As Congress considers regulating online gambling in the United States amid concerns that Internet gaming may lead to higher gambling addiction rates, a new Harvard study says that fear may be unfounded.
Harvard Medical School’s Division on Addiction has issued the results of the most extensive and comprehensive study ever conducted on online gambling, and its findings show that the 24/7 availability of online poker and other games do not increase gambling addiction.
The study was based on information collected from the player databases of Bwin and PokerStars and tallied the betting purchases of millions of online casino gamblers, poker players and sports betting fans over a two year period. Analysis of the data showed that at least 95 percent of online gamblers used moderation in their betting habits. Only one to five percent exhibited addictive behavior.
The data from Bwin, an Austria-based gambling site, provided more than 4,000 Internet casino gambling case studies for examination. Over a period of nine months, the average player placed bets only once every two weeks and lost around 5.5 percent of the money they wagered. Another 40,000 Bwin sports bettors were studied, and it was found that gamblers averaged 2.5 bets every fourth day, betting a median of $5.50 each time.
Harvard also analyzed data from a University of Hamburg study that looked at the habits of online poker players. More than two million online poker player transactions from PokerStars were studied over a six month period. The average gambler played poker for only 4.88 hours over that time and paid less than a dollar per hour in rake.
Harvard’s report backs up the 2007 Nottingham Trent University study sponsored by industry self-regulatory body e-Commerce and Online Gaming Regulation and Assurance, also known as eCOGRA. The eCOGRA study found that online poker players were largely balanced and responsible, going to gaming sites two to three times per week, gambling for one or two hours per session and paying around $1.20 an hour in rake. The report also noted that players took an average of only six percent of their bankroll to the table.
The Harvard study also supports the findings former Harvard Division on Addiction staffers Howard Shaffer and Ryan Martin wrote in a 2011 paper regarding gambling addiction. They wrote that, despite dire predictions that online gambling would lead to large increases in addiction, problem gambling has remained steady over the past 35 years. In fact, the percentage of compulsive gamblers has slightly declined from seven in 1,000 to six in 1,000 during that time.
Shaffer and Martin’s paper also concluded that the massive increase in the number of casinos in the United States has not lead to higher addiction rates in the general public. They state that 75 percent of people who become addicted to online gambling seem to be predisposed to obsessive behaviors, because they already suffer from other addictions, such smoking, drinking or drug abuse.
The Harvard research study is significant because it was conducted independently and not sponsored by pro-gambling or anti-gambling groups who have a vested interest in the results. This is especially of note given the current political climate in the U.S. regarding online gambling.
The political and legal landscape of Internet gambling was dramatically altered in 2011 when the Department of Justice backed away from its previously held position that the federal Wire Act of 1961 made all iterations of online gambling illegal. This change freed states to allow some forms of online sports betting and other Internet gambling.
In the fall of 2013, the states of New Jersey, Delaware and Nevada launched regulated Internet gambling with the anticipation of big revenues. Supporters of online gambling believed that the expected tax windfalls would entice other states to quickly follow suit, and they had an impressive army of pro-Internet betting politicians, lawyers and lobbyists helping them further their cause.
However, the bright future online gambling advocates envisioned became dimmer when billionaire casino owner Sheldon Adelson announced he was “willing to spend whatever it takes” to stop Internet gambling from succeeding.
Adelson told Forbes magazine, “I won’t go into the business because it’s a moral issue for me.”
Adelson used the argument that online gambling will create more gambling addicts as a major point in his campaign against it. He claims Internet gambling will endanger young and poor Americans who may see betting as a way out of debt, particularly from the burden of student loans. He says that, unlike his land-based casinos, Internet gambling has no safeguards to prevent minors or those who have drug or alcohol problems from betting away their homes.
Moral and humanitarian concerns aside, Adelson, who is the chief executive of casino company Las Vegas Sands and America’s 11th richest person, believes that online gambling would ultimately prove “suicidal” for the casino industry in the United States, destroying hundreds of thousands of jobs. He says that Internet betting may be profitable for land-based casinos in the short term, but the longview is grim, because online gambling will eventually eat away at the profit margins of land-based businesses.
At first, few took Adelson’s anti-online gambling initiative seriously. He, after all, failed to sway the 2012 presidential election to Republicans despite contributing millions, and, because his fortune was made on the backs of gamblers, his moral objections to Internet gambling may seem hypocritical. However, things look different now. Adelson has put his vast wealth behind a bipartisan campaign that is turning the tides in his favor. He has convinced fellow Las Vegas billionaire Steve Wynn to change his pro-Internet gambling stance, and he brought former online gambling supporter and Democrat Willie Brown over to his side.
Also, New Jersey’s online gambling numbers have been dismal. Although New Jersey Governor Chris Christie predicted last year that Internet betting would bring at least $180 million to his state, Bloomberg News has reported New Jersey is only on pace to make around $12 million.
Whatever the ultimate fate of Internet gambling in the U.S., the results of the Harvard study should ease public concerns over its mental health dangers.