Category Archives: Studies/Research

A New form of Gambling in Video Games? What are Loot Boxes and Why is the Gaming Community asking the ESRB to Call this Gambling Practice Out?

Casino Watch Focus has reported on the highly addictive principle of near misses and how this form of gambling forms strong addiction. Typically viewed in the context of regulated slot machines, the player pulls the lever and tries to line enough symbols up in a row to get a prize. Studies have indicated that when someone gets close but doesn’t win, what they call a near miss in the industry, the player will chase the win. A very similar phenomenon is now taking place in video games. The concept in the gaming world is known as a loot box. You pay a price to manufacture to by a box. Random items that a player would want to have in the game, say, a high powered weapon in a shooting game or a piece of defensive armor that models a coveted look and offers superior protection from other players, are generated when the loot box is opened. The key is that the items are random. Most players are looking for top end, often times called legendary gear. The odds of getting them aren’t too high and so a player tends to keep paying more and more money to open more and more loot boxes chasing after the win, or the best items in the game. This practice was identified very early as a form of gambling and a gaming mechanic that uses the same psychological techniques to addict players. The worst part, they are in games marketed toward children and no regulation exists. The highest level, state or federal laws, are completely none existent, so many in the community turned to the ESRB rating system to get these games classified as mature, so that young kids and teens aren’t the target of such gambling practices. As reported by Forbes, ESRB has erred in declining to view loot boxes as gambling, and social awareness is very much need to properly protect players:

Today, the Entertainment Software Rating Board, or ESRB, stated publicly that the hot new monetization trend in video games, loot boxes, don’t qualify as gambling. This is wrong on many levels. While it’s true that, unlike a slot machine, a loot box will always result in some form of a prize, that doesn’t change the fact that the simple act of opening loot boxes is incredibly similar to gambling, and taps into all the same parts of the brain.

“The player is basically working for reward by making a series of responses, but the rewards are delivered unpredictably,” Dr. Luke Clark, director at the Center for Gambling Research at the University of British Columbia, told PC Gamer recently “We know that the dopamine system, which is targeted by drugs of abuse, is also very interested in unpredictable rewards. Dopamine cells are most active when there is maximum uncertainty, and the dopamine system responds more to an uncertain reward than the same reward delivered on a predictable basis.”

Psychologists call this “variable rate reinforcement.” Essentially, the brain kicks into high gear when you’re opening a loot box or pulling the lever on a slot machine or opening a Christmas present because the outcome is uncertain. This is exciting and, for many people, addictive. When it comes to video games, the biggest concern is that children and adolescents will end up forming addictive behaviors early on.

At this point there are two issues/lines of thought at play. One is that the act of buying a loot box and opening it might not be technically gambling because you always get a prize. To this point, its pointed out above that the act of chasing loot boxes is exactly the same as gambling. More importantly though, some games do allow the players to sell or auction off the items received in exchange for real world money, items or game subscription, things with real world value. Eurogamer very specifically outlines the many ways in their recent article when they discuss both the US ESRB and European’s PEGI stance on loot boxes. So in that sense the player is putting real money into the game, opening the box and getting a price based on random chance not skill, and then cashing out the winnings, which is text book gambling. The Second line of thought is that regardless of whether or not this reaches the threashold for actual gambling that requires governmental oversight, it absolutely should get the ESRB’s attention and it should be disclosed to players and parents accordingly. Forbs continues:

“Look if you include these kind of mechanics in these games and you actually allow people to buy these packs for real money, these random blind packs and engage in what is essentially a form of gambling, then you should be jacking the rating of your game up to Mature.

“The fact that [Star Wars] /Battlefront II/ is going to be Teen rated and yet has an in-game real money gambling system blows my mind. How are they possibly getting away with that? Well, the answer is that the US government and legislation hasn’t caught up with it yet.”

OpenCritic co-founder and CEO Matthew Enthoven says that the ESRB’s response “kind of ducked the issue” calling it a semantic argument. “You can call it gambling, you can call it gaming addiction, you can call it whatever you want. The problem is still the same,” he tells me. 

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Online Gambling Industry has Tools to Help Low-Income & Problem Gamblers; Chooses to Target & Prey on them Instead

Casino Watch Focus recently reported that gambling lobbyist finally admitted that casinos prey on customers. In a comment meant to say casinos hope more to prey on tourist, than the local residents, the well-understood relationship between casinos and gamblers was painted in a truthful light. Its clear the industry needs gamblers to make money, but it can be rather upsetting to learn just how they truly view them. Now it appears the online gambling community finds itself in a similar position. A recent study has shown that the online gambling industry has the tools to identify the most vulnerable of gamblers, yet they don’t help them, they pursue them. Consumer Affairs online reports: 

Focusing on practices in the United Kingdom, the Guardian reports that the gambling industry often takes data from third-party companies to serve online gambling ads to low-income consumers or those who have struggled with gambling addiction. One digital marketer detailed his experience of working with one such betting company.

“Third-party data providers allowed us to target their email lists with precision. Lower-income users were among the most successfully targeted segments,” he said. “We could also combine segments, ie we could target users who are on less than £25k a year, own a credit card and have three kids, via these providers.” 

Its upsetting to think the industry has no moral issue with targeting those most vulnerable, but to some its shocking. They promote the idea that gambling is an entertainment provided for people of the community to have a good time. They publicly preach messages of responsible gambling and offer 888 numbers and resources to help those in need, yet privately, they secretly target them as sustainable and easy money making prey. Consumer Affairs continues: 

The practices of these gambling sites bring up some interesting ethical implications when it comes to digital marketing. One could argue that serving a targeted ad to get someone to buy a product they could be interested in is harmless, but can the same be said for serving an ad to someone who is desperate or struggled with gambling in the past? According to some consumers, the answer is a definite no. In the Guardian report, several people say that bookmakers are purposely taking advantage of its targeted audience to promote their business.

“It just reaffirms my belief that the betting industry has no moral compass and are capable of exploiting the vulnerable in order to obtain the last pound out of them,” said Carolyn Harris, Labor MP for Swansea East in the UK. “They are actively seeking out those who can least afford to be involved in gambling. I’m absolutely aghast that they use these hostile techniques in order to suck the life out of people. If we were to offer free cocaine to an addict, they’d find it very difficult to decline. The betting industry knows this and they are by token doing exactly the same thing.” 

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Vast Majority of Florida Voters Want to Maintain or Reduce current Gambling Levels

Casino Watch Focus has reported on the ongoing gambling expansion attempts in Florida. Many times over the years Florida voters have had a say in the expansion of gambling in Florida, but most of the time, Florida families are at the mercy of the legislature. If the Florida House and Senate agree to expand gambling due to special interest influence, citizens and families often lack recourse other that perhaps trying to elect new officials into office. Because of such strong pro-gambling interests, an initiative petition is in the works to give the power back to the people. So what do the people of Florida think about gambling? Do they approve of the gambling expansion efforts at the State Capitol? Are they fine with all the lobbing dollars from special gambling interests flowing through the Florida Legislature? Or do they believe gambling expansion should be stopped, or even reduced? A new poll seeks answers and the results should open the eyes to legislators who are representing their constituents. Florida Politics online explains:

The vast majority of Florida voters — 84 percent— “want to reduce or hold the line on gambling” and 60 percent also “are less likely to support a candidate … that votes to expand gambling,” a new poll released Monday shows. The latest Mason-Dixon poll included questions on gambling, according to a news release from No Casinos, Florida’s anti-gambling expansion group.

The anti-expansion “feeling among Floridians carries across all regions of the state: North Florida (87 percent), Central Florida (92 percent), Tampa Bay (81 percent), Southwest Florida (84 percent), Southeast Florida (78 percent),” the release said.

“Tallahassee politicians need to get the message that only 8 percent of Florida voters want gambling expanded, and 84 percent want it left alone or reduced,” said John Sowinski, president of No Casinos. “It’s time to stop listening to gambling lobbyists and listen to the people.” In addition, he said most “Floridians don’t want their elected officials to expand gambling, because they know that more gambling hurts the quality of life for them and their families.”

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


Guest Article: Tampa Bay Times Editorial: Florida Lottery Targets Poor Residents

Casino Watch Focus has reported on the recent bill introduced to allow Florida Lottery tickets to be sold on line in the wake of the Lottery Secretary resignation scandal. The downfall of lottery winners and the disadvantages of this form of gambling have also been heavily reported on. Now, the Tampa Bay Times has released an editorial outlining the disproportionate effects the lottery has on the poor:

The Florida Lottery recently introduced five new scratch-off games, a move that likely will boost the lottery’s bottom line at the expense of its most vulnerable ticket buyers. Scratch-offs, which range from $1 to $25 a ticket, are most heavily played by the poor. No one is forcing them to fork over their money, of course. But as the lottery tailors its offerings to maximize scratch-off sales and markets games in low-income neighborhoods, Floridians would be right to question whose interest that really serves.

The names of the games are straightforward and promote a potential windfall: Maximum Money, Bonus Crossword, Double Deuces, Lucky Seven and Fast $100. All cost between $1 and $5, with a top prize of $250,000 for the $5 game. The new options mean the lottery now offers 83 scratch-off games, which account for 65 percent of ticket sales. Why do the poor play them more? For the instant gratification, experts say. People in poverty see the lottery as a chance to improve their lives. It rarely works out that way, but ticket sales soar nonetheless.

The South Florida /Sun /Sentinel recently analyzed lottery sales figures, marketing data and geographical information to discover who buys scratch-offs and what it costs them. The findings are disturbing. From 2010 to 2015, sales of scratch-offs rose three times faster in poor neighborhoods than in other areas, and it happened as the lottery directed more advertising to poor and minority areas, the /Sun /Sentinel found. Those parallel increases point to a win for the lottery’s marketing department but no one else.

Gambling critics refer to lotteries as a tax on the poor. But unlike taxes, lottery purchases aren’t compulsory. However, like taxes, they affect populations differently. The /Sun Sentinel/ found that people in high-poverty areas spent an average of $385 in 2015 on scratch-off tickets. In better-off areas, the average was $245. Those figures validate the argument that lotteries are regressive and even harmful.

Where that harm might be mitigated — in increased money for education — inequality persists. Florida’s Bright Futures scholarships, funded with lottery money, are awarded to students who score in the top tier on the SAT or ACT. The high standards mean mostly middle- and upper-class students earn the scholarships, not poor and minority kids. That gap grew wider last year when the state raised the bar even more on Bright Futures in order to rein in costs.

These are salad days for the Florida Lottery, which is enjoying its highest sales ever — $532 million in July alone. Profits were up 17 percent compared with July 2015. But too much of the windfall is coming out of the pockets of low-income Floridians who are being lured to spend money they can’t afford to lose on a long-shot bet.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


New Poll Shows Florida Voters Overwhelmingly Support Voter Choice In Gambling Expansion Matters

Casino Watch Focus has reported on the ongoing efforts to help ensure the people of Florida have the ability to directly impact gambling expansion. Recent efforts have centered around a ballot initiative that would amend the constitution to require a vote of the people before any gambling expansion legislation can be pushed forward by the legislature. Voters in Charge, the group responsible for the petition, have secured the signatures to keep the process moving forward the bill is not before the Florida Supreme Court to ensure it meets the proper requirements. As the process moves forward, its important to know how well the amendment would do on the ballot, and a new poll aims to answer that questions.   The poll results, released by No Casinos and conducted by Hill Research Consultants, was outlined by Orlando Politics Online: 

– 69% support a referendum requiring voter approval of all gambling expansion decisions. Such a referendum, the Voter Control of Gambling Amendment, currently is before the Florida Supreme Court for placement on the 2018 ballot. Only 21% oppose it.

– 83% believe that Florida voters should decide gambling policy in Florida. By comparison, 7% believe the Florida Legislature should decide, 3% believe the Governor should decide and 3% believe the courts should decide.

– 72% indicated they would be less likely to support a political candidate who supports expanded gambling in Florida without a statewide vote. By contrast, 18% are more likely to support such a candidate and 6% say it makes no difference.

– 75% disagree that more gambling in their city will improve the quality of life for them or their families, while 18% believe more gambling improves their quality of life.

The poll was directed at actual Florida voters who voted in recent elections. The margin for error was under four percent, so the implications are pretty clear. No Casino’s President, John Sowinski, summarized:

“The will of the voters could not be clearer,’’ said John Sowinski, President of No Casinos. “Regardless of political party, Floridians overwhelmingly want a say in whether gambling will be expanded in our state. They understand the negative social and economic consequences. This is why the gaming industry continually tries to circumvent public opinion, hiring lobbyists and lawyers to push their agenda of more and more gambling in the Legislature and courts. Elected officials should take heed — it is not only good public policy, it is also smart politics to reject expanding gambling in Florida.”

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Gambling Taxes are only Short-Term Fixes for States looking for Sustainable Revenue Streams

Casino Watch Focus has reported many times on various states expanding gambling as a means to collect tax revenue, often times at the expense of its own citizens. 100 years ago virtually all forms of gambling were illegal, but slowly, one state at a time, gambling has been made legal by states looking to take their cut of the action. Some gambling expansion takes the form of lotteries, other expansion measures are full-scale casinos. The sales pitch is typically the same, why not allow some harmless fun that will allow the state to bring in some much needed tax revenue, often times promised to local educational causes. Now, a new study confirms what many have claimed, that any initial gains a state looking to expand gambling may see, don’t materialize to long term benefit. Reuters explains: 

Gambling provides only a short-term fix for U.S. states looking to boost revenue without having to turn to politically unpopular tax hikes on income and sales, according to a public policy research group’s study released on Tuesday. The Rockefeller Institute of Government said more than a dozen states legalized or expanded gambling in the wake of last decade’s Great Recession.

“History shows that in the long-run the growth in state revenues from gambling activities slows or even reverses and declines,” the study said. The study comes as some states consider whether to expand gambling. 

In New Jersey, voters will decide in November whether to allow two new casinos in the north, close to New York City. Local officials in cash-strapped Atlantic City, currently the only area in New Jersey where gambling is allowed, say new casinos will cause the city to lose even more revenue.

With recovery of U.S. regional gaming revenues tepid, long-term headwinds will continue to weigh on the sector, Fitch Ratings said in a separate report on Tuesday. Barriers to growth include “slower wage growth, less certain retirement prospects for baby boomers, and alternative avenues for gambling,” Fitch said.

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Poll Indicates Florida Voters Want Final Say in Gambling Expansion

Casino Watch has reported on the ongoing efforts by those hoping to expand gambling in Florida. Most of those efforts have been unsuccessful and now that an election nears, legislative hopefuls should pay close attention to the results of a recent poll. The Tampa Bay Times provides access to the press release that explains that voters don’t want the legislature passing pro-gambling bills and they favor a Constitutional Amendment to require statewide support prior to expansion: 

Any discussion of expanded gambling, or limited gambling, may be on hold until after the election but a new poll out by No Casinos says legislators should keep voters in mind before making any commitments. Here’s the press release:

Florida voters don’t want elected officials who represent them to support more gambling in the state, and they heavily favor a Constitutional Amendment that would require voters statewide to have the final say on whether or not a form of gambling is legal in Florida. The poll of 604 likely voters was conducted by Hill Research Consultants, and is part of a candidate pledge package being sent by NoCasinos.org to all candidates running for the Florida Legislature.

“It is good public policy and smart politics to be against the expansion of gambling in Florida,” said NoCasinos.org President John Sowinski. “Floridians don’t want their elected officials to legalize more gambling, and Florida voters want to have the final say on this issue through a statewide vote of the people.” The poll consistently showed strong bi-partisan consensus on these issues.

The highlights of the polling are as follows: 73% of Florida voters support a proposed Constitutional Amendment requiring a statewide voter initiative for authorization of any form of gambling.

Voters are overwhelmingly less like likely to vote for candidates for office who either:

Support expanding gambling in Florida
Support expanding gambling without a statewide vote of the people
Support proposals to allow slot machines at pari-mutuel facilities

75% disagree with the statement that more gambling will improve our quality of life.

By a 63% to 28% margin, voters want gambling laws fixed before the legislature discusses any future expansion.

Voters think the creation of a new regulatory agency for gambling is more likely to expand gambling industry influence than reduce it.

Voters prefer that gambling issues be determined by statewide referenda, not local votes.

Voters overwhelmingly oppose the legislature granting new forms of gambling to pari-mutuel facilities. 

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION