How the gambling industry tempts young Aussies

Australia has a gambling problem, but the industry is still seeking new ways to lure the young.

Based in a small office in inner Sydney, Myles Blasonato believes he may be on the brink of solving one of the gambling industry's biggest headaches.

Mr Blasonato is creative director of a company called Royal Wins.

His team of young software designers have just created Kash Karnival, a lurid-looking smartphone app, whereby users take part in online video games to win prizes such as Apple laptops, projectors and luxury mobile phones.

One game involves catching cartoon images of sushi falling from the sky. Another is as simple as running an anime figure through a maze.

The gambling element is that to play these games, players buy credits — the equivalent of laying a bet — and only if they succeed in the set tasks are they rewarded.

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"Imagine a traditional phone game like Candy Crush or Temple Run and the player places a bet based on how well they do in the game," Mr Blasonato says. "But this game is built in a way that allows us to control how often the player wins or loses, so we can guarantee a rate of return."

It may sound innocuous but this fusion of video games and gambling has a purpose. Yes, Australia may have a mass addiction to pokies but it's an addiction apparently harboured by the older generation. The young — the millennials — don't spend too much time these days in places like RSLs or a James Packer casino.

"Royal Wins has conducted [its] own research into the playing profiles of millennials and their hesitance to participate in chance-based gambling and the typical repetitive casino games," the Royal Wins website says.

"[But] millennials show a significant interest in casual skill games that offer more entertainment for their time and give them greater control of the outcome."

Or, as Mr Blasonato himself says: "With casinos you don't really see that level of engagement or entertainment that young players enjoy, but our app has an average playing age between 25 and 35.

"Our innovation is to create a game that attracts millennials by giving them the opportunity to bet on their own skill."

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Look through the global stats on gambling and its still a shock when you see what is going on in Australia.

Per capita, our spend is the highest in the world. The figure dwarfs all other countries with the exception of Singapore — it's nearly double the spend in Ireland and Canada, and triple that of the US and the UK.

A big chunk of the Aussie outlay still happens inside casinos. But about half of the $1241 we spent per head on gambling in 2014/15 went into the machines. Or put in population terms, Australians lost about $11.6 billion on poker machines in 2015 — more than all other forms of gambling combined, according to last year's Australian Gambling Statistics report.1

As a rough comparison, the government spent about $20.3 billion on Medicare over the same period.

"It's not controversial any more to suggest that pokies are any less addictive than cocaine," says Dr Charles Livingstone, Monash University senior lecturer in the department of epidemiology and preventive medicine.

"They work the same way, but in some ways pokies are a more pure example — they are really just addiction machines."

But he adds: "We know that poker machines are right at the most harmful end of the spectrum of gambling-related harm, but millennials have for the most part avoided them.

"If you look at the generations of young people who grew up playing video games, to have a mobile app that combines elements of those games with gambling would be pretty diabolical."

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His fear is that the bright lights and high speed of online games like Kash Karnival may stimulate the same neurological pathways as poker machines, and trigger the same addictive response.

"The characteristics of gambling that cause most harm are ready availability, high impact and high speed of operation, which is why pokies are far and away the most damaging form of gambling in our society," he says.

And another addictive element shared between social gambling games and pokies is the stimulus of the ‘near miss'. This is the moment when the gambler sees some, but not quite enough, winning symbols appear to hit the jackpots.

It is these ‘near misses' that entice the player to keep going, and can trigger brain stimuli almost as powerful as an actual win, Dr Livingstone says.

GAMBLING IN AUSTRALIA

While much of the political noise is made about the growth of online sports betting, pokies are still the biggest money spinner for the Australian gambling industry.

The machines were first introduced to NSW in 1956, though they were a rarity in the other states until the 1990s.

But today, Australia has more than 20% of the world’s pokies — one for every 100 people in the country. In disadvantaged areas, such as the NSW Central Coast, that becomes one for every 70 people.1 In 2015, Australians lost around $11.6 billion in pokies, $2.8 billion on horse racing, $1.7 billion on lotteries and $814 million on sports betting.2 But a Victorian Government study published the same year revealed that fewer than 10% of those aged under 24 had gambled in 2014. The average age of problem gamblers is now in their early 40s.3

The concept of using video games as a mechanism for gambling remains relatively new. One issue that confronts any industry expansion is the law and the philosophical debate about what constitutes chance.

Gambling law expert Jamie Nettleton, who is a partner at the law firm Addisons, says “social casino games” tread a fine legal line.

“Basically, the federal law prohibits any online game that includes an element of chance for which you pay and get a prize”, he told Australian Doctor. “Even if an online casino game was based on skill and it required players to pay before they get a prize, that would still be illegal in my view.”

References on request.

Dr Sally Gainsbury (pictured left) is the deputy director of the University of Sydney’s gambling treatment clinic, and has spent the past 10 years researching what policies and practices can be used to prevent and minimise gambling-related harms.

She agrees with Dr Livingstone about the waning attraction the younger generation has for casinos.

"There is the millennial problem, where the younger generation don't appear to be engaging with gambling games, so there is an attempt to attract them by making them more like the video games they are used to," she says.

In the past, this has meant the gambling industry attempting to dress up poker machines with themes from popular culture — such as the game show Wheel of Fortune.

"Now we have a similar thing with stuff like Mario-Cart and Nintendo on slot machines designed for younger people, and games which have that involvement of skill and that sense of control to allow young people to engage with those products," she says.

At the same time, casinos in Las Vegas are beginning to introduce multiplayer video games based on the consoles that so many millennials played with during their childhood.

The casino simply adds a gambling element that pays the winner of the game. However, Dr Gainsbury warns that Australia's legislative regime — at least one meant to restrict the potential damage on the new generation enticed by the new approach — is slow to catch up, particularly with the online and smartphone technology being employed.

"The consumer regulation for internet gambling is grossly outdated," she says. "It was created in 2001 and the protections are totally inadequate."

"I've heard from people who have spent vast sums of money on these games. One person I spoke to had spent $15,000 on what appear, at first glance, to be free apps."

The legal grey area in which social gambling gaming exists leaves players with very little support when things go wrong, according to Dr Gainsbury's research.

The psychology lecturer has uncovered evidence that social gaming can lead problem gamblers to spend greater and greater amounts on the real thing.

"For some users with gambling problems, social casino games can work as a trigger to exacerbate gambling," she says. "We have heard from people who essentially blame social casino gaming for causing their gambling-related problems."

In a survey of around 1600 internet users published in the journal Computers in Human Behaviour last year, Dr Gainsbury found almost one-fifth of social casino game users had gambled with real money.2

And more than half of all respondents to the same study agreed the games had been designed to encourage gambling, and many took the bait — a sign that the apps can act as a form of indirect advertising, Dr Gainsbury says.

"We have limited evidence explaining why players migrate across but an important feature of these games is they have similar design, but inflated payout rates, to poker machines," she says.

"As a result people overestimate how likely they are to win, which could lead to higher gambling losses and persistence in gambling."


Back at Royal Wins, Mr Blasonato insists he has put in place responsible gaming mechanics to protect Kash Karnival's 50,000 young players, who just want to be given a chance to win back some money.

"We feel like when you look at it, a traditional video game without chance isn't ethical," he says.

"Kids are spending money on Candy Crush without telling their parents, but at least here they get something back."


Geir O'Rourke is an Australian Doctor Group reporter.

References

  1. Queensland Government Statistician's Office. Australian Gambling Statistics 32nd Edition. Queensland Government, Brisbane, 2016.
  2. Computers in Human Behaviour 2016; 63:59-67.