By 2022, experts forecast the gaming industry will produce $196 billion in revenue. It's no wonder then that tech giants like Apple and Google are trying to cash in by launching gaming streaming. Nov 01, 2020 USD 2,900. Gambling Software market. In 2019, the global Online Gambling Software market size was US$ 60.47 Billion and it is expected to reach US$ 118.84 Billion by the end of 2026, with a CAGR of 9.46%. All in all, the gambling industry generated profits of £13.6 billion throughout 2015, £4.5 billion of which was generated by online transactions. The majority of that came from casino activity, which made up 57.5% of the total yield, while betting came in second with a 35.1% share. The gambling industry is mostly made up of sports betting operators, casinos and poker rooms. These are the industry’s big winners, due to how games are stacked against players. Bookmakers make money due to vig, casinos are guaranteed to profit due to the house edge and poker rooms receive rake from every pot.
Casino gaming is on the rise across much of the developed world, with governments increasingly unable to resist the allure of windfall taxes and a hefty influx of cash for the local economy. Massachusetts embraced the trend in 2011 when the state legislature voted to legalise casinos. Construction is underway for the state’s first casino at Plainridge Park, with 1,250 slot machines, harness racing and an estimated 500 new jobs.
That decision is now up for review, with a repeal referendum to be considered in the November midterms. In deciding whether to support the repeal, Massachusetts voters will need unbiased information about the social impact of gambling and its downsides. Sadly it’s going to be much harder to come by than you might think.
A compromised research agenda
Anyone looking for good quality evidence about the consequences of gambling first needs to understand how knowledge about gambling is produced. How do we know what we know? Who dictates the research agenda? How is research funded? How do we ensure that we have a sound base of impartial knowledge on which to build policy?
The answers to these questions are profoundly depressing. While in the fields of tobacco and alcohol research, academics regularly debate conflicts of interest and interrogate the strategic use of research and evidence, many gambling researchers remain dependent on industry funding. Gambling is an area largely devoid of disclosure policies, and many researchers are unreflective or outright defiant about industry influence.
Researchers, regulators and policy makers champion a “partnership model” for producing research, not so much “business as usual” as “we are all in this together.” This remarkable state of affairs contrasts markedly with other fields and produces a weak knowledge base that is unevenly influenced by industry interests.
The impact on the discipline is striking. A large proportion of spending goes on prevalence studies – counting problem gamblers in the general population. These surveys are popular with industry because they make it possible to downplay the absolute numbers of pathological gamblers, along with the percentage of the general population at risk from gambling problems, the percentage of gamblers who experience problems and the proportion of profits that come from problem gamblers (estimated at between 30 and 50%).
Prevalence studies also tend to sidestep the question of social class, thus disguising the inconvenient fact that most of the harm from gambling occurs in disadvantaged populations – those with the least capacity to absorb it.
The problem with problem gamblers
Complementing prevalence studies is a vast body of research on problem gamblers. Much of it rests on the assumption that gambling is a harmless leisure activity which makes a net contribution to public funds through either taxation or out of town tourism.
The idea that normal consumers gamble without ill-effect creates a separate category of defective consumers labelled as “problem gamblers”. According to this framework, solutions to problems with gambling are to be sought on an individual level. The alternative approach – to see gambling as an aspect of public health that may be managed by limiting the supply of particular products - is poorly supported by industry or government funding, particularly where taxes on the profits of gambling have become an important source of state income, as in Australia, Canada and, increasingly, the United States.
Should gambling advertising be banned debate moderators. A minority of critical researchers continue to agitate for change – arguing that research should not be funded by the industry, that priorities should not be set by industry-influenced panels, and that research should have a public health remit.
The role of researchers
So far, these arguments have fallen on deaf ears. Senior researchers are not only content to take industry money, they are also prepared to defend these arrangements.
In December 2000 Nottingham University decided to accept a donation from British American Tobacco of £3.8 million to establish an International Centre for Corporate Responsibility. The executive editors of leading respiratory medicine journal Thorax, John Briton and Alan Knox, wrote an open letter arguing that “accepting money from the tobacco industry degrades the reputation of our University and undermines the work of all with a commitment to the teaching of medicine and the promotion of public health.”
Professor Richard Smith, editor of the British Medical Journal, resigned from his post at Nottingham, followed by a team of 20 cancer researchers, led by Professor David Thurston.
Almost 14 years later, Professor Alex Blaszczynski, editor-in-chief of the journal International Gambling Studies, and one of the most prominent gambling scholars in the world, received $1.2 million from the New South Wales clubs industry to study problem gambling in Australia. Australians have the highest gambling losses per resident adult of any country in the world and spend more on gambling than they do on alcohol or petrol.
Asked to defend this arrangement, Blaszczynski said:
Because of the nature of gambling, you do have to start looking at gaining access to data held by the industry, by patrons who are in industry venues and start looking at real life research that provides sensible, evidence-based information.
Blaszczynski’s defence is disappointing. It does not engage with the most pressing criticism: scholars in the fields of alcohol and tobacco have shown that industry funding systematically influences findings.
Further, by accepting that industry can control such access, Blaszczynski is, in effect, arguing for a monopoly on knowledge production for those who get along with the industry.
How industry funding frames the agenda
Blaszczynski’s acceptance of industry funding is not, however, exceptional and many in the field of gambling studies in the US, where funding for research is one-twentieth that of Australia and Canada, would vigorously defend his actions.
US universities enter into partnerships with individual casino companies. US academics compete for funding from the National Centre for Responsible Gaming (NCRG) which is paid for by the American Gaming Association and claims to have mandated, “stringent firewalls to separate the gaming industry’s contributions from the research it funds”. The effectiveness of these firewalls, and similar mechanisms in the UK and Australia, is debatable.
Not surprisingly, the National Centre for Responsible Gaming focuses exclusively on the disease model of gambling addiction and does not fund research with a wider social purview. Senior research director Christine Reilly recently justified this approach by saying:
To me it seems kind of silly to spend time and money on an issue that is extremely difficult to research, because you can’t count on people’s memory.“
John Warren Kindt, Professor of Business and Administration at the University of Illinois recently described NCRG output as 'research designed not to hurt the gambling industry and to misdirect the debate”.
The trust deficit
Some research with a broader public health remit can be found in Australia and the US, but, as I discovered when I interviewed researchers for my study of gambling research, it is likely to be criticised and ignored. The price of independence is the loss of funding and access to data.
We depend on researchers and public health organisations to inform us about the potential harms associated with gambling, consuming alcohol or smoking. The purpose of this research is to better understand how risky activities affect communities and help us to judge what restrictions, if any, should be placed on their supply and promotion.
We cannot trust gambling research. We must therefore be sceptics. Every expert invited to give evidence to a committee on gambling should be asked, “Have you ever accepted money from the industry to conduct a piece of research, write a paper or attend a conference?”
In the absence of a culture of disclosing interests, every paper submitted as evidence should be contextualised – again we must ask “Who paid for this research?” and “How did this person gain access to data?”
It’s not much - it doesn’t produce the independent research that we so urgently need - but until the field of gambling research undergoes meaningful reform it’s the least we need to do.
In the meantime, voters such as those in Massachusetts looking for independent research, will have little choice but to roll the dice.
This article is part of a series on gambling in America. You can read the rest of the series here.
Gambling is a 400 billion dollar industry. This means there are 400 billion dollars on the table to grab, placed by punters and bettors worldwide. That is the gambling pie. Now, grab a spoon and read how you can take a bite.
First, let’s say a few words about how the big guys work in this business.
The gambling industry is mostly made up of sports betting operators, casinos and poker rooms. These are the industry’s big winners, due to how games are stacked against players. Bookmakers make money due to vig, casinos are guaranteed to profit due to the house edge and poker rooms receive rake from every pot.
If you want to win big and constantly, you need to start a gambling business. No other way around. You cannot take a bigger cut of the gambling pie unless you are one of these companies. Even the most successful poker players and sports bettors cannot compete them in profitability.
Yet, these businesses are not one-man shows. Plenty of people work in the gambling venues, from dealers and odds compilers to marketers and public relations staff. They are real businesses with business plans that guarantee them a profit for offering a service to the public. That service is entertainment. Because that is what gambling is.
Entertainment.
For all that people to work and get paid their salaries, gambling companies need big cheques and margins. Otherwise, their business isn’t sustainable.
There are two ways to accomplish that: by either having bigger-than-average profit margins or increasing their turnover. Usually, brand new gambling companies go for the former. As they build up their customer base, they reduce their margins to attract more turnover and compete with the big guys. By the time a gambling operator generates sufficient revenue and net profit every year, their business is safe, as long as they don’t fall behind to competition.
Then, it’s a matter of how many more gamblers find their service attractive. The more they do, the bigger the cut for the company.
Either way, gambling companies are after punters’ money. Those 300 billion dollars. Gamblers are feeding the whole gambling industry. Even in poker where at first glance whales (wealthy bad players) lose to better, regular players. Note “regulars”. Eventually, those regulars will keep playing, paying rake on a daily basis, giving a portion of their winnings back to the poker room.
So, here’s how to stop feeding the gambling industry.
Stop gambling!
If you have been gambling, stop. Unless you are a winner, you need to stop. And since you are reading these lines, you have been losing money. So, stop losing money!
So simple.
Now that your bankroll stopped depleting, it’s time to understand the ins and outs of the gambling industry. That is known as the iGaming industry if you are gambling online.
In gambling, someone has an edge. It’s either you or the man on the other side of the betting line. That usually is the house, standing for bookmakers and casinos. That edge is either predetermined (think of roulette, where you are paid 35-to-1 on a 37-number wheel) or fluctuating (think of betting odds that move up or down).
The best way to comprehend the edge is a coin toss.
Imagine you bet on a coin flip, at less than even odds. No matter your choice of heads or tails, you are going to lose money, in the long run. You are betting on a 50-50 chance but only get paid less than double your money on each coin flip! Depending on how much less you are getting paid, your bankroll will withstand a certain amount of bets.
So, if I’m offering you 1.90 (decimal odds) for each coin flip, your money will end up in my pockets after 200-300 coin flips. That’s how you have been feeding the gambling industry. And that’s what the house edge is all about.
But how do I know how big is your bankroll?
Risk management in gambling
Before you even think of beating the casinos or the bookies, you must understand risk management. Also known as bankroll or capital management, risk management will be the decisive factor in your success. No matter how much edge you gain over the gambling companies, bad risk management will make your betting bankroll evaporate.
If you are going to remember one thing from this article, note this:
Always risk maximum 1% of your gambling capital.
Gambling Industry Billion
That’s easy to remember, right? Set aside a specific amount of money for your gambling habit and split it into 100 parts. No matter your gambling medium, you should risk no more than one part on each bet you are placing.
That’s pretty much it!
That would also get you in a safe distance from disastrous staking plans, like martingale systems. When the time comes, you’ll move up to more advanced staking strategies than flat betting, such as the Kelly staking plan. Until then though, stick to risking 1 per cent of your bankroll and you’ll be fine.
Remember that this rule applies to small and big bankrolls alike! So, your bankroll’s size doesn’t matter when it comes to risk. Size only determines how much money you will make or lose in currency terms.
Find a gambling system
Now comes the really tedious task of creating a profitable gambling strategy. Finding an edge in the market isn’t easy, I’ll tell you that. If it were that easy, and given the simple risk management rule I explained, everyone would be a winner. But you already know that only 5% or so of gamblers can make it pay.
In order for you to make money, someone has to lose. It’s a zero-sum game, where gambling operators also get their cut. Thus, we need to exploit the market, looking for leaks and biases, like the favorite-longshot bias . The average gambler follows specific betting patterns. You mustn’t do the same. Always do something different, always think different.
Be the first to … or be the best in exploiting a known fallacy.
Oh, and if you do, don’t let the world know unless you are after fame and reputation. Otherwise, your edge will diminish as more people will imitate you, and market finds its new balance.
Finally, don’t worry if your first betting system fails!
Be disciplined, stay on your toes and avoid burnout
So, by now you should have a viable system and know how much to bet on the next game. You are on your way to becoming one of the elite professional gamblers. What can go wrong?
First, you may not be disciplined enough to follow your own rules! Wouldn’t it be pity to lose money, after all that research and study? Yet, even reputable and notable sharp bettors may lose their discipline after a long losing streak.
Gaming Industry Profits
Don’t be that guy. Progressive slots vs regular vs.
Trust your proven strategy, stick to your risk management plan and always be prepared for variance. Embrace the drawdown and never question yourself at tough times, as long as you are doing everything by the book.
By the time you experience several months or years of successful gambling, there’s a big chance you feel… bored! Yes, believe it or not, no matter how much money you are making, doing the same, dull thing every single day, will get you bored. At first, making money from gambling seems like a dream. But like in every other business, routine will take the pleasure away.
Find the missed fun, by exploiting new markets, trying something new or improve your methods.
Finally, burnout is a serious hazard in all kinds of successful gambling. Take breaks, go on holidays, and enjoy your profits and hard work. Don’t let gambling consume you, no matter how big you are winning.
Enjoy life, because in the end, isn’t that the meaning of living?
Let’s not hurry things up though. Most probably, you’re having a difficult time to break even to say the least. Winning in the long run seems too far away at the moment. Don’t despair. Stop gambling your money away, find an edge, forward test your system in paper and when you feel ready, do not risk more than 1% of your bankroll. I am sure, we’ll be hearing from you soon!
Uk Gambling Industry Profits
Below, you can find the five most recent articles I wrote about gambling.