IN the world of high finance, individual investors are afforded a set of protections. They assume these through the status of sophisticated investor, meaning they can demonstrate they have sufficient financial experience to judge the upsides and downsides of trades. This qualified status protects the less worldly from the unscrupulous.
The same principle should apply to online gambling, a Wild West relative to the highly regulated money markets and a place where little or no protection exists to safeguard vulnerable people from harm. Last year, an estimated £5.6bn was lost by gamblers on online gambling, in many cases by those in need of special care and assistance.
Lawmakers are slowly waking up. They need to get a move on because the same dark arts of data science that have proved so powerful in distorting democratic processes around the world are being mercilessly deployed to devastating effect at society’s most vulnerable individuals. The next Government has an absolute duty of care to step up its actions before more lives are damaged or destroyed.
The recent report from the Gambling Related Harm All Party Parliamentary Group (APPG) represents important progress, notably urging the introduction of stake and deposits limits for online gambling products. The APPG raises concerns at the lack of action from the Government and the Gambling Commission to effectively address the harms caused by the industry, a failure it claims has allowed online gambling firms to prey on vulnerable gamblers.
In a series of recommendations, the cross-party group calls for a major shake-up of “outdated” and “analogue” legislation governing the digital sector, including a ban on credit cards to end the use of debt to fuel problem gambling, significant improvements to protect at-risk gamblers and a more responsible approach to advertising. Of huge concern, but little surprise, was the report’s revelation that gambling brands are visible every 10 seconds in some televised football games. In our national game, the capture is complete.
The APPG is right to focus on the role of affordability checks in protecting consumers, arguing that online gambling firms should demonstrate a clear understanding of what is affordable to users based on a proportion of monthly income. It points out that a Briton’s average disposable income is £450 a month yet screening for affordability often only comes into play after thousands of pounds have been lost.
This check would be akin to the sophisticated or qualified status I outlined earlier, a safeguard that exists for investors around the world who must be able to show they can properly understand and evaluate risks to be able to participate in the money markets. It is absolutely essential for upholding the integrity and efficiency of the financial system, which is fundamentally based on trust between parties.
The shares of online gambling firms fell by nearly £1.2bn after the APPG published its report, a sure sign that investors can see the writing on the wall for their grubby get-rich-quick scheme. Days later, the industry launched a fightback with the announcement of a new body, the Betting and Gaming Council and a set of Safer Gambling Commitments.
The commitments claim to address the harm gambling can cause to customers and young people. They promise to prevent underage gambling, increase support for treatment of gambling harm, strengthen and expand codes of practice for advertising, protect and empower customers and promote a culture of safer gambling. Too little, too late.
I am not anti-gambling. Speculation is part of human nature. Gambling shops have been fixtures of our high streets for decades. But they were only open eight hours a day, unlike online gambling sites which are pumping out manipulative content around the clock. Because of my background in technology, I know the power of data science and its ability to shape human behaviour. That’s why we are using our foundation as a platform to highlight these harms.
Believe me, the same psychological techniques that influence and alter electoral outcomes are being used to drive and monetise gambling addictions. Technology should be a force for good, not ill, in society. If the online gambling sector can’t be trusted to regulate itself, the Government should weigh in. All bets are off that the time has arrived.
David Richards is co-founder of the David and Jane Richards Family Foundation and founder and CEO of WANdisco plc, a software company jointly headquartered in Sheffield and Silicon Valley.