Gambling across borders

A blog about the productive life of risk

Posts Tagged ‘Gambling industry

Canadian experiments

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I’m grateful to Luke Clark for his response to my article in International Gambling Studies.  Luke recently left Cambridge to set up the Centre for Gambling Research at UBC (University of British Columbia). The centre is funded by the Province of BC government and the British Columbia Lottery Corporation (BCLC). For non-Canadian readers, BCLC conducts and manages gambling across the province.

Luke is at the coal face of making a particular funding structure work, trying to put money raised from gambling to good use. His insights are invaluable.

The centre is an example of the blurred boundaries between the gambling industry and government identified as a source of ‘influence and bias’ by Blaszczynski & Gainsbury (2014). According to Griffiths and Auer, ‘It is our experience [in relation to writing consultancy reports rather than research reportds (sic)] that it is work commissioned by government agencies that receives far more scrutiny and criticism than that funded by the gambling industry.’ (2015) Wohl and Wood concur, saying that, ‘From our collective 30 + years of experience, working with all types of funding agencies, the least interference with our research endeavours has come from the gambling industry.’ This point of view was also well represented in Fair Game.

But the interference of government officials in publishing and agenda setting is not an argument for accepting money from industry. On the contrary, it supports the argument that we should be doing more to ensure that these activities are undertaken independently of all beneficiaries of gambling including the industry.

Man-with-electrodes-on-hi-007Luke is wrestling with the thorny question, “What does…‘academic independence’ mean in practice?” The approach that he is developing at UBC is threefold: the research programme is determined by the centre and ‘funding is not tied to any specific projects’. ‘Second, there are no restrictions on publishing, or requirements to submit advanced copies of outputs to any bodies. Third, all outputs from the centre clearly disclose the financial support.’ Able to set the agenda for research, Luke and his colleagues have created a ‘casino lab’, an initiative which failed in the UK. Luke is ‘cautiously optimistic’ that their work will produce findings that will translate into evidence based policy but, ‘on this point, only time will tell’.

Two important experiments are taking place here: the first in machine gambling, the second in research economies. We await the results of both with great interest.

Rebecca Cassidy

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Written by samkelly2014

March 24, 2015 at 8:25 am

Mike Daube: researchers who accept funding from the gambling industry are ‘knowingly contributing to that industry’s political strategy’

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Mike Daube* spoke recently at the National Association for Gambling Studies Australia (NAGS). Mike is a highly experienced tobacco, alcohol and public health researcher and it’s very interesting to see what message he had for gambling researchers.

In a speech which apparently divided opinion, with some saying that it was ‘the best talk that they had heard at 20 years of gambling conferences’ while others sat stony faced, Mike made eight main points, as well as many astute observations about our field and its failings. I reproduce an edited version of them here, with his permission.

  • First, while there are of course clear differences between gambling and tobacco and alcohol, just as there are between tobacco and alcohol or alcohol and food or any of these and a range of other harmful industries, gambling should not sit apart, has much in common with the others and should learn from them.
  • Second, there is an onus on the public health community to develop an agreed set of policies on gambling – as we have done with tobacco and alcohol – and to work together promoting these to governments and the community. These should be evidence-based, with evidence not only from gambling, but also in the McKinsey phrase, with “logic based on parallel evidence”.
  • Third, gambling researchers should follow the recommendations of Adams, Cassidy, Livingstone, Thomas and others and ensure complete disclosure of all funding and other interests when they publish, comment or advise politicians and other decision-makers.
  • Fourth, there should be a much greater focus on prevention,
    Mike Daube

    Mike Daube

    public policy and obstacles to implementation of that policy. I do not argue against treatment and services for individuals; but that is not prevention; it should not be represented as such; and research or programs in this area should not be used as an excuse for lack of preventive action.

  • Fifth, there should also be a much greater focus on research around the vector of gambling problems – the gambling industry: how it works, how it exercises influence, how it lobbies, how it promotes, how it contributes to political parties and their support groups; how its networks operate; how it funds research and what outcomes there are from this funding; where it does not fund research; how decisions are made in the industry’s favour without transparent processes; who benefits directly and indirectly from the industry’s funding…
  • Sixth, while this may cause discomfort to some here, my view is unequivocally that any researcher who accepts funding from the gambling industry is knowingly contributing to that industry’s promotional and political strategies. Research funding may be hard to obtain; but that applies across any number of other areas where people would not dream of accepting alternative sources of funding. It is more than legitimate to press governments to fund research on gambling. It is, however, not compatible with either independence or public health principles to accept funding that directly or indirectly supports the vector. The evidence from parallel areas as well as this one is absolutely clear: they fund you to serve their interests, not those of the community. I absolutely do not argue against the freedom of researchers to work for the gambling industry – but if you want to do that, you should be clear that you are working in and for that industry, not seeking to sit under the umbrella of academic independence.
  • My seventh theme is that bona fide conferences on gambling research should not accept participants from the gambling industry. At such conferences there may be discussion around possible policy directions, areas in which action from governments may be sought, issues around research into the industry and its practises. These are areas in which gambling industry interests should not be involved. Further, their participation – as we have learned from tobacco, alcohol and food – allows them to skew the discussion and conclusions. They don’t invite us to their strategy meetings – why should we invite them to ours?
  • Eighth, I would argue that bona fide gambling researchers should press governments to establish significant funds for gambling research that are totally independent of any gambling interests (including those government agencies that are themselves involved in gambling).

What do you think of these principles? Can we work together to bring gambling closer to the professional and ethical standards of tobacco and alcohol research?

*Professor of Health Policy at Curtin University and Director of the Public Health Advocacy Institute and the McCusker Centre for Action on Alcohol and Youth and former Director General of Health for WA and Chair of the National Public Health Partnership.

Rebecca Cassidy

Written by samkelly2014

December 9, 2014 at 10:34 am

Talking about a revolution: incremental change will not redeem gambling research

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Earlier this year Alex Blaszczynski, editor of International Gambling Studies (IGS) invited me to contribute a short editorial about the challenges of publishing gambling research based on Fair Game. In the editorial I described a vicious circle: industry funding rewards work which focuses on benign ideas like responsible gambling and harm minimization which are easily absorbed and encourage a ‘business as usual’ approach.

Cartoon by Jonik

Cartoon by Jonik

I described how early career researchers are faced with a stark choice: either accept industry funding or leave the field and how the current system was underpinned by the social capital of senior researchers willing to accept money from the industry.

I also argued that policies on disclosure of interests, and indeed understandings of what constitutes a conflict of interest are wholly inadequate in the field of gambling studies, particularly when compared to the fields of alcohol, tobacco, food and pharma. I used IGS’s policies to illustrate this failure.

When I received the proofs of my article the text was virtually unchanged, but I was informed by the copy editor that the policy on declarations of interest had changed. The new policy can now be found in the journal’s style sheet.

Many of us believe that interests (and their absence) must be declared at conferences and whenever our data is presented. Conceding this principle is the first step towards a more transparent and accountable field. However, I expect that there will be disagreement about what constitutes a conflict of interest, or indeed an interest that must be declared. The declarations of interest by the editors of IGS, for example, can be found here.

Alex Blaszczynski declares that:

I do not hold any ongoing position, receive ongoing or significant funding, and am not engaged in any business or organisation that creates a conflict of interest (real, perceived, actual or potential) in the work I would conduct as Editor of International Gambling Studies.

The declaration raises as many questions as it answers. For example, what about the $1.2million Blaszczynski received from the NSW clubs industry and leading poker machine makers in May this year?

Is this funding not ‘significant’? Has Blaszczynski chosen to return it? Or does he not consider it a conflict of interest ‘real, perceived, actual or potential’? In which case, what does constitute a conflict of interest in these narrow terms?

I hope that we can continue to discuss these issues in the pages of The Conversation and elsewhere. As Rob Simpson has made clear, research is failing. Incremental changes are not sufficient. A radical overhaul of our entire field is essential if we are to regain public trust.

Rebecca Cassidy

Written by samkelly2014

November 12, 2014 at 12:16 pm

Window dressing: The Senet Group and self-regulation

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The recently founded Senet Group has been formed by four of Britain’s largest gambling companies in response to ‘public concerns on gambling, and gambling advertising in particular’. The group promises that its members will ‘adhere to industry codes of practice, including that of the Association of British Bookmakers (ABB)’ and from the 1 October 2014 will:

  • not advertise sign-up offers (free bets and free money) on TV before 9pm
  • not advertise gaming machines in betting shop windows
  • dedicate 20% of shop window advertising to responsible gambling messages

Self-regulation and the adoption of codes of conduct are two of the many well-established strategies to resist external regulation pioneered by the tobacco industry and perfected by the alcohol industry. The ‘Frank Statement to Cigarette Smokers’ published in hundreds of US newspapers in 1954 was signed by tobacco executives who went on to preside over a campaign of misinformation fronted by the Tobacco Institute. The youth smoking prevention campaign was particularly effective in staving off regulation, and protecting profits (Landman et al 2002). We know that self-regulation was used strategically and cynically because we have access to thousands of previously secret company documents from the time.Image by Sam Kelly. Dice from 'Roll Through the Ages' published by Gryphon Games

In alcohol, there is extensive documentation of the rhetorical value of self-regulation. A 2014 review of self-regulation marketing (advertising) codes by Babor and Noel found that ‘In countries where systematic procedures have been applied to the evaluation of marketing self-regulation codes, the research strongly indicates a lack of effectiveness in protecting vulnerable populations from objectionable content and exposure.’

Big Food is currently being criticised for failing to learn from these examples (Brownwell and Warner 2009). A 2014 review of self-regulation in the food and beverage industry by Ronit and Jensen found that, ‘commitments in industry self-regulation schemes tend to be relatively vague and permissive, that the measurable effects of the self-regulations tend to be relatively small and that some extent of public regulation may catalyse the effectiveness of industry self-regulation.’ A recent review of the drinks vending machine sector in primary schools in Madrid, for example, showed that compliance with voluntary codes was low and concluded that self-regulation was ineffective (Royo-Bordonada and Martínez-Huedo 2014).

Many will be aware that the gambling industry is exchanging ideas and personnel with tobacco and alcohol. The most recent and obvious examples include Dirk Vennix who came to the ABB from the Tobacco Manufacturer’s Association, and Clarion’s weird styling of the EiG (Excellence in iGaming) conference as some kind of existential, free thinking endeavour which includes Chris Searle former head of the Portman Group as a key speaker.

The Senet Group is inspired by the Portman Group. In 2004 the editors of Addiction described the Portman Group as having ‘consistently propagated interpretations of the research evidence that promote the commercial interests of the drinks industry while seeking to discredit research findings that would lead to effective policy measures supporting the interests of public health’ (Edwards et al 2004).

I agree with some of Steve Donoghue’s observations about the Senet group, but the weakness of his argument about researchers is that he has no knowledge of fields around gambling and of what constitutes good practice in those fields. He writes that:

Those in the academic community who are starving and can’t understand why the industry doesn’t fund them to fulfil their ideological fantasies are already producing methodologically weak arguments that all research commissioned by the Responsible Gambling Trust is completely tainted and purely industry propaganda.

I have never argued that all research commissioned by the RGT is industry propaganda. I have argued that the structural arrangement for funding research is not fit for purpose. Funding for research into areas of ‘dangerous consumption’ including alcohol and gambling should be independent of industry. Like the rhetorical use of self-regulation, this is not controversial in other fields. For example, the British Medical Journal will not accept papers that have received funding from tobacco:

As editors of the BMJ, Heart, Thorax, and BMJ Open we have decided that the journals will no longer consider for publication any study that is partly or wholly funded by the tobacco industry. Our new policy is consistent with those of other journals including PLoS Medicine, PLoS One, PLoS Biology; Journal of Health Psychology; journals published by the American Thoracic Society; and the BMJ’s own Tobacco Control

While Steve Donoghue and others think that gambling researchers are being fussy, or unrealistic, it is actually gambling industry executives, regulators and paid-for researchers in the field of gambling studies who are completely and utterly behind the times and out of touch with basic standards observed in other disciplines. For reasons that are poorly understood (and cannot be easily categorised) industry funding does affect research findings.

The Portman Group was founded in 1989. That the gambling industry could found a similar group in 2014 and expect to be taken seriously is indicative of the generally poor level of debate in the field. Among researchers there is a lack of reflexivity and failure to acknowledge conflicts of interest. There is no credibility or trust in gambling research where academics are available for hire, financial relationships are not acknowledged in publications or at conferences and safe research is rewarded with access and funding. The entire knowledge base has been weakened by the influence of industry. Critics like Jim Orford, Charles Livingstone and Peter Adams have been saying these things for years, but the system is very resilient, underpinned by rhetorical gestures like the founding of the Senet Group.

This is not 1989. There is greater public awareness of the politics of knowledge. People might once have accepted ideas like ‘Responsible Drinking’, which deemphasise the supply of alcohol and focus on the consumer, but my expectation is that they are less prepared to trust the intentions of an industry which has become more aggressive since the Gambling Act. The cynicism of the industry, in creating a body that pre-empts meaningful regulation with window dressing (literally) will be met with the scepticism of the public, who will see this exercise for what it really is.

Rebecca Cassidy

 

Bibliography

Edwards, G, R West, TF Babor, W Hall, J Marsden, 2004. An invitation to an alcohol industry lobby to help decide public funding of alcohol research and professional training: a decision that should be reversed, Addiction, Volume 99, Issue 10, pages 1235–1236.

Brownell KD, Warner KE. 2009. The perils of ignoring history: Big Tobacco played dirty and millions died. How similar is Big Food? Milbank Q. Mar;87(1):259-94.

Landman A, Ling PM, Glantz SA. 2002. Tobacco industry youth smoking prevention programs: protecting the industry and hurting tobacco control. Am J Public Health. 2002 Jun;92(6):917-30.

Royo-Bordonada, MA, MA Martínez-Huedo 2014. Gaceta Sanitaria, Volume 28, Issue 1, January–February 2014, Pages 65–68.

K Ronit and J D Jensen 2014. Obesity and industry self-regulation of food and beverage marketing: a literature review European Journal of Clinical Nutrition 68, 753-759 (July 2014)

Written by samkelly2014

September 24, 2014 at 10:35 am

Westminster eForum: Next steps for gambling policy: regulation, taxation and new opportunities

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On 20th May 2014 the Westminster eForum hosted a Keynote Seminar titled: Next steps for gambling policy: regulation, taxation and new opportunities. It was attended by industry and policy makers, consultants and lawyers. These events are extraordinary opportunities to see at first hand how the field of gambling policy is constructed.

Philip Davies MP had some interesting advice for the industry in the run up to the general election. First, he said, they need to ‘concentrate more on the messenger rather than the message.’ Politicians are not sympathetic to representatives of big bookmakers, he explained, but they might be interested in the plight of single shop owners. Secondly, he said, ‘they’ve got to start arguing on the politicians’ terms, not based on evidence.’

He continued, ‘This idea that decisions in politics are taken on evidence is for the birds, quite frankly, and politicians will always say it’s going to be evidence based, of course they are, they are not going to say we’ve got no interest in the evidence whatsoever, but just because they say that decisions are going to be evidence based doesn’t mean to say that they are going to be evidence based, and they’re not. I mean do you really think Harriet Harman is going to sit and listen to the evidence and sit down after a meeting and say, do you know what, I think I was wrong about that. Of course she’s not going to say that, she just wants to hear the evidence that she thinks will reinforce what she already believes, so it’s no good going along armed with loads of evidence, you’ve actually got to go along and focus your message based on where the politician is coming from, not where you think the politician should be coming from.’3420742147_d2798380db_b

This statement attributes a particular decision making technique to Harriet Harman, who was not there to respond. What about Davies? He did not exempt himself from his observation about decision making. Should his constituents applaud his honesty and their luck in discovering a conviction politician? Or worry that they are represented by someone who chooses to rely on his own judgement, irrespective of the insights of others who might conceivably be better informed?

His position echoes those of policy makers quoted in Fair Game. They told us that politicians use evidence about gambling selectively: to support their existing positions, to criticize their opponents and, most prosaically, to buy time in order to delay policy decisions.

Speaking of which, Clive Efford MP, Shadow Minister for Sport, has put a great deal of weight on the machines research to be published by the Responsible Gambling Trust in November. He told the audience, ‘If the research that is currently being done for the Responsible Gambling Trust shows that there is a link between the stakes and prizes on FOBTs and problem gambling, then I will call for them to be removed.’ What kind of link does he have in mind? In previous discussions of FOBTs, evidence of a ‘causal link’ between machines and problem gambling has been called for before any changes are made to policy. Will the machine research provide him with this evidence? Or has he decided to abandon this standard of proof in favour of lower level associations between particular products and behaviours?

Background

The core sponsors of the Westminster eForum are: Arqiva, the British Broadcasting Corporation, BT, ISBA – the Voice of British Advertisers, KPMG and O2.

Rebecca Cassidy’s attendance at the Westminster eForum (£210 plus VAT) was paid for by the European Research Council under the European Union’s Seventh Framework Programme (FP/2007-2013) / ERC Grant Agreement n. 263443

Agenda – Next steps for gambling policy: regulation, taxation and new opportunities [PDF]

Written by samkelly2014

July 31, 2014 at 12:59 pm

Fair Game: producing gambling research

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The Goldsmiths Report

The Goldsmiths Report uses quotes from 109 stakeholders (including researchers, industry members and policy users) to explore the relationship between gambling research and the politics of gambling liberalisation. The Gamsoc team is organising an afternoon conference on 3 April to present their findings and discuss the issues raised in the report and their implications for the field of gambling studies and beyond.

Two prominent researchers will speak about themes in their work which directly echo the issues tackled in the report. Peter Adams from the University of Auckland will speak about gambling industry funding, ethics and conflicts of interest. Mark Petticrew from the London School of Tropical Medicine will speak about Hans Selye, ‘the father of stress’, and his relationship with ‘Big Tobacco.’

When: 3 April 2014, 12.00-4.00

Where: The Orangery, Surrey House, 80 Lewisham way, SE14 6PB (entrance from Shardeloes Road). Click here to view where the Orangery is on a map and here for information on how to get to Goldsmiths, University of London.

Places are limited, so please RSVP to sam.kelly@gold.ac.uk as soon as possible to reserve your seat, and by March 21st at the latest.

22 days to launch

Written by samkelly2014

March 12, 2014 at 11:44 am

Beat the algorithms, the casino and the spread betting company

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As I wrote in an earlier post in April, High Frequency Trading (HFT) is perceived as making financial markets even more inhuman and evil than they already are. HFT has truly become the black beast of financial markets. Condemnations of HFT under such metaphors as that of an ‘hyper-speed casino’ bring to the table an interesting question: Is HFT making the market a more unfair game where a few players have a considerable technical advantage over the majority?

It is true that HFT is about working out gaps in the market and grabbing those opportunities to make profit. Being faster and being able to make many more trades than other traders is an obvious advantage since not everyone can afford it: keeping in the game of HFT is costly in investment and expertise.

It would be a mistake though to ascribe too much importance to those ‘supposedly smart machines’, a point that Michael Stothard raises in a recent FT article. After all, HFT and the algorithms behind it are not infallible. In the same manner that the dealer can be beaten by counting cards at blackjack, the algorithm can be beaten by spotting its failures.

Stothard tells us the story of how in 2007, a Norwegian trader, Svend Egil Larsen spotted a weakness in the computer system of Timber Hill, a unit of Interactive Broker. He found out that their algorithm reacted to trades in certain illiquid stocks and that he could take advantage of this by moving the price to his advantage to buy low and then sell  at a profit. Larsen made $50,000 in a few months but he was not the only trader to be operating in this way. Another trader, Peder Veiby, was also playing the ‘system’. Both Veiby and Larsen have since been charged with market manipulation. The most interesting point of this case is not so much that they beat the algorithm or were charged for it but that the courts has ‘found them not guilty, concluding that they were making the market more efficient by exposing a flaw in the system’.

This reminds me of the case of a spread better Barnett Alexander who was charged by the FSA last year for market manipulation for similar reason of price manipulation based on flaws in the spread betting companies. However, despite the case of Larsen and Veiby and the fact that they were cleared, Barnett Alexander preferred to avoid court. Instead he decided to settle with the FSA for £1.3m, a compromise, bearing in mind the potential costs of a lengthy court case were he to lose. Despite this however Alexander still believes that he could have won and as he rightly pointed out to me in an interview, technically he was not manipulating the market but the spread betting company’s prices. The distinction he makes is an important one and indeed, it makes the Swedish case even more interesting.

Barnett Alexander’s case is actually more similar to Larsen/Veiby than one might first imagine. Although Interactive Broker doesn’t call itself a spread betting company, it offers Contract For Differences which work on a similar principle to spread betting. In short, Interactive Broker offers a similar trading experience to Swedish traders than spread betting companies to British customers based on prices indexed to those of the market. This means that although traders have the feel of trading in the market they’re actually trading in another market: that the prices offered by spread betting companies and other financial institutions offering spread betting and CFDs. What those traders have found is that despite the fact that buying and selling stocks as spread betting or CFDs doesn’t affect the movement of share prices in the market (since no actual share is actually bought or sold), the reverse is certainly true: share prices in the market affect the prices offered by spread betting companies.

It seems, after all, that the comparison of HFT, or rather algorithms, to the casino has more to offer than merely a reference to unspecified evils. It’s important to underline here that the gambling industry also uses algorithms to facilitate random conditions and make prices for bets. Like spread betting companies, bookmakers, casinos and other gambling businesses are market makers, and although the house, in principle, will always win, it doesn’t mean that it cannot be beaten.

Written by Claire Loussouarn

May 28, 2012 at 7:06 pm