THE GAME IS RIGGED: ADDICTION AND SUPER-PROFITS IN THE GAMBLING INDUSTRY – REBEL

As new laws to regulate the gambling industry are imminent, Dave Murphy explains how the
industry and its super-profits are built on ensuring addiction remains prevalent.

“The casino is highly addictive — the online casino — like slots are the crack cocaine of gambling.”
Stewart Kenny, Founder and Former CEO Paddy Powers

Long delayed legislation to regulate gambling and establish a Gambling Regulator looks like it may be
about to reach the final stages before becoming law. This has resulted in a flurry of lobbying from
the gambling industry’s big corporations.

The current laws around gambling mainly date back to the 1930s and the 1950s to a time of betting
at racetracks or in betting shops. Since then the gambling industry has radically changed with
technology – firstly, with the growth of telephone betting in the 1990s and 2000s; then online
betting in the 2000s and 2010s. Now the dominant form of gambling is on smartphones where by
downloading an app gives 24/7 access to casinos and other gambling in your pocket.

The lack of regulation has seen even Fianna Fáil Minister for State, James Brown, describe the
gambling industry as a “wild west”. Stewart Kenny, a founder and former CEO of Paddy Power, said
“governments for the last 20 years have been totally negligent” allowing the industry to put
“gambling into every pocket” and creating a “major social problem”.
Bookmakers try to buy-off politicians

Legislation of this type has long been spoken of. As far back as 2010 a report for the government was
published, entitled Options for Regulating Gambling. This resulted in plans for a Gambling Control
Bill (2013) being announced by Justice Minister Alan Shatter.

The 2013 Bill proposed many of the same plans as the 2022 Bill including a regulator. These
proposals were welcomed by addiction services who even before 2013 were catering for a growth in
people seeking treatment for gambling addiction.

But in the face of massive lobbying by the gambling industry, the horse racing industry and threats
from bookmakers to cut jobs, the 2013 Bill never saw the light of day and was successfully killed off.
Since then the horse racing industry, who rely on bookmakers and state-funding to survive, and the
gambling industry have worked together to keep it off the agenda or to water it down. In 2021 the
Irish Bookmakers Association established their voluntary Safer Gambling Code to make it seem like
the industry was taking action in the face of pending regulation.

In 2022, politicians were exposed for being wined and dined at Punchestown races by bookmakers
and the 2023 Lobbying Register shows that bookmakers and the racing industry lobbied politicians
over 60 times regarding the 2022 bill.

What are they afraid of?

The Bill itself, while a major departure from the current set-up, is relatively tame. It establishes a
Regulator to oversee the sector, creates a problem gamblers register, establishes safeguards to
prevent problem gambling and a social fund to deal with the side effects. These are all things which
the bookmaking industry will say it is generally in favour of.

With any piece of regulation there are obviously fines and penalties for people who break the rules
but the real issue the industry has with the Bill is the restrictions on advertising. Over the last few
years, gambling ads have seeped into every ad break in sporting events, into the events themselves
through sponsorship and have successfully changed the image of gambling from the smoke filled
betting shop to a normal, everyday, fun pastime.

Under the new Act ads will only be permitted on television after 9pm in the evening, and people will
have to opt-in to receiving ads online. It also limits the advertising and sponsorship of sporting
events. It also intends to ban things like free bets, free hospitality and VIP treatment to entice in new
customers or to keep existing customers hooked.

The issue with this for the bookmakers is that, like the cigarette industry, they actually need
addiction and need to actively encourage and create new addicts to survive and increase their super
profits. Without people who have some form of gambling problem the turnover of bookmakers
would be almost halved and their profits would take a heavy hit.

Without addiction they have no profits

Problem gambling has always existed. The first meeting of Gamblers Anonymous in Ireland took
place in 1968. It has largely been ignored by governments and seen as an individual problem rather
than a societal one. The issue was left to fester and bookmakers given free reign to squeeze as much
money as possible out of people.

In Ireland, the super-profits which these companies make and the societal damage done needs to be
highlighted more. People gamble over €5 billion annually – this is almost €9,500 every minute of
every day. Because the issue has been ignored for so long, studies into the level of problem gambling
have only begun to be conducted in recent years. The latest and most in-depth was carried out in
2023 by the ERSI and shows the scale of the problem.

The levels of problem gambling are much bigger than previously assumed, it isn’t a small fringe who
get addicted and seek treatment. Rather this is a large-scale societal problem, where 3.3% of the
population or 130,000 people are problem gamblers. A further 7.1%, or 279,000 people, show
moderate evidence of problem gambling (moderate can mean they’ve had to borrow money to
gamble or because of gambling). While a further 15% (590,000 people) show at least one sign of
problem gambling. People in their 30s, the first ‘smartphone generation’, show the highest
prevalence of problem gambling, while problem gambling among teenagers is growing.

In financial terms, the ‘average person’ who showed no signs of problem gambling spent €11 a week
on gambling. People with some evidence of problem gambling spent €42 a week, those with
moderate evidence of problem gambling spent €70 a week; while problem gamblers spent €231 or
€12,000 a year.

Now we reach the key point – 28% of the bookie’s turnover comes from the 3.3% of problem
gamblers. This increases to 47% of their turnover when we include people with moderate signs of
problem gambling.

That’s 47% of their turnover comes from the 10% of the population who are problem gamblers or
show signs of it!

These figures get to the crux of the gambling industry’s opposition to regulation – they actually rely
on addiction and have to actively foster it to maintain their business model and profits. It is not in
their interests, despite their words to the contrary, to have ‘safer gambling’. So, of course they will
fight tooth and nail to prevent their ads being blocked or have limits placed on how they can keep
people losing money to them.

The game is rigged

The successful advertising campaigns by the bookies have allowed them fundamentally change their
image into being entertainment companies and gambling into a pastime.

During big betting events, Cheltenham week in particular, the public ‘face’ of these companies will
be wheeled out to update us on ‘the battle between the punter versus the bookies’. The idea being
if you’re a ‘smart punter’ with a little bit of insight or knowledge you can ‘beat the bookie’. But in
truth the game is rigged in favour of the bookie.

Firstly, the image of the poor bookmaker just trying to make a living doesn’t really exist anymore.
These companies are now mainly massive corporations out for one reason only – to make profit – just
like I-RES REIT or Coca Cola. The only difference being that their method of getting your money is
gambling. For example, Paddy Power Betfair, SkyBet – three of the more popular brands are all
owned by the one company Flutter. Entain owns Ladbrokes, Coral, BetMGM and numerous online
casinos.
Secondly, despite their public face, these companies are not fun-loving operations. Instead, they are
cold data-mining operations. They use statisticians and data analysts to build up a profile on how
much each individual customer may be worth to them, called Future Expected Margin. Based on
their analysis of your betting behaviour, what sports or casino games you prefer and they are likely
to make the most profit from, they will then target advertisements or offers.

They won’t want you though, if you win. A customer who bets selectively, or just happens to go on a
winning run, is likely to have their account limited. The company will introduce a ‘stake factor’ on
the account, which means that while a normal account may be able to bet say €100 on a particular
outcome, this user may only get €10 or less. The intent is to tell the person ‘we don’t want your
business’.

Thirdly, there have also been complaints about bookies installing spyware, such as iesnare, on
smartphones when you download their app. This is supposedly part of anti-money laundering and
fraud procedures, but some believe that it is part of their attempts to root out winners. Professional
gambler, Caan Berry, wrote about it ‘’By recording your internet history the bookies can quite clearly

see what kind of user you are, profiling you in the process. If they suspect you’re a bit shrewder than
the average user, they may impose betting restrictions.”

In the long run, the house always wins.

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