1. Introduction
“To win, then to astonish and finally
to hope. He has wagered not only money but also his life itself.”
Dostoyevsky
1. The great increase in gambling and betting activities
on the Internet (hereafter called “online gambling”) and its growing
use present genuine social and public health problems. These arise
not only from the existence of such gambling but from its excessive
use by certain vulnerable groups such as young people, the unemployed
and pensioners. The addiction to online gambling as understood here
is a special form of addiction to games of chance and money. The
rapporteur will therefore start with the phenomenon of gambling
addiction in general and will then include the additional dimension
represented by the Internet and analyse the social consequences
of excessive gambling (also called problem gambling or pathological
gambling depending on the seriousness of the problem) and possible
political responses.
2. Addiction to online gambling is not just something that concerns
the individual and his or her leisure preferences, though it is
still treated as such in many countries. Initial studies on the
possible serious social implications of gambling addiction are only
just appearing. The rapporteur is particularly dismayed by this
lack of awareness and by the absence of national and European studies
in this area. In most member states and at international level,
online gambling addiction is not even recognised as a health problem.
Even a specialised agency like the World Health Organization (WHO)
does not include it in its list of health topics.
3. The rapporteur would like to draw member states’ attention
to the growing phenomenon of online gambling addiction as a social
and public health problem. He stresses that the phenomenon referred
to in this report is online gambling, involving financial gain,
and not online gaming (Internet games and video games in general).
There may be a connection between the two, but generally their characteristics
and consequences are very different; naturally, therefore, the response
to them must be different. Bearing in mind this distinction, the
rapporteur wishes to show how important it is to frame national
policies to prevent online gambling addiction and to put in place
specific assistance arrangements, going beyond the mutual support
provided by associations such as Gamblers Anonymous.In his view, gamblers in every
country should be properly monitored and suitable structures similar
to those for drug addiction and alcoholism established.
2. Addiction to online gambling: a social
and public health problem?
2.1. The concept of “pathological gambling”
4. Games of chance and money have developed strongly
throughout Europe since the 1970s. Apart from the entertainment
derived by users from their games, the latter may – depending on
their nature – become harmful, have a serious impact on the financial
and economic situation of the persons concerned and lead to individual,
family, social and professional harm, and even lead to genuine addictive
behaviour.
5. The concept of “pathological gambling” as unsuitable, persistent
and repeated gambling emerged in scientific literature around the
end of the 1980s. Immoderate gamblers were initially regarded as
suffering from impulse disorders and such disorders were later gradually
included in the non-substance addiction category. The two generally
accepted concepts are (1) the “pathological gambler”, whose state
or behaviour follows certain criteria noted in clinical diagnosis
or a test questionnaire (often the DSM-IV classification tool),
in particular
an inability to control his or her behaviour and continuation of
this behaviour despite its negative consequences, and (2) the “problem
gambler”, who is not classified as pathological but has problems
with his or her gambling behaviour.
6. Regarding online gambling in particular, the problems of gambling
addiction should be distinguished from those associated with a more
general dependence on the Internet, known as “cyberdependence” or “cyberaddiction”,
though both types of addiction are closely linked in that a large
percentage of “cyber dependent” persons (some 30% according to the
European Interactive Advertising Association) are “hooked” on gambling.
2.2. Growth in games of chance and money and prevalence
of gambling addiction
7. Games of chance and money have grown strongly in
recent years. According to a study by the French National Institute
for Statistics and Economic Studies (INSEE) in 2005, the increasing
diversity of available games has led to increased spending by the
French, which has virtually doubled in twenty-five years: even in 2003
it already amounted to €7.8 billion, that is to say €130 per head,
meaning that their share of the household budget is only marginally
less than for books (0.9% against 1%). The poorest households gamble
more than the rest of the population and the strongest growth is
found in the area of coin-operated machines and other instant games,
at the expense of horse race betting and traditional lotteries.
Nevertheless, the French do not appear to be the most inveterate
gamblers in Europe, being slightly below the average in 2005, well
behind Slovenia, Spain, Malta and Finland.
8. In the majority of member states, there is no precise data
on the prevalence of pathological gambling and even less on online
gambling. However, in most developed countries the percentage of
the population involved in problem and pathological gambling is
generally estimated at 1.5% to 3%. According to international surveys,
the United States and Australia top the list with 5% of their populations,
while Norway is at the bottom with 0.2%. According to the French
National Institute of Health and Medical Research (Institut national
de la santé et de la recherche medical – INSERM), France is in the
1% to 2% bracket, which represents between 400 000 and 800 000 people.
According to INSEE, about 500 000 French people regularly try their
chance on the Internet, visiting 2 000 sites, most of them illegal
at the moment in the absence of systematic deregulation of the market
(see below for the legal context).
9. Not all games involve the same risk of addiction. However,
no thorough study has yet been made of whether there are some games
which are more liable than others to trigger addictive behaviour.
Several studies show that the shorter the interval between placing
the bet and reaping the expected gain, the greater the possibility
of repeating the gambling sequence and the greater the risk of addiction.
According to SOS Joueurs (Gamblers SOS) in France, and as far as
games of chance in general are concerned, coin-operated machines
are the most habit-forming and account for 62% of the calls for
help from pathological gamblers to that association. The impact
of a large initial gain is also one of the classical factors that
set off pathological gambling. With particular reference to online
gambling, the following risk factors – which at the same time act as
stimulants for pathological gamblers
– have been identified:
- ease of access to gambling at
home or at work, and by vulnerable people (minors, drug addicts,
etc.);
- high-event frequency;
- interactivity which gives the player the illusion of being
in control of the game;
- the virtual payment arrangement which comprises a risk
of the player’s losing sight of the overall picture and of losing
control;
- anonymity which means that the player does not have to
reveal himself or herself and can avoid any social control;
- the distraction found in gambling;
- the gradual erosion of inhibitions by entertainment-based
approaches, making gamblers overconfident;
- the diversity of what is on offer;
- proactive marketing, including initial special offers,
welcome gifts, etc.;
- a very attractive offer for customers in terms of winnings
because of the lower investment costs for online gambling.
10. According to experts, it is these factors which add to the
particular dangers of online gambling. However, players’ vulnerability
to pathological gambling may vary: generally speaking, a poor social
support and a low socio-economic level go hand in hand with the
prevalence of pathological and problem gambling. Once again, in
the experience of SOS Joueurs France, 70% of the persons concerned
are men, although more and more women are beginning to ask their
organisation for help. It also seems that early contact with gambling
is a factor in the seriousness of the problem, as in the case of
addiction to psychoactive substances. This means that the earlier
contact occurs with gambling the more severe the disease may subsequently
become. With regard to online gambling in particular, a British
study revealed a pathological gambling prevalence rate of 42.7%
among regular players.
11. Various studies have shown that young people have always been
customers of online gambling. Back in 2000, a British study showed
that 56% of a sample of pupils aged between 13 and 15 had used the
Internet to play the national lottery. According to a German study,
24% of boys and girls had admitted to purchasing “buy-ins” for online
gambling every week.
The
rapporteur believes that minors are particularly vulnerable and are
at risk of developing an addiction. He therefore wishes to stress
the importance of focusing attention on the particular situation
of children and young people.
2.3. Social and public health consequences of pathological
gambling
12. Pathological gambling, including games of chance
and money in general and online gambling more specifically, may
have serious socio-economic consequences for players:increased impoverishment, debts, family
problems and gambling-linked divorce, suicide, simultaneous addiction
to substances (tobacco, alcohol, drugs). These games lead to more
numerous social problems in the poorest populations, as for them
the percentage of gambling expenditure is higher even if the absolute
amounts spent are lower. Even for games not requiring a financial
outlay, socio-economic consequences may occur when games are accessible
at the gamblers’ workplace and jeopardise their professional commitment.
13. A survey of a population of gamblers in Canada reveals that
about 25% to 30% of job losses and personal bankruptcies are linked
to gambling. In France, data from SOS Joueurs show that 20% of gamblers who
have fallen into debt have committed offences (confidence tricks,
robberies, counterfeiting of cheques, etc.). According to studies
in a number of countries, the social cost of pathological gambling
is increased by the costs to families and intangible costs such
as distress felt by family and friends, psychological effects of separation,
the neglect of children by parents who are addicts, etc. A study
in Australia calculates the social cost of gambling at about €15
per head per year, which corresponds approximately to the estimated
social cost of cannabis use in France.
14. Recent research indicates that pathological gamblers also
have a clear tendency to suffer from associated problems (for example,
tobacco addiction, alcoholism or drug addiction), which may increase
in parallel with their addiction to gambling: 60% of pathological
gamblers show dependency on tobacco and nearly 50% suffer from alcohol
dependence. In general, other addictions (for example, illegal drugs)
precede the beginning of pathological gambling (particularly in
men); people suffering from this type of problem even have a three
times higher risk of developing pathological gambling behaviour
than the population at large. Pathological gamblers with a background
of drug dependency generally also have a greater degree of addiction.
Pathological gambling and associated disorders are therefore closely
linked and may strengthen one another.
15. Although it may be regarded as a public health problem, pathological
gambling basically has causes and effects in the social field. The
concept has been the subject of numerous scientific and ideological
debates, conflicts of interest and lobbying. However, in many countries
excessive gambling is still regarded as an individual disorder rather
than a social problem, which often enables the state to wriggle
out of part of its responsibilities. Such an attitude ignores the
social cost of games of chance and money, as described above.
2.4. Addiction to online gambling as a specific form
of pathological gambling
16. In general, the gaming scene continues to evolve,
with online games (including those without financial gains which
are not dealt with further in this report) occupying an increasingly
important place. Video games have been transformed by the development
of the Internet and are leading to new multi-gamer practices online. In
the case of France, INSEE indicated in 2006 that over 30% of young
Internet users (15 to 18 years of age) used it for gaming purposes.
One question which remains to be studied is whether young people
making excessive use of online games (without financial gain) are
also more exposed to online gambling or have a greater chance of
developing related pathologies at some stage.
17. Certain studies suggest that addiction to pathological gambling
is particularly common among online gamblers. Quite apart from the
advantages of the Internet (anonymity, invisibility and availability),
no real supervision is exercised by the operators. In the case of
the United Kingdom for example, 74% of online punters are apparently
compulsive gamblers. The various French associations, which have
been extremely active since the 1990s, are also in a position to
put forward specific figures for pathological or problem gambling online:
for example, requests for assistance to SOS Joueurs in respect of
online gambling have greatly increased in the last few years, from
4.9% of all requests in 2005 to 27.6% of all requests made up to September
2009.
3. Pathological gambling in a wider European economic
and legal context
18. Aside from the risks incurred by excessive users
of games in general, games of chance and money represent, with their
associated peripheral activities, an important area of the economy
that creates a large number of jobs and contributes to the development
of numerous economic, cultural and commercial sectors in various
countries. Gambling in general also makes a by no means negligible
contribution to the finances of the state and communities and distributes
dividends to thousands of winning gamblers and to various bodies, structures
and associations. Thus, in many European countries, online games
and betting constitute by far the most important source of income
for sports organisations. In 2009, the European Parliament therefore recommended
that governments protect sporting competitions from any unauthorised
commercial use and take steps to ensure fair financial returns to
the benefit of all levels of professional and amateur sport.
Given these
conditions, it is worth underlining the fact that the state plays
a dual role by both promoting gambling and protecting its citizens.
19. Online games were estimated to represent about 5% of the total
market of games of chance in the European Union in 2009.
Recent studies have shown
that the online gambling sector today is, to a significant extent,
controlled by criminal groups whose activity is facilitated by largely
unregulated markets.
In
2005, it was estimated that there were some 2 500 Internet gambling
sites representing a turnover of US$12 billion. At the time, it
was also estimated that the turnover would double by 2010. In France
alone, it is estimated that the turnover of online games will reach
more than €2 billion by 2015.
Internet site operators are often
based in countries where online gambling is allowed and welcomed
as a source of revenue in the form of tax revenue. Thus, many of
the online casinos are based in the Caribbean, where the first online
casino opened in 1995.
In 2010, the number
of illegal gambling sites worldwide is generally estimated at about
15 000.
20. The rapporteur’s initial intention was to study the link between
online gambling and cybercrime, to which pathological gamblers would
appear to be particularly vulnerable. However, so far there is no
empirical evidence for this link. In contrast, in practice it seems
that that there are more pathological gamblers who develop criminal
practices (to finance their gambling) than players who fall victim
to criminal practices on the Internet. Because of this lack of evidence,
the rapporteur decided to remove the cybercrime aspect from this report
and change the title accordingly, putting the emphasis on the problem
of pathological online gambling as a social and public health problem.
Nevertheless, the legal and economic implications of the problem
need to be taken into account, given that illegal games are generally
considered to involve higher risk factors for the development of
addictions than the legal offer.
21. Despite the economic significance of the sector and the obvious
need for stricter regulation, many member states have not yet adopted
a clear position through their legislation and, as a result, there
is little harmonisation at European level. According to the type
of game (lottery, online casinos, bets on sporting events and horse
racing), different approaches are followed by various countries:
(1) complete prohibition of certain games (United States), (2) maintenance
of existing monopolies (Denmark, Finland, Germany, Sweden, Netherlands),
(3) “controlled deregulation” of the market by the granting of licences
by a regulatory body and according to strict specifications (France,
Italy), and (4) complete deregulation of the sector (Austria, Ireland, Malta,
United Kingdom (Gibraltar)). Besides these general trends, approaches
differentiating the type of game can be observed in several countries:
thus at the end of 2009, Belgium opened the doors to legislation
which could lead to a “nationalisation” of online poker activities.
At the beginning of 2010,
Norway adopted a law establishing that processing payments for remote
gambling without a Norwegian licence would qualify as “accessory
involvement in unlawful gambling”. Finland is about to reinforce
the state monopolies by allowing them to offer casino games, poker
and bingo.
22. The lack of harmonisation at European level is helped by certain
legal vacuums and diverging positions taken by different bodies
of the European Union: online games of chance and money are not
covered by the directive on services. The fact that they have been
opened up to competition is a result of the completion of the internal
market based on the principle of the free supply of services.
For years, certain countries, such
as France, have taken advantage of the fact that the directive on
electronic commerce adopted in 2000 does not apply to games of chance
(lotteries and betting) in order to maintain their monopoly situations.
However, the European Court of Justice closed this loophole with
the Gambelli judgment, delivered on 6 November 2003. It took the
view that state monopolies on online gambling were a restriction
on the freedom to provide services. Proceedings for violation of
the principle of the “freedom to provide services” were subsequently
initiated against 10 or so countries, including France
and
Germany.
At
the time when the present report was being finalised, the European
Court of Justice abolished the monopolies in the fields of casinos
and lotteries in Austria and Germany respectively. In its judgment
on the Austrian case, the Court considered in particular as contrary to
the European law the current regulation, foreseen by the Austrian
law on games of chance, according to which the operation of games
of chance in gaming establishments was limited to operators having
their legal seat in Austria. As far as Germany is concerned, the
Court conceded that a monopoly in the gaming field could be justified
if the objective to restrict gambling addiction and criminal practices
linked to illegal games was pursued in a “coherent and systematic”
manner.
However,
it considered the German monopoly as non-justified given that the
lottery companies of the German
Länder particularly
focused on maximising their profits through intensive advertising
campaigns. These two examples illustrate once again the complexity
of the issue treated by this report. Indeed, decisions on game monopolies
are sometimes taken on a case-by-case basis.
23. Very recently, however, the European Court of Justice has
justified state monopolies in cases concerning Portugal and the
Netherlands.
In
Portugal, for example, the lottery operator Santa Casa has multiplied
its appeals to denounce an agreement between the company Bwin and
the Portuguese professional football league on behalf of the defence
of its exclusive monopoly on sports bets and other lotteries. Against the
opinion of Bwin and online game operators, the European judges considered
that the Portuguese legislation indeed constituted a restriction
to the free movement of services, but that the latter was justified
by imperative reasons of public interest such as the fight against
criminal practices. They further specified that in the light of
the sums of money involved these games carried a high risk of offences
and fraud. In fact, this example shows that member states are authorised
to restrict the offer of games in the public interest, for example
to avoid gambling addiction or organised crime, but that such restrictions
must be appropriate and coherent with the behaviour of the state
in this field.
24. Amongst the most appropriate approaches with regard to the
prevention of gambling addiction, the one of a rigorously regulated
and limited market is strongly recommended by experts from the field,
such as the Central Office for Matters of Addiction in Germany (Deutsche
Hauptstelle für Suchtfragen e.V.) in order to reach a balance between
the satisfaction of the demand on the one hand and the protection
of gamblers on the other.
This
pathway is currently being followed by France where the Authority
for the Regulation of Online Games (Autorité de régulation des jeux
en ligne) was set up through the adoption of the law on the deregulation of
online games of chance on 6 April 2010. One of the main responsibilities
of the authority will be to supervise the respect of a list of strict
requirements which contains, amongst others, the type of games authorised,
which submits operators to a condition of presence on the national
territory so as to ensure the access to certain data, or which protects
minors from publicity. Moreover, the authority will be able to engage
in legal measures to block the access to illegal websites or to
initiate criminal proceedings.
25. In its approach of “controlled deregulation”, France was partly
inspired by the approach previously followed by Italy, where an
independent agency of the Ministry of the Economy (Amministrazione
autonoma dei monopoli di Stato) was set up following a reform in
2006.
However, only recently,
Italy was obliged to undertake a revision of its legislation in
order to comply with regulations of the European Union according
to which disproportionate restrictions on operators had been noted.
The United Kingdom, by far the largest online gambling market in
Europe, disposes of a Gambling Commission, but is still expected
to reinforce its regulation regarding foreign operators who are
often at the origin of illegal gambling sites.
26. With regard to the fight against gambling addiction, the efficiency
of certain restrictions remains to be verified through appropriate
monitoring. It seems, for example, that the French law presents
some substantial shortcomings and does not really seem to facilitate
the fight against illegal sites, of which there are an estimated
five to six thousand, representing a market of €4 billion. As certain
Internet service providers have indicated, there are many ways of
getting round blocked access to illegal sites. Furthermore, there
continues to be strong interest by gamblers in illegal sites because
of the potential winnings which are significantly higher than on
legal sites: the law as passed puts a ceiling on the return rate
to players – namely the percentage of bets that can be redistributed
– at between 80% and 85%, as opposed to 96% abroad.
27. Tax matters concerning online gambling are a particular concern
for public authorities. A comparative international study shows
that various countries use very different tax models for different
sectors of games of chance, including true tax systems and systems
involving fees. Moreover, the tax rates applied vary considerably
from one country to another.
France,
for example, is one of the few countries which raises taxes on the
basis of the total sum invested by gamblers and not of the revenues
drawn in by the game operators, which leads to a relatively high
level of taxation. The French tax system is therefore less favourable,
which does nothing to encourage players to turn to the legal market.
The tax on sports bets for example amounts to 8.8% in France against
3.8% in Italy. The international study also underlines the importance
of taxation of operators for financing activities of public interest
within a given country. The rapporteur considers that, in the future,
all member states concerned should examine to what extent the revenues
stemming from taxation could serve as a resource for financing the
prevention of gambling addiction and the fight against illegal practices.
28. Despite their definite increase over the past few years and
the extent to which they preoccupy public authorities from a legal
and fiscal point of view, pathological gambling and addiction to
online gambling have so far been studied very little as a social
phenomenon at European and national levels. Member states are just beginning
to realise the problem and its social implications. Following long-standing
requests by associations and scientific experts, a major study has
finally been launched in France by the Directorate General for Health under
the Plan for the Treatment and Prevention of Addiction (2007-11)
of the Health Ministry, which approached INSERM
for that purpose. The rapporteur
welcomes this new approach to the social dimension of the issue
and hopes that it will be followed by many countries in the future.
4. Conclusions – Recommendations
29. Online gambling, comprising games of chance and betting
on the Internet, have grown significantly in recent years, both
in terms of the opportunities on offer and the take-up rate. Many
factors result in an increased risk of developing online gambling
addictions. These gambling addictions are also common among vulnerable
groups (minors, people on a low income, isolated people, etc.) or
are combined with other problems (substance abuse, debt, neglect
of children, etc.), and therefore require particular attention from
member states in the form of social policies. Unless multilevel
action is taken, there is a risk that online gambling addiction
will increase in direct proportion to the increasing use of the
Internet in our societies.
30. The economic and social consequences of gambling addiction
– or pathological gambling – are considerable. However, the majority
of member states have yet to become fully aware of the problem and particularly
its social dimension. European and national regulations on the liberalisation
of markets and licensing contain manifest contradictions and loopholes,
leaving too much scope for illegal gambling sites to operate and
continue to attract gamblers. The problem is exacerbated by the
fact that certain illegal games accumulate risk factors for developing
a pathological gambling addiction.
31. The challenges posed by online gambling and pathological gambling
cannot be divorced from the legal, economic, political and social
questions raised by games of chance and money. Attempts to harmonise
public policies must therefore combine the different fields and
levels of action as well as individual and collective approaches.
Lastly, it is also essential to instil a responsible attitude among
online gambling site operators, particularly those that have been
given official authorisation. There is a sufficiently high level
of knowledge of the various consequences of pathological gambling
to develop measures to counter excessive gambling, such as limiting
gambling time, or ethical codes of conduct to be adhered to by operators
wishing to offer “responsible gambling”.
32. There is a lack of clarity in the current legal situation
of online gambling; indeed there are repeated contradictions. The
rapporteur therefore believes that efforts must continue to further
consolidate the legal situation of online gambling at national level,
and to move towards harmonisation at European level. He recommends
the “controlled deregulation” of gambling markets at national level,
as has taken place in his country, France, and believes that the
Parliamentary Assembly should encourage member states to set up online
gambling regulatory authorities along the lines of the Authority
for the Regulation of Online Games set up in France in 2010. According
to experts, this approach seems to be the most appropriate one when
it comes to tackling some of the social consequences of pathological
gambling, and to finding the right balance between responding to
the demand and protecting gamblers from addiction and criminal practices.
33. The first obstacle to any targeted co-ordinated public action
is a shortage of data on the problems raised by pathological and
problem gambling. In addition to the general prevalence of these
problems, the areas requiring further study, notably with a view
to orienting social policies in this respect, include the moment
when a gambler’s behaviour changes from recreational to compulsive,
the types of people most vulnerable to addiction (socio-economic
category, sex, age bracket), the social conditions most likely to
produce addiction, as well as associated types of addiction (substances).
34. To identify possible levels of intervention with respect to
pathological online gambling, the responsible national authorities
should at least base their activities on existing action plans for
the prevention and treatment of (substance) addiction. This approach
could be extended to cover the relatively new phenomenon of gambling
addiction, which could be treated under the existing arrangements
for substance addiction. Measures could be taken concerning hospital
or ambulatory treatment, training of medical staff for the support
of people displaying addictive behaviour (through public or charitable
action) as well as regarding the enlistment of gambling addiction
as a new area of research for the scientific community.
35. According to the voluntary sector, the most urgent steps to
be taken include toll-free telephone numbers or inclusion of a reference
to the danger of the typical path taken by gamblers (the three phases
of winning, losing and despair, according to the Custer theory)
and
the danger of the “first win” on all online gambling sites, and
action at the level of the banks and concerning loans taken out
by gamblers. In tandem with action taken with operators and individual
players, experts generally agree that more comprehensive measures should
be taken, beginning with national information campaigns on the dangers
of online gambling, and greater international co-operation so that
countries can take advantage of best practices in this field.