iGaming Daily

Ted (00:02.219)
And welcome everyone. And today we're joined by Daniel Waugh, partner of Regulus Partners and SPC's Steve Hoare, editor of SBC Leaders. And this morning we're going to be breaking down the UK Gambling Commission's report on young people gambling and its new data sets and statistics. So let me bring it over to you guys. Your first take on this report and

what it kind of brings to life.

Daniel Waugh (00:38.988)
Yeah, I am.

A lot of the results are fairly unexpected. The rates of participation by children in gambling remain pretty low. Certainly when you're looking at their participation in age restricted forms of gambling, it's about 6 % on a past year basis, which is relatively low. It is up a bit compared with last year. I suspect that what will grab the headlines when people sort of wake up to this and perhaps when people get over the US election and start focusing on this is that the

rate of problem gambling has gone up from 0.7 % of children last year to 1.5 % of school children this year. That is, within the recent range of estimates. So it's fairly similar with what we were seeing between 2018 and 2020.

Steve Hoare (01:32.04)
It sounds like a big rise though, doesn't it Dan?

Daniel Waugh (01:35.2)
Yeah, it does. But there's probably a few things that are worth saying about this. First of all, there's about 3,800 children in the survey. So what you're looking at is that that rises is about 35 children in the survey term. So you are extrapolating up from relatively small survey sample to try to get to a population estimate. The second thing is, and I think this is often misunderstood when people look at this particular survey.

is that the measure of problem gambling that is used in the survey is not the same that's used in the adult surveys. So it uses a specially adjusted screening instrument called the DSM4MRJ. And this uses much, much lower, softer thresholds for assessing problematic gambling. And we can see that in comparisons between the two, between the adult survey and the children's survey. So in the adult survey, the least endorsed item,

on the DSM is committing a crime because of your gambling. It is the most endorsed item in the children's survey. Now, why is that? Have we got loads of children running around, know, raiding corner shops in order to get money to go and gamble? No, it's because in the young people survey, committing a crime is classified as the use of any money that's not given to them specifically for the purpose of gambling. So if they use their pocket money, their lunch money, their bus fare to gamble,

then that is considered committing a crime. So that's an example of how much softer the thresholds are in the children's survey versus the adult survey. And I think this is relevant when you start to look at what children in the survey actually say they're gambling on, because very few of them are saying they gamble on age-restricted gambling products. The most commonly endorsed items are having private bets with their friends or family, and also playing cards with their friends or family. So these are the most common actions.

Ted (03:27.694)
Mm-hmm.

Daniel Waugh (03:30.98)
they do. So if you go to school and you play cards with your mates or you have a bet with your mates at school and you do that using your pocket money or bus fare, and this is something I used to do, I suspect that quite lot of other people used to do this, this is not a new thing, then you would be classified as committing a crime in order to gamble using the junior screen for problem gambling. And so it's actually relatively easy to get

a problem gambling classification using this junior screen far easier than it would be using an adult screen. And it's perhaps for that reason that when we actually look at the relationship between what activities people are doing and the problem gambling rate, it's actually very different to what we see in adult surveys. So the highest rates of problem gambling is seen actually in lottery products. So they're not observed in relation to things like online gambling. The vast majority of children who are classified as problem gamblers in these surveys,

do not gamble online and maybe possibly not even gambling on anything that's age restricted. So you can play lotteries or can play cards with your friends and that can classify you as a problem gambler in this survey.

Steve Hoare (04:40.296)
Yeah, it's worth pointing out, isn't it, that 27 % of children who gamble in this survey, I think 20 % of them are playing in arcades on, you know, penny pushers and things like that, which, yeah.

Daniel Waugh (04:53.516)
Yeah, yeah, these are crane grab machines. Yeah. So you're putting in a pound trying to win a fluffy, cuddly toy.

Steve Hoare (05:01.554)
And if they're using their pocket money to do so, they might have a problem gambling issue. Unless their pocket money's been given to them specifically for that purpose.

Daniel Waugh (05:06.315)
Well, it's...

Daniel Waugh (05:10.616)
Yeah, and I would argue actually that if you have a child that's being given money specifically by their parents in order to gamble, that's probably more concerning than the fact that their parents are encouraging them to do so. That would be slightly more concerning. So it's not to say that there aren't children who experience adverse consequences, but it's important to recognise that we're not talking about the same thing as we are talking about when we talk about adults with problem gambling. And we can actually see this when we compare with the health surveys. So the health surveys

the last four editions, I believe, we see 0 % problem gambling for 16 and 17 year olds. 0%. So the idea that you've got lots of children who are problem gamblers at the age of 11, and then at 16 it disappears is not plausible. So it's just the fact we're looking at different things here.

Steve Hoare (06:00.596)
To be fair, I don't think the gambling commission has kind of hyped up any of its findings at all, it? It's presented them very straight and...

Daniel Waugh (06:08.904)
Yes, and I think that's been a definite improvement. There was one, this is going back a few years, in a previous year when the survey was released, I think it was given as an exclusive to the Daily Mail. And there was a quote in there from somebody at the commission saying, we ought to be concerned about turning playgrounds into casinos or something like that. was some something, so try to whip it up a bit, try to whip up concern about this.

They've definitely been far more sober in their reporting of this. I think if there's a slight criticism of the Gambler Commission's handling of this is that it's pushed out this survey. It has made some efforts to make sure that it's reported responsibly, but it hasn't really proactively pursued that. And we have seen in previous years, I so far, what I've seen this morning, there's not been a lot of pickup on this year's survey, despite...

we're seeing is an increase in the reported rate of problem gambling. But in previous years, we have seen a lot of hysteria around this. commonly, it's been alleged that, you you've got these children who are problem gamblers, or often misleadingly described as addicts. And the online gambling industry generally gets the blame for this. And then when you dig into it, you say, well, actually, that's not really that plausible.

You've got to be careful about sort of looking at correlations and assuming that you can derive some sort of causality there. But if anything is a matter of concern coming out of these survey statistics that we look at, it sort of indicates the bigger issue might actually be lottery play, national lottery play. And we put them, Freedom of Information Act a couple of years ago, to ask what discussions the gambling commission had had about national lottery play and underage gambling and potentially underage problem gambling.

and they said none, which is sort of astonishing. So either means they're not digging into this in the way that we did, or that they're sort of saying, well, actually, it's perhaps better if we don't look at that.

Ted (08:18.091)
Okay, so I'm going to take this to Steve and you, Dan with your analyst hat and Steve with your editor's hat. How happy are you kind of on the boundaries of the research and the definitions of the research and what it implies in terms of exposure and experience and what are kind of the triggers for youth gambling? Steve, I'll take it to you.

Steve Hoare (08:42.184)
Yeah, well, was one of the things there that Dan touched on when he mentioned, you know, if parents were giving their children money to gamble, that would be very concerning. But that does touch on the issue of exposure. And while that was said in jest, I think that's one of the things that comes out of the survey that is potentially interesting is the influence of, I mean, God.

influence of family on children, who'd thought it? But still, as with all these things, these are worth noting but I don't think there's a lot to be alarmed about here.

Ted (09:24.171)
and that and experience.

Daniel Waugh (09:27.244)
Yeah, I mean, again, we come back to what is the thing we're concerned about here? Are we concerned about children gambling? Should children not be allowed to gamble? Well, that's not what the law says. The law actually does allow children to push machines in seaside arcades until relatively recently, 16 year olds were allowed to buy lottery tickets. So there is provision and also there's no law banning children from having bets with each other. There's no law banning children from playing cards with their family for money.

And it would be quite concerning if the law did ban those things, I would suggest, because that takes the state into people's homes. But interestingly enough, have been people like politicians like Ian Duncan Smith and co have fulminated about this survey in the past and said, we know the state needs to do something. Well, if you're genuinely concerned about children gambling and this 27 % figure that Steve mentioned, well, does the state start going into people's homes, start prosecuting?

adults for letting their children play cards. mean, that would be quite concerning here. So I think on the exposure point, we see an increase in this year's in terms of children saying they've seen gambling adverts. It is an increase on last year, but it's of broadly similar with where we were the previous year. So I think we've always got to be slightly careful in these surveys because you're dealing with relatively small samples. It's three to 4,000 in each year. So it doesn't take a lot.

to trigger what look like meaningful increases, which is also a good reason why if numbers shift down, and we had seen problem gambling rates shift downwards in two successive years, it's a danger if the gambling industry is too triumphal about that, because you will inevitably revert to the mean on these things, I think. There's some other questions in there about whether gambling, seeing an advert has ever prompted the child to gamble.

And I think in this latest survey, it's about 5 % of the school children survey said they'd gambled as a result of seeing an advert. Now that, again, sounds like it's something that could be dreadfully alarming, but we've not told what advert they've seen, and we're not told what they've then gambled on. And if you look into the data, which we have access to far more detailed data set in 2020. And when we look at that, we're able to see that, yes, there's a relationship, you know,

Daniel Waugh (11:55.748)
children saying they've been prompted to gamble, but hardly any of them were gambling on age-restricted activities. So it could be you see, and I'm not saying this is not necessarily a problem, but you could see an advert for a sports betting site, and then as a consequence of seeing that, or at least that's how you explain it, you then have a bet with your friend on the outcome of a football match. Now, that might be concerning, but it's not as though

It's not the same impression I think some people derive is that children are seeing gambling adverts and then going and gambling on regulated gambling sites. We know that's not true. We know that's not actually possible unless it's facilitated by a parent. And again, that's something we've seen in previous surveys where children are gambling underage, whether gambling on age restricted activities, it is almost always with the connivance of an adult, whether that's a parent or guardian, older sibling or some other adult.

Ted (12:54.251)
Yeah, because it's definitely a report that kind of you need to break down the activities and also you need to kind of understand the environments of where the gambling is taking place and what they're gambling on. You know, as adults, know, what are your kind of concerns? What are kind of the exposures of children gambling and what are the actual dangers that are presented in the report?

Daniel Waugh (13:25.957)
I think, you know, if you look into the report, you'll find if children are engaged in gambling, particularly if they're gambling underage, they're gambling on age restricted activities, that's naturally a source of concern because these are age restricted activities for a reason. So children shouldn't be doing it. Thankfully, relatively few children actually report doing this. If they are doing this, then it might mean that

it might be a precursor to harm in subsequent years. It could also indicate that their home life is not very good. It could indicate that their pursuit of academic studies is not very good. it can indicate there is a risk there that this has negative impacts on the child's development and the child's well-being. So we ought to be concerned about that.

Steve Hoare (14:18.132)
was a not there was a notable if in your in your sentence there down because I guess there is the question of children boasting when when answering these sorts of surveys you know it's like yeah I went down to the bookies and placed a bet on this gov

Daniel Waugh (14:42.262)
Yeah, and I think it's interesting because in a different context, we've written quite a lot about the new young people in gambling, sorry, the new gambling survey for Great Britain. And it has been claimed by some of the people close to that project that health surveys have under-reported problem gambling because of what we call socially desirable response bias, which is people not willing to say what they actually do. And therefore the claim is that problem gambling rates in the adult survey have been under-reported because people have not answered these questions candidly.

Now, actually, when we looked at the Young People on Gambling survey a couple of years ago, we found indications that the opposite was true in the Young People survey. And I'll give you an example of this. We found that about 20 % of those children classified as problem gamblers reported gambling on every single gambling item in the survey. So the survey contains, I think, 16 possible gambling activities, including placing a bet in a betting shop.

playing on a machine in a betting shop, online sports betting, online gaming, playing table games in a physical casino, playing bingo, et cetera. Now 20 % of these problem gamblers said they've done every single one of those activities in the previous year. Now it's possible. I think it's somewhat unlikely. We then looked at how many said they've done all of these 16 activities in the previous week.

and two thirds of that 20%, so about 13 % of these problem gamblers said they had done all of these things in the week prior to being surveyed. Now, that is, I would put it, that that is a level of engagement that even people like Ian Duncan Smith might hopefully consider to be implausible here. So I think we have to be careful about how we review these results. Surveys are always gonna be impacted by recall biases and other things.

But I remember from my days as a kid, which was in the last century, kids don't always tell the truth. And there may be bravado, there may be other things, but in certain survey years, we found that the reported rate of participation in casino gambling in a casino for 11-year-olds was higher than it was for 40-year-olds. The idea that you can go into a casino and find 11-year-olds sat at the blackjack table.

Daniel Waugh (17:06.578)
is outside of Pinocchio, that is just not realistic at all. So we have to be very careful about how we describe these results and really play, sort of be healthily skeptical. If something sounds implausible, if 2 % of 11 year olds in this country sitting down at a blackjack table in casinos.

Does that sound realistic? And if it doesn't, we really should approach these server results with a pinch of salt.

Ted (17:41.373)
So we live at a time of polls and surveys, reflecting back on the US election. Dan, what do you believe in terms of surveys and how they're published and how they're taken to the media? And what is the responsibility of the gambling commission in that activity or in that segment to ensure that everything's fair play?

Daniel Waugh (18:10.858)
Yeah, think surveys obviously have a role to play. They're not a substitute necessarily for hard data on what people actually do. There are all sorts of issues, as I said, with surveys in terms of recall bias, socially desirable response bias, selection bias, all these things. And I think what we would say is that, you know, no survey tells the truth. It can only ever tell

you about what some people say about what they do. And it's not, it cannot always be assumed to be representative of the population. So therefore, I think we've got to apply some healthy scepticism to what surveys tell us, but also really rely on those which have the strongest methodology. So if we take the health survey for England, for example, which has been described as gold standard of surveys in this country, that is based upon

relatively large sample, typically 8,000 adults. It is sampled on a random probability basis and it gets a relatively high response rate. So if you are asked to take part in the health survey for England, the default answer is yes, certainly prior to COVID. So 50, 60 % of people would say yes. So that means we've got reasonable comfort that this survey may be accurate because it's the default answer to participate.

If we look at the new gambling survey for Great Britain, which is an online survey, the response rate there has been about 19%. So the default response when you're asked to take part in the gambling survey for Great Britain is, I'm not going to do this. So we can have far less confidence that it's going to be representative. I think there are other issues that come into play. And particularly, think with the gambling survey for Great Britain is what we call topic salience bias. So a survey about gambling will attract people who are interested in gambling.

whether that's because they do it a lot or whether they have strong moral views about it. But in the same way that a survey about football would attract people who are in football, survey about crochet, it would attract people who like knitting, right? So we have this. And so I think when you look at the gambling survey for Great Britain, which is what the gambling commission is trying to use to replace the health survey, I think we should be healthily skeptical there because...

Daniel Waugh (20:33.928)
It's got a low response rate. Those people who do respond are unlikely to be representative of the overall population. They're more likely to be gamblers. They're more likely to be highly engaged gamblers. Therefore, they're more likely to have people who develop problems with gambling. And so the surveys won't tell you the truth. I think what the gambling commission has tried to sort of suggest with this new survey is that because no survey is perfect,

its survey is as good as the health survey. And I think that's a very slanted viewing of the subject. There is no reason to... If we think, as the Gammon Commission seems to be trying to suggest, that the health survey has under-reported from Gammon, that it is not an accurate survey, then that's really quite worrying because it pretty much means that most things the health survey measures are going to be wrong. So the implication is the NHS actually has no clue about the health of the nation.

which I think is a deeply concerning thing. I think it's actually quite irresponsible for the Gamma Commission to be suggesting that.

Ted (21:41.203)
And where does the publishing of this type of survey every year lead to? do we then have to view child gambling as a new area or a new critical area of gambling? And will it then lead to kind of more specific restrictions, more specific prohibitions? aren't...

Aren't the kids okay? Aren't we protecting them already with the laws that we have?

Daniel Waugh (22:11.516)
Yeah, so I think the survey serves a valid purpose. think it's, I mean, it was brought in originally on the back of the national lottery because it was originally run by, I think it was run by Oflot to begin with, because there was some concern that allowing 16 and 17 year olds to gamble might cause problems. So that's where it originates from. It is an important and valid area of inquiry to say actually, to what extent are children gambling, to what extent are children

experiencing harms from gambling. But we have to be, one, have to be healthy skeptical about what it actually shows us. But also you then look at how it's used. To be fair to the gambling commission, you know, they've not really found much objectionable in the past. And I suppose that's particularly because if you look at where this starts in 2011, the current time series,

In 2011, 23 % of children said they gambled on a past week basis. That's fallen to 7 % and that's been a fairly steady decline. It's notched up a bit between last year and this year. But what we have seen, if you believe the Young People in Gambling survey, it does indicate that as a nation, we've been relatively good at preventing underage gambling. So the underage gambling is...

was 6 % on a past year basis this year, it was 4 % the year before. Where it's happening, it's because adults are facilitating it. So I think we can be reasonably happy that the survey shows that the commission, the government, the operators, the whole sort of ecosystem, the regulatory environment is doing a relatively good job. I think one thing that is interesting is that, say,

The consistent finding has been that where underage gambling is taking place is because adults are facilitating it. That hasn't really seen a response. And I'm not suggesting that the state should coerce to adopt coercive powers there. But I do think more could be done, particularly by operators, to discourage their customers from sharing their online gambling accounts. I think more could be done to discourage adults from letting their children gamble on age-restricted activities.

Daniel Waugh (24:34.208)
We have seen our operators in other jurisdictions and the British Columbia Lottery Corporation is probably the best example. They have over a number of years really sort of gone out of their way to suggest to their customers that you really shouldn't let your children gamble if it's age restricted. So I think that's one bit where I think the survey data has been fairly consistent here. It's telling us the same thing every year and yet nobody's really doing anything about this. I think that is somewhere where something could be done. Beyond that,

I I suppose it depends on how alarmed you are about these problem gambling rates. And again, going back to the fact that this is not problem gambling as we know it in the adult survey, this is a softer definition. But if you really are concerned about it, then the gambling commission probably ought to be looking at the national lottery, because that seems to be where the strongest correlations are. And I'm not suggesting that the national lottery is necessarily causing problem gambling, but you would expect some curiosity on that point from the gambling commission.

Steve Hoare (25:35.054)
what might be an interesting further line of inquiry is how this interacts with the older age group of young adults, know the 18 to 24 or whatever, and is this a kind of like, there are there statistics from this survey that show you know what that cohort might become I guess?

Daniel Waugh (25:36.015)
But.

Steve Hoare (26:04.35)
But that's a kind of further line of inquiry, I think, rather than there's nothing we can draw out of that at the moment.

Daniel Waugh (26:14.4)
I lost you halfway through this thing.

Ted (26:15.385)
Yeah, I we did. Okay, actually, let's, I think I'm go and like just put my gonna wrap up question here. So, and just from here. So guys, look, we're heading in, we're at the close of 2020, 24 entering a new year. So Dan, do you think we're in a better platform to...

Steve Hoare (26:16.266)
okay.

Ted (26:40.949)
analyze any statistics about gaming, any of its impacts, and is there a better cohesion between the stakeholders, especially the industry and the regulator?

Daniel Waugh (26:53.292)
I think things have actually got lot worse and I'll make this in particular reference to the gambling survey for Great Britain. I think the young people in gambling surveys is, you know, there's nothing particularly new here. It's sort of as we've seen things go up a bit, go down a I think with the gambling survey for Great Britain, the commission set out with the aim of increasing faith and confidence in statistics. I think they've achieved the polar opposite here.

Ted (26:55.671)
Alright.

Daniel Waugh (27:20.46)
They have published a survey in the knowledge that it is likely to be inaccurate. Not just inaccurate, but they published really quite emotive, sensitive information about issues such as domestic violence and suicide attempts in the knowledge that the statistics are probably inaccurate. In order to believe the gambling survey for Great Britain, I'll sort of summarise it this way.

If you believe that that is an accurate survey and it represents a realistic picture of what's going on in gambling in this country, then you have to believe three things. You have to believe that every single official statistic that has preceded it over the course of almost a quarter of a century has been wrong. This is NHS data, it's gambling commission data, it's DCMS data. You have to believe everything that has gone before it is wrong. Second,

You have to believe the NHS doesn't have a clue about the health of the nation, certainly the mental health of nation. You have to believe that the NHS has materially understated the mental health of people in England. And then third, you have to believe that the industry data is wrong because we've been able to take data on actual customers from operators, including one monopoly operator. And we compare that with the estimates of participation from the Gambling Survey for Great Britain and they're miles apart.

So you also have to believe that the industry's own data about its own customers, including one monopoly operator, is wrong. Or you have to believe there's this massive unlicensed market that we didn't know existed and which didn't appear in previous surveys. So I think my concern with the gambling survey for Great Britain is that it's so obviously flawed, or at the very least, there are such obvious questions about its reliability. And yet the gambling commission's really adopted an attitude of

head down, ignore the criticism, plough on, we'll get there in the end. And that unwillingness to face up to what are fairly significant problems, and I would say unarguable problems with the survey, the unwillingness to engage with those concerns is going to do enormous damage to the Gambit Commission, to its relationships with licensees and other stakeholders, and to confidence in official statistics. I think if the Office for Statistics Regulation

Daniel Waugh (29:41.176)
sort of green lights what the Gamley Commission's done here, then you really have to start to question the whole process of collecting and publishing official statistics.

Ted (29:53.464)
Dan, thanks so much for joining Steve and I. This has been iGamingDaily. Thank you. Goodbye.

Steve Hoare (30:02.132)
Thanks guys.

Daniel Waugh (30:02.616)
Thanks, then.