Two of the founders of Paddy Power have formed a lobbying group-turned-watchdog, Stop Gambling Harm (SGH). Like canaries in a coal mine, they’re seeking to warn the gambling industry about what they see irresponsible practices running amok.
The two founders are joined in the endeavor by one of the company’s original major investors. Paddy Power is a major Irish sportsbook that teamed up with the UK’s Betfair to form the conglomerate that eventually became Flutter, now the world’s largest online gambling company.
Fintan Drury, one of SGH’s founders and Paddy’s former chairman, spoke to Online Poker Report.
“Have a look at what’s happened here and what’s happening elsewhere,” he said, “The particular point is to wake up.”
Drury is clear about his and his mates’ love of the industry, for one, and honest about the money they made off it.
“First off, we’re not trying to kill off the gambling industry,” he stresses. “We’re not trying to prohibit gambling. Also, we don’t want to stop the customers, especially those punters who enjoy gambling and do so sensibly. Our target is the excesses.”
These same excesses are on the rise in the US for a couple of reasons. The first is the 2018 Supreme Court ruling that repealed the prohibition on sports betting, ushering in a wave of online gambling at the same time. Second is the rise of data mining and smartphones. Together, they mean that Americans have access to more forms of gambling than ever before, and the industry has better knowledge of who to target and how.
Ireland provides a cautionary tale for the US
According to Ireland’s Department of Health, there are anywhere between 30,000 to 60,000 people with gambling problems on the island of just under 5 million. That is, roughly 1% of the population struggles with gambling to some extent. Furthermore, in terms of gambling expenditures per person, Ireland ranks third in the world, behind only Australia and Singapore.
According to Colin O’Gara, a clinical professor of psychiatry at University College Dublin, the problem may be even worse than that. By his estimate, as many as 250,000 Irish have a gambling problem. He says that about 5% of Ireland’s adults suffer from a serious gambling problem, and between 0.7% and 1% are so addicted to gambling that they are “utterly preoccupied” by it.
Drury and his mates formed Stop Gambling Harm because Ireland does not have the same kind of restrictions as other countries like Australia and the UK. Only last October did Ireland’s Department of Justice announce the establishment of a Gambling Regulatory Authority. Even that won’t be operational until next year.
“It’s a particular problem here and in the U.S.,” says Drury, “where sports is a huge part of the culture. And because the tax revenues as a result of the gambling industry are off the charts, it’s almost as valuable to legislators as it is to the shareholders in these companies.”
Harm reduction isn’t enough
Drury’s team is pushing for urgent change:
“We don’t trust the industry to sort out this shit or address the significant problems that are there. We have to introduce no public harm and even the concept of doing this for the public good.”
The old Alan Friedman economic model of reaping as much money as possible, as quickly as possible, for as long as possible, on behalf of the shareholders is no longer viable, explains Drury.
SGH recommends tighter constraints on gambling, both internal and legislative. In a December 2021 Irish Times editorial, they opined:
“Investment giants and large pension funds [must] recognise their unique power to influence change and their responsibility to wield it. They must be held to account to do what only owners can do – dictate how their business is run.”
Foxes in the hen house
So far, U.S. efforts to curb problem gambling have been left mostly in the hands of the industry. Keith Whyte is the executive director of the National Council on Problem Gambling (NCPG), which is funded by the gaming industry. He acknowledges the difficulties:
“Online gambling presents an enormous opportunity and an enormous threat. The industry can use its power to create something that’s more sustainable and long term for the customer or something that’s negative and predatory with a higher burnout.”
“There’s potential,” he adds, “for online gambling companies to monetize that by being a responsible operator out there, which may lead to preferences in terms of bids—or trading at a higher premium on Wall Street, or attracting better employees—because of their reputation for safety. There’s an opportunity for companies to lean into all this. But if regulators and states don’t set strong standards, then the companies may just do only the minimum.”
On the other hand, those overseeing the industry are often bullish on the idea of self-regulation. Conor Grant, CEO of Flutter’s UK and Ireland divisions boasted to the boasted to the Irish Times this past December, “We, as a business, are leading the race for safer gambling.”
Harm Prevention or Harm Permission?
That’s bollocks, according to Harry Levant, a US-based former gambling addict who placed his last bet on April 27, 2014. He’s now director of education for another harm-reduction initiative, Stop Predatory Gambling.
“Responsible gambling is an industry fraud that’s unethical and needs to be replaced with a public health policy that’s independent,” he says. “It’s the antithesis of harm prevention.”
Like Drury, who admittedly made heaps of money from Paddy Power, Levant repeatedly stresses that he’s not opposed to gambling. What he wants is protection for the most vulnerable. That includes people like his former self, underage individuals, and people genetically or environmentally susceptible.
“Gambling has to be treated the same way we treat opioids and alcohol.”
Drury used a similar analogy:
“If I have a booze problem and a sign outside my pub tells me they’re giving away a free pint and a voucher for five more — the police wouldn’t be long to come along and shut that down.
“It’s the same with offering free bets. Especially to someone with a problem. What’s that about? If that’s not encouragement to gambling what is? It’s kind of bonkers, to be honest. But look at the way the alcohol and tobacco industries adapted.”
Whyte, meanwhile, thinks it’s even more literal than that. He says that the gambling industry “wants to be more like Big Tobacco and Alcohol.”
He points to FanDuel’s recent hire of Adam Warrington. Now vice president of Responsible Gaming at FanDuel, Warrington came from brewing giant Anheuser-Busch, where he was VP for corporate social responsibility.
Gamble responsibly, or not at all
If things don’t change soon, warn Drury and others, gambling addiction rates may rise in the US. If so, the industry could face substantial backlash. This could come in the form of heavy-handed government regulations from naive or vindictive lawmakers. Worse, it could result in things moving back towards outright prohibition.
“The thrust comes down to: Can you demonstrate responsibility gambling is good for the bottom line?” asks Whyte. “Right now, it behooves us to support the industry and the companies who do that.”
As Drury points out, however, this is easier said than done:
“There’s an understandable reluctance at being the first to break ranks,” he observes, “but I’m optimistic that the excesses can be curbed and dialed down for those at the greatest risk and for the most vulnerable.”