Presentation at the EASG-conference in Warsaw Sept. 22, 2000 by Göran Wessberg, Svenska Spel

(Video- Games Unlimited)

This is the gaming world we face today.

Is there too much gambling in today´s society? Are there too many games offered on the market? If so- does this mean that there is too much problem gambling in our countries as a result of this?

If the answers to these questions are yes – whom are we then to blame? – the players, the gaming operators or maybe even the state?

This will not really be a presentation but rather some reflections on the contemporary gambling world.

Some figures- statistics are always tricky and can be used the way you want – but this is an impressive figure. According to Richard Miller´s handbook on casinos people around the world wagered 1 trillion US$ just in casinos last year. More than half a million people worked in these entertainment temples. In USA only, 325.000 were employed in the 450 casino premises.

Or look at the figure for the sales in all state or state-controlled lotteries in the world! These figures are very accurate. 129 billion US$! This would make gaming and gambling the 12th, maybe even the 10th biggest industry in the world.

But does gaming have a bigger share of the discretionary dollar now than before? This does not seem to be the case for lotteries in stable markets with a long liberal gaming policy to look back at as in Scandinavia. In Sweden e.g. we have spent 3% gross (or 1.5% net) on gambling rather constantly for the last 25 years in spite of all new gaming products and services. In the US on the other hand where lotteries and casinos were banned for a long time we see a drastic increase in how much people spend on games and gambling of their disposable income.

The lotteries show a very slow increase – last year it was only 1.4% worldwide but what about other forms of games and gambling?

What is gambling really?

We know it all started with dice many thousands years ago in most cultures.

We know that a kind of chess was played in the Egypt of the Pharaohs.

In the old religious Indian script Rig-Veda there is a section on gaming and problem gambling- the oldest mentioning in a written text of homo ludens.

We have read in the Bible how Moses apportioned land by lots at Sinai to make a fair distribution of the holy land.

We have heard stories of crazy betting and bookmaking in ancient Rome.

People cheated at cards in medieval times as seen in many paintings.

Lottomania struck many European countries in the 17th and 18th centuries until politicians and the church had enough and banned them in many countries in the mid-19th century.

In North America it is said when the white man arrived that males in some Red Indian tribes gambled away everything they had including their wives.

Some 100 years ago casinos attracted the rich in Europe, later on horse betting grew in popularity as well.

And what is the situation like today?

These are the types of games we usually talk about:

-CASINOS

There is a casino explosion and a drastic change in the casino world as we know e.g. from Las Vegas but we also have the Red Indian Tribal gaming in the USA as well as the Riverboat Casinos. There are casinos in an increasing number of countries – soon even in rather restrictive Sweden- leaving only Ireland, Norway and Albania without casinos and of course we have the multitude of cybercasinos.

-NUMBERS GAMES

Lotto has been the sure cash-cow for almost 50 years, the biggest lottery game in the world but now suffers from sagging sales in a mature market which are met by stake increases, more frequent draws, higher jackpots, new matrixes and multijurisdictional cooperation.

-SCRATCH TICKETS

These celebrated their 25th anniversary last year. Rapid success at the start but they have already hit the ceiling as it seems although there are desperate efforts to make them more attractive in size, in design, in prizes, in TV Game Shows and lately through win-for-life concepts.

-PULL-TABS

These are also called break-opens and they are very simple games, mostly sold by charities or non-profit organisations at dances, charity events and sports activities. They have enjoyed a great demand in many US communities lately but are hardly of any great economic impact.

-PASSIVE LOTTERIES

They have been around for 500 years- a dying race maybe but they are still of great importance in many societies in South Europe, in South America, in Japan and in Africa.

-SPORTS BETTING

These are offered in the form of pools, 1x2 or toto and were introduced in 1923 but they had their peak from the 50´s onwards for some decades. Apart from some Eastern European and Scandinavian countries they seem to lose grounds in spite of the introduction of Wednesday pools, half-time betting, PC- and system-betting etc.

- ODDSET

The pools are now quickly being replaced by the faster and more challenging bookmaking game Oddset that especially attracts young male punters.

- HORSE-BETTING

A special kind of bookmaking, popular in some countries is horse-betting (PMU, TAB, ATG, Toto) increasing in Europé and Asia but facing a crisis in Australia and USA where they have tried to combat this by installing VLTs at the race tracks to stimulate on-track betting as well.

- SLOT MACHINES

- But you would find even more slot machines. It is where we see the biggest increase in the gambling business – they are obviously also the major concern for media, the public and the politicians especially in Australia and North America but also in some parts of Europe.

So far, so good – or so bad if you look upon all these options as a threat to public health and the root of evil in modern society.

But is this the whole truth?

Some researchers, when talking about problem gambling, also want to include the COMPUTER GAMES into the gaming market. As we all know you can be as obsessed by these as by games where you pay a stake. There is also growing evidence that the traditional lotteriers are moving in the direction of these games- suffice to mention Loto Québec´s CD-rom game Treasure Tower. If we count these games in, we will have a very big gaming market.

So we will, if we also take all the AWPs into acccount. For you who are not familiar with acronyms AWP stands for Amusement With Prizes, machines that can seem harmless to you where you apparently only win minimal prizes in the form of tokens.

These can however be exchanged for money- this being the case although not exactly legal in Sweden and even more so in Japan where the Pachinko game by far is the biggest on the market.

There is only one treatment center in Sweden for problem gamblers. Recently they also opened their doors for STOCK EXCHANGE addicts. A soaring stock exchange market has attracted many non-professionals who do not know all the hazards and tricky elements of big business. Many have been tempted to leave their jobs to make a fortune, as they hope, on selling and buying shares. Many of these so called day traders show similar symptoms and behavioural patterns as gaming addicts. Here, maybe a comparison with traditional gambling is not out of place.

Finally I would also like to say some words about STATE BONDS. In some countries these are included in the figures for the gaming market, in others not. The reason for this of course being that there are random draws on their serial numbers and that these draws are conducted and supervised in the same way as we do with Lotto.

Now is this enough?

No, of course not. We have to say something about so called NAMBLING as well. As you might be able to guess this stands for net gambling or internet gambling. This is at the moment largely a jungle or a buccaneer world with little controll of the same kind that affects the kinds of games that I mentioned earlier on.

A small fraction of this market is operated by state lotteries as e.g. in Iceland, Finland, Sweden and Austria but represents a very small part of their total online sales. It is therefore hard to say if these operators have attracted much popularity and caused much damage Since there are as some say more than 800 sites offering casino games, sports bookmaking and other games online – not to forget all these online lotteries that now offer free participation in Lotto in return for looking at some ads- there must obviously be a market for them. We could guess that they are extra attractive in states and provinces where many forms of gambling are prohibited.

Some words about ILLEGAL GAMBLING. We do not know the whole extent of this business, that is quite clear. We know for sure that it is quite big in some American and Asian markets. We estimate it to be rather low in Australia and Scandinavia where most games are being offered in the open. We assume that illegal gambling is one of the major causes for problem gambling but we realize that we know too little about illegal gambling in all its bearings. We in the lottery business therefore welcome the initiative of the European Lotteries to organise a European Gaming Convention on this issue next year in Brussels.

Is there anything that I have forgotten to mention in order to give you a complete overview of the gaming industry today? Yes, there is definitely something lacking that forms a big part of our daily life – shows, games and contests in TV and other media.

For many years we have had programs on TV such as Jeopardy, Lingo and the 64.000 dollar quiz show. We in the lottery business have so far not looked upon them as any threats or as being part of the lottery market but as a form of entertainment. With the oncome of Who Wants To Be A Millionaire? And similar programs this has changed. They now offer almost as high top prizes as does Lotto. In some jurisdictions these TV shows are now classified as lotteries! There are also more and more contests in magazines and newspapers with jackpot prizes.

Now for the question in the title of my presentation. Is the player to blame for being a problem gambler?

According to Jan McMillen, professor at the University in Sydney, the classification pathological gambler indicates that there is something wrong with the individual – that he (or she) has his (or her) responsibility for what is happening, this may be because of mental disposition, personal circumstances, heritage, brain damage, bad influence or just bad luck. So many have said – and I think it is true to some extent that we have to admit that we are responsible for our own life and behaviour.

That the blame is on the part of the player has also been the view shared by most lotteries for a long time but this is slowly changing.

So are the lotteries or other gaming operators to be blamed?

None of my lottery colleagues would ever admit that their numbers games, instants or 1x2 would be any cause for alarm. I know of no CEO or MD who really has been in close contact with a gaming addict, maintaining of course that these games are the harmless ones compared to casinos, slots, horse racing etc.

I say this in spite of the fact that North American Lotteries have slogans such as ”Remember it is only a game and ”Play with moderation” on their tickets, coupons, posters or billboards. This they usually do because they are state lotteries and feel more obliged than many private operators to do so. I have, however, noticed a slight change in attitude lately and there are some reasons for this.

Let me take the Swedish example of the development of a modern lottery – Svenska Spel, the result of a merger three years ago of the two state lotteries Tipstjänst and Penninglotteriet.

- In 1897 Penninglotteriet, a passive draw was introduced. Nowadays not very popular in Sweden but caused people to stand in lane for hours in the 20´s – and people still do that in the south of Europe for example for El Gordo in Spain

- In 1934 Stryktipset – football betting was introduced. This was because there had been so many attractive illegal sports betting going on for more than 10 years that the Government had to step in to quench the thirst for betting.

- In 1980 Lotto was reintroduced. There had been a Lotto game in Sweden from 1770 until 1840 when it was banned for moral reasons. Today Lotto is the world´s biggest numbers gamesd and still makes people go crazy for huge jackpots or rollovers in Italy, UK or USA.

- Six years later we had the first instant ticket called Triss. It is still there, looking exactly the same and being our number one game with its win-for-life concept that is very much liked by the Swedes- but not so much that we could talk of addiction.

- In the same year, 1986, the first bookmaking game online was launched called Oddset. There had been a lot of betting on foreign sports betting operators but the Oddset game was much more accepted since it was secure, it was thrustworthy it was local. Aimed at small winnings and small stakes it was no problem at the beginning but in the last years alarm bells have been ringing when it has been found out that retailers let adolescents who have not become of age are allowed to wager.

- -In the early 90´s a daily Keno game was added to the portfolio

- and some years later a 5-minute Keno called Lotto Express. Researchers and the Gaming Board protested, claiming that all fast games are dangerous and that this game would lead to a lot of problem gambling. Our research had however indicated that this was a rather harmless game and that it would not attract the young or make people to be standing in the retailers for hour after hour. We were right. This is our smallest games and most of our opponents (not the researchers however) have now admitted that we were right.

- In 1995 the Government proposed that VLTs should be permitted. Now we protested. We said that this game could really cause problem gambling. No one in Parliament listened, the bill was passed and we were given the task to operate this game. Rightly so, but it has had its adverse effects just as we predicted, partly also due to a bad legislation which did not give us total controll of gaming machines.

- Two years ago, the Government once more just said that we had to introduce a new kind of games, Greyhound Racing, to benefit the horse racing federation in Sweden. This started just some months ago so we have not so far noticed any problem gambling in the race tracks but it is of course a popular bookmaking game.

- Last but not least, once more Parliament has stepped in and said that now we will have casinos and it your job at Svenska Spel to operate them.

Although very few lotteries have the same broad scope of products as svenska Spel, many gaming operators are moving in the direction of diversifying their portfolio, offering e.g. 5-minute Keno, instants, bookmaking, some even VLTs and horse betting.

Clearly lotteries then have to admit that suddenly they are part of problem gambling although many of us still question the criteria used to classify players as problem gamblers and also the figures produced by researchers. We have been and we are still sceptical about some so called findings and results from the Gaming Institutes since they are contradicted by many, many years of market studies and surveys in the lotteries, not to mention our expertise. We also think that we could contribute to more accurate research by sharing this with the academics.

I think we also have to admit that our omni-presence in media, our advertising, our broad gaming portfolio and our sophisticated marketing methods at the retailers could contribute to problem gambling and especially to relapse for those who have been treated and cured.

I would say this is definitely our responsibility and we therefore have be much more concerned with problem gambling either being forced to do so by owners/government/parliament or voluntarily e.g. after having studied reports on compulsive gamblin or having listened to what researchers have to say.

We have been given all kinds of statistics and numbers how many people who are problem gamblers or pathological gamblers, who is at risk, what other problems they also might have (comorbitidy) and we have been given indications which games that are more alarming than others BUT

- there is no real evidence that e.g. all quick games are risky

- that all young persons and adolescents will give in to gameomania

- that casinos always produce an additional number of problem gamblers.

We have not learnt from the researchers the best way to treat this problem in the lotteries and in the casinos. More work has been done with the latter, much less with the other gaming operators. Here is definitely a demand for more research and much more cooperation in the future.

Now for my concluding question- is the state to be blamed for too much gambling. I spoke to Jan McMillen last week as I said. She pointed out to me that if you use the term pathological gambler you put more or less all the blame on the player. If, however, you call it problem gambling you want to say that the state and the gaming operators usually working under state controll, ownership or license – have their big share of the responsibility.

If the Government as I said before orders a lottery or another gaming operator to introduce or operate new kinds of games that could lead to problem gambling for some of its citizens – it should be and must be a moral dilemma for the responsible politicians.

If a state or a parliament or a government demands that a lottery should yield 15 billion pounds for good causes over their license period as will be the case in the UK- they definitely have to face possible accusations of increasing the total marketing and other efforts to sell more that the lotteries or other gaming operators have to undertake in order to achieve their goals.

Last week all major Asian and Australian lotteries met for a conference in Singapore on how to measure achievements in the lottery business. All present unanimously stated that there was a much higher pressure now on them from their owners – all of them were state-controlled lotteries – to produce more revenue at a lower cost. The challenge for the lotteries is to do this without causing more problem gambling.

The way, however, to get more revenue is to introduce faster games, more innovations suchjas internet, more sophisticated marketing, more efficient and loyal retailers, making the players wager more by introducing loyalty or bonus schemes and being omnipresent. At the same time they have to stress that they do this for the best of society, for the good causes.

But if the good causes turn out to be bad causes, that gaming and gambling cost more than they produce and that the criticism from anti-gambling organisations or Gamblers Anonymous or from researchers and regulators will gain in weight and importance, governments have to take a much clearer and more distinct stand on gaming and gambling and to work out a strategy or policy for their respective jurisdictions.

This will be even more important today with all the threats and challenges not only from new technology but also from derugalation and from increased cross-border betting.

In conclusion: we all do have a responsibility but definitely at the end of the day the state or the government has the final responsibility for the gaming and gambling situation in their country.

But this is not my final word. The government and the lotteries also have to consider why we are in business. We cater for the needs and wishes of homo ludens. In general 98% of all those who have a flutter do it for fun, for excitement, for a thrill or for a dream.

They take a small risk at bad odds to maybe – maybe – win a prize. Let us not forget that when we talk about problem gambling.

Remember Shakespeare´s words: All the world is a stage where we are merely players…

Thank you for listening.

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