People in deprived areas are more likely to use online casinos and place risky long-odds bets, according to a study that found gambling firms make the vast majority of their money from the 5% of accounts that rack up the biggest losses.
Researchers from the University of Liverpool and the National Centre for Social Research found that most gambling accounts lost relatively modest sums, but that firms make at least 70% of their revenues from the biggest losers.
In sports betting, that proportion rises to 86%, with people in deprived areas more likely to go for longer-odds wagers with a lower prospect of success.
Gamblers from the poorest areas were also more likely to lose money in online casinos, which the study found presented a particular risk of high-intensity play despite lower overall losses across all players.
Nine out of ten online casino accounts either won money or lost less than £500 over the course of a year, but 164,000 lost more than £500 during a single session of play, and 47,000 people lost more than £5,000 in a year.
This group was disproportionately likely to come from deprived areas and to have lost their money on virtual slot machines, which carry a higher rate of addiction than most other gambling products.
Slots accounted for more than half of losses above £5,000 and 70% of sessions where someone played for three hours without taking a break.
More than 14,000 accounts did this three times during the year, often at a rapid pace although in practice this could have been a smaller number of people doing so more often, as the study could not factor in users holding various accounts.
Three-quarters of slots accounts had “spun” the machines more than 30 times in a minute at some point. The maximum spin speed is set to be reduced to 24 times a minute.
“This all reaffirms my thoughts that those most vulnerable are groomed and exploited by an industry entirely motivated by profit,” said the Labour MP Carolyn Harris, who chairs a cross-party group advocating gambling reform.
“We saw it with the clustering of bookies in deprived areas, when the FOBTs were a huge money maker,” she said. “We are seeing it now with online. How can we trust this industry to self regulate when they have repeatedly shown themselves to be predatory and merciless in their pursuit of profit?”
Campaigners for tighter affordability checks on gamblers said the study showed that such restrictions would not curb most people’s freedoms.
Of accounts used to bet on sport, 85% lost less than £200, while 90% of gaming accounts either won money or lost less than £500 over the course of a year.
“This confirms what we have known for a long time, that the vast majority of online gambling profits are coming from people losing more than they can afford,” said Matt Zarb-Cousin of the Campaign for Fairer Gambling. “Affordability checks introduced for losses equivalent to £100 a month would apply to fewer than 5% of gamblers.”
The Betting & Gaming Council, the industry lobby group, said gambling firms had improved controls since the study was undertaken. “There is growing evidence that recent improvements in standards are now starting to have an impact,” the BGC said.