IoS Investigation: Britain's gambling addiction

Addiction soars as online gambling hits £2bn mark

As the online business business approaches the £2bn mark and bookies seek to lure in new punters, the number of Britons at risk of becoming addicted is growing rapidly. Paul Gallagher reports

A huge increase in gambling addicts will make Britain's obsession with online betting a £2bn business. New evidence reveals that the number of people in danger of becoming problem gamblers has reached nearly a million, while hardcore addicts have doubled in six years to almost 500,000. MPs are considering legislation to try to reverse the trend, as online companies vie for bigger shares of the market with blanket advertising and introductory offers.

Key to the strategy which has led to some of the companies enjoying massive growth since online gambling was freed up by Tony Blair's government in 2005 is recruiting new consumers from middle-class professions and among women. Last Friday at Gloucester Crown Court, Jack Keylock, 22, from Cheltenham was jailed for 18 months. He resorted to burglary to pay debts run up while gambling online.

Dr Henrietta Bowden-Jones, founder and director of the National Problem Gambling Clinic, said more women are gambling than ever before. "The proliferation of online gambling has brought into the home an activity that was historically male-dominated."

Betting firms have not given up on their traditional working-class betting shop users but want to maximise profits with the proliferation of fixed-odds gaming machines. This claim is disputed by the Association of British Bookmakers Ltd.

The Labour MP Kelvin Hopkins said problem gambling was now as serious an issue as alcoholism. "I have been very concerned about alcoholism for a long time, but problem gambling is just as bad. I have two close friends – , university-educated people – who are compulsive gamblers and now every penny they have has to be controlled by their wives.

"I have said in Parliament that the fixed-odds machines that you get in betting shops are like crack cocaine, but so is this [online gambling]. At least with other forms of gambling you have to go out of the house to do it. You can't lose your life savings playing bingo, but on the internet you can go on and on."

About nine million Britons will gamble online this year. Campaigners are worried that proposed legislation is too late to reverse the situation. The industry has ballooned in the 20 years since Microgaming Software Systems Ltd, based in the Isle of Man, created the world's first online casino. The company now has a turnover of hundreds of millions of pounds a year with a website that boasts of being "the world's largest provider" of online gaming software. Ladbrokes and 32Red are among the 120 online casino operators it provides with software.

But the roots of the explosive growth can be traced back to 2005, when the Blair government, in a spirit of liberalisation similar to giving the go-ahead for 24-hour drinking, passed the Gambling Act, which allowed companies to advertise in the UK. It extended the permissions to the EU and a number of other "white-listed" countries, specified by the Culture Secretary, including the Isle of Man, Alderney and Tasmania.

As with 24-hour drinking, few predicted the consequences. Almost anything can be gambled online 24 hours a day: from lottery tickets, bingo, slot machine-style games, poker and football pools to almost every sport in the world. The UK online gambling industry's value is expected to burst through the £2bn barrier for the first time in 2013, and over the next four years the European industry will grow by 34 per cent. Even in an age of austerity, business is booming.

Ironically, the Government misses out on increased tax revenues that should come from this growth as the vast majority of big-name bookies are based overseas. George Osborne announced last year that the online industry would be taxed on a point-of-consumption rather than a point-of-supply basis, a change set to come into force by December 2014. In the meantime, health and social services have to deal with the bulk of problems resulting from compulsive gambling.

The Gambling Commission, set up under the Act to regulate gambling, carried out its most recent national survey in 2010. In addition to the 450,000 problem gamblers in the UK – up more than 200,000 since 2007, with an average debt of £17,500 each – the British Gambling Prevalence Survey (BGPS) found that another 900,000 people were at "moderate risk" of becoming problem gamblers, while 2.7 million more displayed "some risk factors".

Campaigners and support groups find it increasingly difficult to cope. Visitors to GamCare's website rose by more than 100,000 in 2012 compared with 2011. The charity predicts it will answer more than 44,000 calls this year – a 22 per cent rise on 2012. Of people needing GamCare's help last year, 34 per cent of all callers had problems with the internet, second only to betting shops (46 per cent). While 18 per cent used the internet as their primary location in 2011, this rose to 23 per cent last year. More than 20 per cent of the callers were under 18.

At last year's quarterly interim management statement updates, Ladbrokes chief executive Richard Glynn boasted that his company offered up to 800 football matches per week for "'bet in play", leading the market with more games to gamble on than any rival. He said companies like his "use advertising now in a very sophisticated way".

Charities have been critical of celebrities glamorising gambling through endorsements. The Australian cricketer Shane Warne promotes gambling to his one million Twitter followers through his @Warne888 handle – he signed a lucrative deal in 2008 with the 888 Poker group to represent the company at events around the world. Ray Winstone became the face of bet365 and regularly features at half-time during games urging people to "bet in play, now".

Last month, the Government published the Gambling (Licensing and Advertising) Bill, amending the 2005 Act. As representatives from the RGA, Care and the Sports Betting Group prepare to give evidence before MPs on the Culture, Media and Sport Select Committee on Tuesday, when it begins hearing from witnesses on the proposed Bill, Microgaming, one of the industry's pioneers, launched its latest games with "big winning opportunities" and "no payline constraints".

The Government believes the new proposals are "an important step to help address concerns about problem gambling". A spokesman for the Department for Culture, Media and Sport said they hoped the new Gambling Bill will be introduced in the third session.

Case study: 'It's promoted on TV as harmless fun. For me, the fun ended long ago'

I am a 48-year-old woman who started gambling online in 2008 after a bereavement. I sought help in 2010 and am still battling to control this problem.

Another TV advert for online bingo catches my eye. It promises an online community to chat to, while playing bingo. I log on and join. Before long, I'm pumping more money than I can afford into this new friend who is turning into a foe. I set myself a realistic limit, but then I am bombarded by emails. Before I know it, I have joined more sites. Often, at first, you win reasonable amounts. However, you have to wager from five to 20 times the deposit amount before you can withdraw. And the chat community is there while you are playing cash games. But the free ones have no chat, so no community. Once bingo gave me escapism from problems, but it has now evolved into a problem itself. I am getting help to quit this addiction, because that is what gambling is: an addiction that is promoted on TV as harmless fun. For me, the fun ended a long time ago.

As told to Paul Gallagher

Case study: 'Gambling is all too easy to embark upon … The bookies always win'

Jack Keylock, 22, came from a respectable family and had a good job, earning £25,000 a year. On Friday, thanks to online gambling, he began an 18-month prison sentence.

Racked by debts run up online, Keylock from Cheltenham, resorted to burglary. In one raid he pilfered £35,000 of property, including watches and medals.

Judge Jamie Tabor QC said at Gloucester Crown Court: "Gambling is all too easy to embark upon these days, probably because of the advertising on TV and the amount of internet gambling available to anyone unwise enough to make use of it. The bookies always win."

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