Access to credit provided by online sports betting companies, as well as inadequate mechanisms for limiting losses, is fuelling a dangerous increase in online sports betting and problem gambling according to a report released today by Financial Counselling Australia.
Launched by Senator Nick Xenophon, (read his media release here) the report, ‘Duds, Mugs and the A-List: The Impact of Uncontrolled Sports Betting’, is based on the experiences of financial counsellors and their clients.
Financial counsellors, who work in not-for-profit community organisations and assist people in financial difficulty, are seeing more and more clients, mainly men, with debts related to online sports betting. They are often encouraged to bet by the offer of “free bets” or “bonus bets”. Unsolicited credit may also be provided, often getting people into debt they cannot afford.
“We urgently need a ban on gambling with credit,” said Lauren Levin, Manager Policy for FCA. “Sports betting companies should not be able to give gamblers credit, then take them to court six weeks later when they can’t pay. It also means a ban on gambling by transferring funds from a credit card, payday loan or similar source.”
“Online sports betting magnifies the difficult issues already associated with gambling” said Ms Levin. “Compared to poker machines for example, people can lose much larger amounts of money, they lose it far more quickly and they lose it hidden in the privacy of their homes. One of the case studies in our report is of man who lost the entire proceeds of the sale of his home – $160,000 – in just four sports betting sessions.”
“Sports betting is portrayed as a bit of fun, but what financial counsellors are seeing is lives being destroyed. Many clients have huge debts and are groomed to get even further into debt. The end game is debt collection, bankruptcies, broken families, court orders to seize assets, forced home sales, and even sadly, suicide,” said Ms Levin.
FCA calls on the Federal Government to introduce national legislation to address the issue of access to credit for gambling, as well as meaningful harm minimisation measures to allow gamblers to control the amount of money they are prepared to lose.
We are encouraged by the position the Liberal Party took to the 2013 election: “Responsible gambling is all about people gambling within their means. Extending lines of credit to gamblers runs contrary to this principle and the Coalition will legislate to prohibit the practice.”
“At the very least, there needs to be a level playing field when it comes to the provision of credit. The banks comply with legislation requiring them to lend responsibly. For example, banks have to consider a borrower’s capacity to repay the loan, and fund ombudsmen schemes to resolve disputes. Yet sports betting companies are not obliged to do any of this,” said Ms Levin.
Senator Nick Xenophon will launch FCA’s report at Parliament House Canberra, 1pm Monday 17th August.
The report is available at https://www.financialcounsellingaustralia.org.au (2 pm 17 August)
· Some financial counsellors will also be available for media comment.
BACKGROUND – PROBLEM GAMBLING FACTS
· Indigenous Australians participate in commercial gambling much more than the general Australian population (https://aifs.gov.au/agrc/publications/indigenous-australians-and-gambling/export)
· Problem gambling involves a spectrum. Gambling is a significant public health issue, with around 80,000 to 160,000 (or 0.5 – 1.0%) of Australian adults experiencing significant problems from gambling and a further 250,000 to 350,000 (or 1.4 – 2.1% of adults) experiencing moderate risks that may make them vulnerable to problem gambling. Productivity, Commission. “Productivity Commission Inquiry Report”. http://www.pc.gov.au/. Australian Government.
· Compare with the prevalence of methamphetamine (including ice- around 2% of the population. Both are serious social issues. http://theconversation.com/are-we-in-the-midst-of-an-ice-epidemic-a-snapshot-of-meth-use-in-australia-39697
· The actions of one problem gambler negatively impacts the lives of between five and 10 others. http://www.problemgambling.gov.au/facts/
THE ONLINE SPORTS BETTING STORY SO FAR
Remember when bookie Tom Waterhouse became a familiar face on your TV? That moment also coincided with a 2008 High Court judgment in the Betfair case, that radically changed the gambling landscape. The court said that s 92 of Australia’s constitution guarantees that trade and commerce among the States shall be free. This ruling was the green light for betting companies to operate nationally, but set up in jurisdictions, such as the Northern Territory, where there were fewer and less effective regulations around gambling and gambling credit.
Between 2011 – 2013, there were a number of inquiries into the gambling industry; a review of the Interactive Gambling Act 2001, a Productivity Commission Inquiry Report into Gambling in 2010, and a Parliamentary Joint Select Committee on Gambling Reform 2010 – 2013. All these reports made recommendations for change, but most of the recommendations have not been acted upon. Reform has now stalled.