Gambling is strongly associated with poverty. People in deprived areas gamble riskier. In Romania, the gambling and betting industry is also the one that spends more on online advertising

Romania has over 13,600 gaming halls. And recent European studies show that people from disadvantaged areas are among the most exposed to risky gambling consumption. It reflects the reality that the burden of addiction or problem gambling is felt more strongly among poor populations and accentuates already existing social inequalities.

• People from disadvantaged areas are more likely to bet on higher odds with less prospect of success. “The most vulnerable are lured and exploited.”

• Studies from around the world indicate that bookies’ income comes not only from those who lose the most gambling, but also disproportionately from those who cannot afford to amortize those losses.

• The Finns tried state monopoly, but it was not a solution to all the socioeconomic risks associated with gambling.

Five of the top ten companies in Romania that spent the most on online advertising in 2023 are betting and gambling companies, according to BRAT monitoring. And together, they give a market share of 22.1%. The ubiquity of gambling ads online comes in a context where multiple studies point to a correlation between gambling and increasing poverty.

“One of the few opportunities for financial advancement”

The poorer the neighborhood you live in, the greater your risk of having a gambling problem, according to a 2014 University at Buffalo Addiction Research Institute study.

Based on telephone interviews with 5,000 Americans between the ages of 14 and 90, the study found that people in neighborhoods with the highest levels of concentrated poverty were twice as likely to have problem gambling than those in the richest neighborhoods. “Gambling can be seen as one of the few opportunities for financial advancement and perhaps offers an attraction as a means of making easy money,” commented John W. Welte, a senior researcher at the University at Buffalo, regarding the published study. in Journal of Behavioral Addictions.

It is just one of many studies that have highlighted the complex relationship between betting/gambling and poverty/social inequality.

A similar conclusion was reached three years ago by researchers from the University of Liverpool and the National Center for Social Research in Great Britain.

According to this research, people from deprived neighborhoods are more likely to play at online casinos, but also to make bets with very risky odds.

In 2021, a systematic review of 27 studies from different countries showed that problem gambling is correlated with several measures of poverty, including:

• housing instability

• disadvantages related to the neighborhood of residence.

Those with lower incomes spend proportionally more on gambling

If we look strictly at the amounts, gambling expenses tend to increase with the player’s income. But people with lower incomes spend a higher proportion of their total budget on gambling, according to a Finnish study published in 2018.

Similarly, gambling harm appears to be associated with lower individual or household incomes, most likely due to lower ability to absorb financial losses.

In other words, gambling-related financial harm affects those who have the least resources to cope with it. They end up bearing most of the burden of the economic cost of gambling. Thus, gambling can act to increase social inequality and poverty, an international team of researchers explains at length in the book “Setting limits: Gambling, Science and Public Policy”.

Those with low incomes continue to play even in economic crises

This effect is accentuated by certain consumption behaviors highlighted in other research. For example, although gambling participation rates in wealthier groups fell during recessions, rates in disadvantaged communities stagnated, a 2014 New Zealand study showed. This suggests that less affluent people are more prone to gambling in times of economic stress.

In the same study, people from the most disadvantaged groups were 4.5 times more likely to experience arguments or money problems because of gambling.

The size of the problem

The dimensions of the problem are overwhelming, due to the unprecedented spread of the phenomenon.

About 4.2 billion people gamble at least once a year. And a recent study conducted in 44 countries showed that 56% of those surveyed had gambled at least once in the past 12 months.

In the UK alone, the Gambling Commission estimated in 2019 that 2 million people in the UK suffer in one way or another from problem gambling.

In Romania, the institutions have not conducted any study related to the number of addicts or people affected by the problematic consumption of gambling.

We have over 13,600 gaming rooms

The only figure comes from a study commissioned by the industry in 2016, which estimated that there were around 98,000 problem players 8 years ago, according to Libertatea.

However, an idea of ​​the prevalence of consumption is given by the very large number of gambling halls: over 13,600 in 2021, according to the Ministry of Finance, quoted by G4media. That is, one room for approximately 1,100 adults.

Gambling revenue as a ‘regressive tax’

Because gambling tends to garner greater financial flows from people with the lowest incomes, the amounts collected by governments from gambling can be considered “regressive taxes”.

The regressive tax means that those low-income taxpayers pay a disproportionate share of the tax burden, while middle- and high-income taxpayers bear a relatively small tax burden.

The same study by the University of Liverpool showed that most of the amounts lost by players are small, but 70% of the income of bookmakers and gambling companies actually comes from the 5% of consumers with the biggest losses.

The ratio is even more impressive among sports bets. 86% of sportsbook revenues came from the biggest losers, The Guardian explained, citing the study.

And in this case, people from disadvantaged areas were more likely to bet at higher odds with a lower prospect of success. “The most vulnerable are being lured and exploited by an industry motivated entirely by profit,” said Labor MP Carolyn Harris when the study was published.

The Finnish experiment. No state monopoly could protect against the negative effects of gambling

In Finland, gambling is organized as a government monopoly. The profits thus obtained are used to fund welfare and health, culture and art, sports, war veterans, science, youth and horse breeding. The operation of many non-governmental organizations is also based on gambling income.

However, the Lottery Act, which is the basis of Finnish gambling legislation, cannot prohibit foreign companies from offering online gambling services, and participation on foreign sites is legal. In addition to the very large number of gambling sites available, Finland has an exceptionally wide range of gaming machines, which can be found in supermarkets, kiosks, gas stations, cafes, etc.

Up to two-thirds of the money came from people with addictions or risky gambling.

Currently, Finland is the only EU state with a government monopoly on gambling. However, in October 2023, the Finns announced that they would also give up this monopoly, after this public policy also did not prove successful in keeping problematic consumption under control.

Even if the profits were reinvested in causes beneficial to society, the problems of addiction or the financial and social risks associated with gambling consumption could not be effectively combated.

More precisely, over 40% of gambling profits (in 2019) came from people with problematic consumption.

There is also a cluster phenomenon, in that a small group of players (2.5%) brought in around half of the gambling revenue – a situation similar to that described in the British study.

And among these high-intensity users, up to two-thirds of the money came from people with addictions or high-risk gambling, according to 2020 statistics.

Those who benefit from social assistance are among the most exposed to risky gambling consumption

Finnish researchers have shown that among gamblers, those on welfare are more prone to risky consumption, including gambling addiction.

In addition, a third of Finns with problem gambling received some form of social benefit, indicating that these social payments ended up being partly spent on gambling.

Given that the amounts given by social assistance are small, it was most likely that people were diverting this money from essential everyday expenses (like food or bills). Such a phenomenon increased inequality and poverty, the Finnish researchers explained.

In other words, multiple international studies show that the income of bookmakers and gambling companies (even when they are state-run, as in Finland) comes not only from those who lose the most gambling, but and disproportionately from those who cannot afford to absorb these losses.