The evolving market structures of gambling: case studies modelling the socioeconomic assignment of gaming machines in Melbourne and Sydney,Australia

The expansion of gambling industries worldwide is intertwined with the growing government dependence on gambling revenue for fiscal assignments. In Australia, electronic gaming machines (EGMs) have dominated recent gambling industry growth. As EGMs have proliferated, growing recognition has emerged that EGM distribution closely reflects levels of socioeconomic disadvantage. More machines are located in less advantaged regions. This paper analyses time-series socioeconomic distributions of EGMs in Melbourne, Australia, an immature EGM market, and then compares the findings with the mature market in Sydney. Similar findings in both cities suggest that market assignment of EGMs transcends differences in historical and legislative environments. This indicates that similar underlying structures are evident in both markets. Modelling the spatial structures of gambling markets provides an opportunity to identify regions most at risk of gambling related problems. Subsequently, policies can be formulated which ensure fiscal revenue from gambling can be better targeted towards regions likely to be most afflicted by excessive gambling-related problems.     

Problem Gambling and Gaming Machine Density: Socio-spatial Analysis of Three Victorian Localities

This paper examines the debate about possible relationships between problem gambling and accessibility to electronic gaming machines (EGMs), in the context of the Victorian Government's policy that imposed a ‘cap’ on EGMs in disadvantaged communities. Using GIS (Geographical Information Systems), the spatial distribution of social disadvantage in three ‘capped’ localities was compared with the spatial distribution of gaming venues and patterns of concentrated EGM expenditure during 2001–2005, including seasonal trends. Research revealed different relationships between spatial and social categories in the study localities, indicating the need for more systematic local area analysis. This research raises questions about the limitations of conventional methodologies and regulatory strategies based on simple measures such as gaming machine density. We propose improvements to the methodology to better measure the changing level of local supply and demand for machine gaming.     

Too close to home? The relationships between residential distance to venue and gambling outcomes

Although gambling accessibility is generally viewed as a multidimensional construct, few studies have successfully untangled the specific role of spatial accessibility in determining gambling outcomes relative to other forms (i.e. temporal, social and psychological). In this paper, we explore the association between gambling outcomes and the distance travelled from a person's home to their most-frequented gambling venue. To this end, we conducted a geocoded mail survey of 7044 households in the Northern Territory of Australia. We employed a geographic information system to calculate the network distance from each household to all visited electronic gaming machine (EGM) venues (n = 64). Multivariate regression modelling revealed that, when adjusted for individual and neighbourhood-level characteristics, frequency of venue visitation and gambling participation were inversely related to residential distance from venue. There was no additional distance effect for problem gambling. Spatial accessibility of EGMs is an important determinant of gambling risk and should be explicitly considered by regulators.     

The Gambling Environment and Gambler Behaviour: Evidence from Richmond-Tweed,Australia

As opportunities to gamble proliferated rapidly during the 1990s, accessibility to gambling facilities has been cited as a factor driving increased gambling consumption. However, research examining this relationship is limited. Most assessments have tended to be at a broad regional rather than a local level. Furthermore, explanations for why greater access encourages increased gambling activity have been inadequate. Using the framework of time-geography, this paper outlines new empirical evidence to assist in clarifying relationships between the accessibility to and consumption of gambling. Data on gambling behaviour were obtained from 1,018 persons in seven residential centres of the Richmond-Tweed region of NSW, Australia and compared to local provision of gambling facilities. In this study, availability of gambling opportunities—measured here by electronic gaming machines (EGMs) per capita—is often reflected in differences in gambling activity by the local population. It is concluded that accessibility to EGM facilities at a particularly local level is an important factor driving their use.     

An Initial Investigation of Individual Rate-of-Play Preferences and Associations with EGM Gambling Behavior

Electronic gambling machines (EGMs) show a strong association with gambling problems. The high speed of gaming offered by modern EGMs allows playing numerous games in a short span of time, which is thought to contribute to attentional distraction, increased spending and prolonged play. However, the relationship between EGM speeds and potentially risk-related gambling behavior remains unclear. We introduce a novel approach to investigating the role of gaming speed in EGM gambling behavior by examining ‘individual rate-of-play’ (I-ROP) during simulated EGM gambling. A community sample of male regular gamblers (N = 72) played virtual slot machines in pairs offering sequentially adjusted game speeds towards the estimation of a behaviorally expressed preference speed, or I-ROP. This initial experiment aimed to explore the variability of I-ROPs during simulated EGM gambling, and examine behavior while playing EGMs at speeds relative to their I-ROP. Estimated I-ROPs ranged from less than one half second to over seven seconds and were negatively associated with cognitive ability, but not related to problem gambling severity, impulsiveness, or gambling-related cognitions. Subsequent gambling sessions on EGMs offering individually calibrated faster and slower gaming speeds were associated with greater and reduced risk-related gambling behaviors respectively. I-ROPs represent a potentially informative construct for exploring influences of gaming speed on gambling behavior, and may lend insight into potential risk-related behavior an individual vulnerability with respect to commercially available EGMs that warrants additional research.     

Gambling Revenues as a Public Administration Issue: Electronic Gaming Machines in Victoria

Gambling activities and the revenues derived have been seen as a way to increase economic development in deprived areas. There are also, however, concerns about the effects of gambling in general and electronic gaming machines (EGMs) in particular, on the resources available to the localities in which they are situated. This paper focuses on the factors that determine the extent and spending of community benefit-related EGM-generated resources within Victoria, Australia, focusing in particular on the relationships between EGM activity and socio-economic and social capital indicators, and how this relates to the community benefit resources generated by gaming.     

Problem Gambling and the Circumstances Facing Older People

Local gambling venues are an important contemporary context for older people's gambling in many parts of the world typically being more accessible to this segment of the population than traditional, centralised gambling venues, such as casinos. This study, undertaken in South East Queensland, analyses older people's electronic gaming machine (EGM) behaviour and motivations, specifically in the context of licensed social and recreational clubs-a popular local gambling venue in many parts of Australia. The study gathered data via a postal survey of 80 managers of licensed clubs, interviews with Gambling Help services and a survey of 414 people aged 60+ who regularly play EGMs, self-administered on site at local clubs. The analysis undertaken suggests that certain age-related circumstances of older people-such as being without a partner, having a disability that impacts on everyday activities, having a low annual income, and no longer participating in the workforce-are associated with higher overall levels of motivation for playing EGMs and greater reliance on EGMs to meet social, recreational and mental health needs. Over a quarter of the older people surveyed (27%) reported drawing on their savings to fund their EGM gambling. Certain categories of older people, including those who were without a partner and those with a disability, were more likely to report drawing on their savings to fund EGM play and betting more than they could afford to lose, pointing to age-related vulnerabilities older people may experience to the negative impacts of gambling given the greater likelihood of their dependency on smaller, fixed incomes. The explanatory contribution of a range of demographic and motivational variables on problem/moderate risk gambling status was computed via a logistic regression model. Younger age (60-69), male gender, single marital status and being motivated to play EGMs to experience excitement and to win money all emerged as significant predictors in the model.     

House edge: hold percentage and the cost of EGM gambling

Price in commercial gambling is effectively the house edge of the game. For electronic gaming machines (EGMs), house edge is the hold percentage. The paper tracks changes in hold percentage for club and hotel EGM gambling in Australia. We use real gambling turnover and revenue data to show that hold generally falls over time, save for the State of Victoria between 1993 and 2009. In Victoria, hold fell during the roll-out phase of the sector, before rising steadily. We examine local level data, finding that hold varied considerably by gaming operator across the period, before converging. The unique owner/operator corporate duopoly that existed in Victoria is posed as a potential explanation for aggregate price changes. We then calculate estimates of the monetary value of changes in hold percentage. We find increased hold can lead to substantial monetary redistributions of gamblers' stakes toward the house and away from gamblers. Policy options to protect gamblers from the unfairness of undetectable price rises are discussed, including the possibility of a more tightly regulated hold percentage, a tax on windfall profits derived from raising hold, and tying game identities to particular hold percentages.     

An empirical analysis of the use of the Herfindahl-Hirschman Index in assessing the distribution of electronic gaming machines and its socio-economic implications

Sargent and Holmes (2014) proposed the use of the Herfindahl-Hirschman Index in assessing the effects of the distribution of electronic gaming machines (EGMs) on expenditure and tax outcomes for local areas. This paper reports empirical analysis on the use of the Herfindahl Hirschman Index (HHI) in this application. Comparative testing of HHI and population-based measures, such as EGM density, was conducted using EGM data from the New South Wales State Government (Australia) for the period 1995 to 2005. The analysis also compares the use of the commonly used Australian Bureau of Statistics’ (ABS) Socio-Economic Indexes for Areas (SEIFA) Index of Relative Socio-Economic Disadvantage, with the Index of Education and Occupation. The socio-economic elements comprising the latter index are acknowledged as being relevant to the assessment of gambling impacts. The results indicate that the use of a concentration measure such as the HHI may augment the use of existing measures in policy development and localized decision-making on distribution of gambling facilities.     

Hierarchy of Gambling Choices: A Framework for Examining EGM Gambling Environment Preferences

This paper presents the Hierarchy of Gambling Choices (HGC), which is a consumer-oriented framework for understanding the key environmental and contextual features that influence peoples’ selections of online and venue-based electronic gaming machines (EGMs). The HGC framework proposes that EGM gamblers make choices in selection of EGM gambling experiences utilising Tversky’s (Psychol Rev 79(4):281–299, 1972). Elimination-by-Aspects model, and organise their choice in a hierarchical manner by virtue of EGMs being an “experience good” (Nelson in J Polit Econ 78(2):311–329, 1970). EGM features are divided into three levels: the platform—including, online, mobile or land-based; the provider or specific venue in which the gambling occurs; and the game or machine characteristics, such as graphical themes and bonus features. This framework will contribute to the gambling field by providing a manner in which to systematically explore the environment surrounding EGM gambling and how it affects behaviour.     

Gambling Behaviour and the Prevalence of Gambling Problems in Adult EGM Gamblers when EGMs are Banned. A Natural Experiment

In this article, findings of a panel study among former EGM gamblers are discussed. The data were collected in two waves during 2007, and 1293 people, 18 years or older, participated. The background for the study was the Norwegian ban on EGMs from 1 July 2007, and the aim was to investigate how this ban affected gambling involvement and problem levels in the sample. The analysis shows that gambling participation, gambling frequencies and gambling problems were reduced after EGMs disappeared from the market. There was no indication of the development of an illegal EGM market, or of substitution of EGMs with other types of gambling. A reduction in other types of gambling is interpreted as an indication of synergetic effects between games. Reduced gambling participation among the most active EGM gamblers, and among risk gamblers, shows that the reductions in gambling availability had an effect even on highly involved gamblers.     

Electronic Gaming Machine Gambling: Measuring Motivation

Electronic gambling machines (EGMs) are known to be a particularly risky form of gambling (Petry. Addiction 98(5):645–655, 2003). It is vital that researchers and clinicians are aware of factors which could lead to people having problems with this form. Gambling motivation is one such factor. This study developed a measure of EGM gambling motivations based on the results of qualitative research conducted with EGM problem gamblers and experienced counsellors (Thomas et al. Int J Mental Health Addiction 7:97–107, 2009). A community based sample of 232 females (M = 29.60 years of age, SD = 15.41 years) and 123 males (M = 29.64 years of age, SD = 12.29 years) participated. Exploratory factor analysis extracted three motivational factors indicating people gambled on EGMs to escape, for its accessibility and for the social environment. Gambling to escape and for its accessibility had substantial positive correlations with frequency of EGM gambling and gambling problems. Social environment correlated less well with these indicators of excessive gambling. Correlations between factors suggested the accessible, social experience offered by EGM venues increases their appeal as a means of escape. The new subscales were internally consistent and demonstrated good evidence of validity. This new measure will facilitate future investigations into the relationships between gambling motivations, other aetiological factors and EGM problem gambling.     

Gambling Participation,Expenditure and Risk of Harm in Australia, 1997–1998 and 2010–2011

Gambling-related harm results primarily from financial losses. Internationally Australia continues to rank as the largest spending nation per capita on gambling products. This would suggest that Australian gamblers are at disproportionately high risk of harm despite almost two decades of industry scrutiny and regulation, and investment in research, treatment and education programs. However, declines in participation rates, per capita expenditure, household expenditure, national disposable income spent on gambling and problem gambling rates have been cited as evidence that fewer people are gambling, that gamblers are spending less, and that gambling safety in Australia has improved. The current study investigated these propositions using national population and accounts data, and statistics from Australia’s two population-representative gambling surveys conducted in 1997–1998 and 2010–2011. Despite a falling participation rate the study found no real change in the number of people gambling overall, and increasing numbers consuming casino table games, race wagering and sports betting. Further found were increases rather than decreases in average gambler expenditure, overall, and across most products, particularly electronic gaming machines (EGMs). Potentially risky levels of average expenditure were observed in both periods, overall and for race wagering, casino table gaming, and EGMs. Changes in the proportion of income spent on gambling suggest risks declined overall and for race wagering and casino table gaming, but increased for EGMs. Finally, while problem gambling statistics were not comparable between periods, the study found double the number of moderate risk gamblers previously estimated for 2010–2011 amongst the 2 million Australians found to have experienced one or more gambling-related problems. The findings have implications for public health policy and resourcing, and the way in which prevalence and expenditure statistics have been interpreted by researchers, government and industry in Australia and elsewhere.     

Gambling with Stimulus Payments: Feeding Gaming Machines with Federal Dollars

In late 2008 and early 2009 the Australian Federal Government introduced a series of economic stimulus packages designed to maintain consumer spending in the early days of the Great Recession. When these packages were initiated the media suggested that the wide-spread availability of electronic gaming machines (EGMs, e.g. slot machines, poker machines, video lottery terminals) in Australia would result in stimulating the EGMs. Using state level monthly data we estimate that the stimulus packages led to an increase of 26 % in EGM revenues. This also resulted in over $60 million in additional tax revenue for State Governments. We also estimate a short-run aggregate income demand elasticity for EGMs to be approximately 2.     

Gambling on Electronic Gaming Machines in Germany: An Age-Period-Cohort Analysis

To provide insights into etiological factors of gambling at the population level, it is critical to document the separate contributions of biological aging, period influences, and birth cohorts on observed temporal trends in gambling. This study investigated age, period, and cohort effects on prevalence rates of electronic gaming machine (EGM) gambling in Germany. We used data from a series of repeated cross-sectional surveys from the Federal Centre for Health Education covering the period 2007–2015. A total of 53,005 participants were surveyed about their past-year participation in EGMs. Using the intrinsic estimator, we disentangled the separate effects of age (16–17 to 64–65 years), period (2007, 2009, 2011, 2013, 2015), and birth cohort (1941–42 to 1997–98). Age effects were highest for those aged 18–33 (p < 0.001). Period effects were highest in 2013 and lowest in 2015 (p < 0.005). A significant increasing birth cohort effect was evident in cohorts born between 1985 and 1998 (p < 0.005). Implications of these results are discussed with regard to the vulnerability of younger ages to gambling, period changes in the regulatory framework of Germany, and differential cohort vulnerability of the Millennial generation due to early-life video gaming experiences.     

Facilitating Responsible Gambling: The Relative Effectiveness of Education-Based Animation and Monetary Limit Setting Pop-up Messages Among Electronic Gaming Machine Players

Although most gamblers set a monetary limit on their play, many exceed this limit—an antecedent of problematic gambling. Responsible gambling tools may assist players to gamble within their means. Historically, however, the impact of such tools has been assessed in isolation. In the current research, two responsible gambling tools that target adherence to a monetary limit were assessed among 72 electronic gaming machine (EGM) players. Participants watched an educational animation explaining how EGMs work (or a neutral video) and then played an EGM in a virtual reality environment. All participants were asked to set a monetary limit on their play, but only half were reminded when that limit was reached. Results showed that both the animation and pop-up limit reminder helped gamblers stay within their preset monetary limit; however, an interaction qualified these main effects. Among participants who did not experience the pop-up reminder, those who watched the animation stayed within their preset monetary limits more than those who did not watch the animation. For those who were reminded of their limit, however, there was no difference in limit adherence between those who watched the animation and those who did not watch the animation. From a responsible gambling perspective, the current study suggests that there is no additive effect of exposure to both responsible gambling tools. Therefore, for minimal disruption in play, a pop-up message reminding gamblers of their preset monetary limit might be preferred over the lengthier educational animation.     

The Impact of Jackpots on EGM Gambling Behavior: A Review

This paper reviews literature on how jackpots influence Electronic Gaming Machine (EGM) gambling behaviour. Most of the available evidence addresses the motivational effect of the mere presence of EGM jackpots on play, as actual wins are relatively rare for individual gamblers. The review identifies a distinction between rational, biased and irrational motivations that attract people to EGM jackpots. The evidence suggests that EGM jackpots should generate additional consumption on EGMs above machines that do not have such lottery-like features. Rational motivations are likely to lead to consumer surplus, whereas biased and irrational motivations are likely to contribute to excessive consumption. Moreover, there is evidence that excessive gambling consumption is strongly associated with gambling-related harm. Future research should identify how the structural features of different types of jackpots; such as progressive, deterministic, hidden, mystery, linked and wide-area jackpots; may differentially appeal to rational, biased and irrational gambling motivations. Jackpots are common feature of EGM games, and therefore it is important to have a better understanding of how jackpot features influence play on the machines.     

Access or adaptation? A meta-analysis of surveys of problem gambling prevalence in Australia and New Zealand with respect to concentration of electronic gaming machines

It is widely believed that greater availability of electronic gaming machines (EGMs) has led to increases in problem gambling prevalence and related harms. It has also been proposed that individuals and populations adapt to exposure over time and that prevalence rates plateau or decline, even in the face of increasing availability. This study examines both hypotheses using a combined data set of 34 problem gambling surveys conducted in Australia and New Zealand since 1991. Strong statistically meaningful relationships were found for an increase in prevalence with increasing per capita density of EGMs, consistent with the access hypothesis and supported by no evidence of plateauing of prevalence with increasing density of EGMs. A decrease in prevalence over time with availability held constant is also evident, partially consistent with adaptation. It is likely that both forces are at work simultaneously, with implications for appropriate policy responses to gambling harm minimisation.     

Impact of Mode of Display and Message Content of Responsible Gambling Signs for Electronic Gaming Machines on Regular Gamblers

Harm-minimization strategies aim to reduce gambling-related risks; however, minimal evidence supports the effectiveness of current strategies involving the placement of warning signs in gambling venues and on electronic gaming machines (EGMs). This qualitative replication study evaluated the differential effect of pop-up messages compared to static signs and the content of messages on EGMs on recall, thoughts, and behaviors assessed during the session and at 2-week follow-up. In Study 1, 127 regular EGM gamblers (male = 97, mean age = 20.3) recruited from a university student population attended a laboratory where they were randomly assigned to play a computer-based simulated EGM analogue displaying signs that differed by (a) mode of presentation (pop-up and static) and (b) message content (informative, self-appraisal, and control/blank). In Study 2, an identical methodology was used but included the use of a simulated EGM within an in vivo gaming setting with 124 regular EGM players (male = 81, mean age = 44.1). Results from both studies showed that pop-up messages were recalled more effectively than static messages immediately and at 2-week follow-up. Pop-up messages reportedly had a significantly greater impact on within-session thoughts and behaviors. Messages encouraging self-appraisal resulted in significantly greater effect on self-reported thoughts and behaviors during both the experimental session and in subsequent EGM play. These findings support the effectiveness of pop-up messages containing self-appraisal messages as an appropriate harm-minimization initiative.     

Risk Factors for Gambling Problems: An Analysis by Gender

Differences in problem gambling rates between males and females suggest that associated risk factors vary by gender. Previous combined analyses of male and female gambling may have obscured these distinctions. This study aimed to develop separate risk factor models for gambling problems for males and for females, and identify gender-based similarities and differences. It analysed data from the largest prevalence study in Victoria Australia (N = 15,000). Analyses determined factors differentiating non-problem from at-risk gamblers separately for women and men, then compared genders using interaction terms. Separate multivariate analyses determined significant results when controlling for all others. Variables included demographics, gambling behaviour, gambling motivations, money management, and mental and physical health. Significant predictors of at-risk status amongst female gamblers included: 18–24 years old, not speaking English at home, living in a group household, unemployed or not in the workforce, gambling on private betting, electronic gaming machines (EGMs), scratch tickets or bingo, and gambling for reasons other than social reasons, to win money or for general entertainment. For males, risk factors included: 18–24 years old, not speaking English at home, low education, living in a group household, unemployed or not in the workforce, gambling on EGMs, table games, races, sports or lotteries, and gambling for reasons other than social reasons, to win money or for general entertainment. High risk groups requiring appropriate interventions comprise young adults, especially males; middle-aged female EGM gamblers; non-English speaking populations; frequent EGM, table games, race and sports gamblers; and gamblers motivated by escape.