempting to regulate in the present situation, but the proposed standards are inadequate. The following are some examples:
· In 2.17, “We propose that operators should have the flexibility to implement financial limits”.
· In 2.23, “The Commission does not think that there is reason at this time to create remote technical standards intended to prevent individuals from playing more than one game cycle at a time”.
· In 2.32, “We do not propose to require operators to implement session time reminders”.
· In 2.35, in relation to “Responsible product design”, “The RGA code of conduct already encourages its members to consider these issues and we believe that this good practice should be supported through these standards”.
Throughout this chapter and, indeed, throughout the document, the approach that is adopted is that, as long as those who gamble are warned, thereafter it is up to them to protect themselves. It is understandable that gambling promoters would adopt such an approach. Reference has already been made above to the previous submission of The Royal College of Psychiatrists regarding the highly addictive nature of gambling especially hard gaming. This applies particularly so to remote gambling.
In these circumstances, the Gambling Commission needs to adopt a far more proactive approach. The prime concern must be the prevention of the exploitation of the individual gambler by the operator. Commercial codes of practice are no substitute for firm regulation.
Behavioural targeting and tracking
Behavioural targeting (BT) technology is an automated process of intelligent listening and responding, working with individual web site visitors, based on their click-stream interactions. This has been shown to result in significant measured improvements in visitor engagement and revenues for the web site. The benefits for the promoter have been described as follows:
“The goal is to use BT to let you send the appropriate message to each user based on where they are in your product sales cycle. Using BT to deliver relevant messages to your past website visitors is the most efficient use of your advertising dollars.”
Behavioural targeting is extensively used by gambling operators on the internet to pursue people who have accessed their web sites and to encourage them to continue gambling when they attempt to leave the site. This even occurs on sites that advocate ‘responsible gambling’.
It is a matter of great concern that nowhere in this document is there any reference to behavioural targeting and tracking.
Interactive television
The regulation of interactive television presents special problems. Again, the lack of any reference to interactive television in this document is a major omission.
Conclusion
The Royal College of Psychiatrists has concluded that the Gambling Commission’s regulatory proposals for remote gambling are unlikely to be effective. If they are implemented, the licensing objective of the “protection of children and other vulnerable persons from being harmed or exploited by gambling” set by section 1 of the Gambling Act 2005 will not be met.
March 2007