According to a new report from the University of Bristol, gambling treatment and support services need to better align with debt counseling, to ensure that the recovery pathways of those affected by gambling have more chances of succeeding.
The report in partnership with StepChange Debt Charity, supported by the Gambling Commission, finds that gambling is only rarely reported as a factor in debt problems, with around 2% of StepChange clients disclosing gambling associated with their debt.
However, gambling debt can be deeply damaging when it occurs and can seriously affect not only the individual, but also their loved ones. This is especially true if continued use of credit to fund gambling results in other bills not being paid, which can put homes and household finances at significant risk. Research reveals that those impacted by someone else’s gambling often go unnoticed, and much more needs to be done to ensure these customers are effectively supported.
The new report suggests that it is incumbent on gaming companies, credit providers and the advisory industry to recognize the specific issues that those with significant gambling debt may face, as well as the challenges and opportunities that arise when they seek to solve them.
Based on an analysis of 206,241 customer data records and interviews with 30 StepChange customers, authors Sara Davies, Jamie Evans and Professor Sharon Collard found that there are notable profile differences between people affected by gambling-related debt and the broader population of StepChange customers.
Customers who disclosed a gambling problem to StepChange were more likely to be male (71% vs 40% of all customers) and had higher average annual incomes (median income £18,000 vs £15,470 for other customers). They also had higher unsecured debt (£1,250 more in Q1-2 2021) and lower arrears (£2,178 in arrears vs. £2,791 for other customers). They suffered fewer enforcement measures (5.5% were the subject of a bailiff’s action against 9.2% for all customers).
A common factor in the stories of those interviewed is that gambling was facilitated by taking on consumer debt. Two other commonalities were pandemic shutdowns as a trigger for escalating gambling; and the incentives offered by gambling operators as motivation to gamble.
For most clients surveyed, gambling was the main or only reason for their debt problems. Typically, they had used consumer credit – overdrafts, personal loans, and credit cards (prior to the April 2020 ban on using credit cards for betting) – to finance gambling, at least point where all credit lines were exhausted. This explains the high levels of unsecured consumer credit debt seen in customer data.
Another cause of problematic debt, especially among those affected by someone else’s gambling, stems from the use of consumer credit to fill the financial hole left by gambling to keep the finances of the community afloat. household, as the person who gambles spends their gambling winnings. Secrecy was often a defining characteristic in generating gambling-related debt. , had an impact on the options available to them when they did.
Professor Sharon Collard, Research Director of the Center for Personal Finance Research at the University of Bristol, said: “Gambling debt is a serious problem that can lead to relationship problems, physical and mental health problems , even crime. Our historical study is an important step in understanding the link between gambling and debt problems.
“Given our evidence on the complementary and mutually reinforcing benefits of debt counseling and gambling treatment and support, it may be time to ask whether debt counseling should be routinely funded in as part of gambling treatment and support interventions and programmes. The experiences of debt counseling clients we spoke to also confirm the urgent need for measures to ensure that gambling operators prevent their clients from suffer significant financial damage.
Peter Tutton, Head of Policy, Research and Public Affairs at StepChange Debt Charity, added: “Gambling can lead people into a compulsive cycle which can be extremely damaging financially for them, and potentially their loved ones too. As this research shows, gambling vulnerability is complex and may require more than debt counseling to fix permanently.
“Gaming companies and consumer lenders must try to detect and address warning signs earlier, while the debt advice industry must continue to develop holistic ways of working with other services. counseling and support that those vulnerable to gambling need alongside their debt advice. . We will seek to work on practical ways to achieve these results, based on the information from the report.
Tim Miller, Executive Director of Research and Policy at the Gambling Commission, said: “Ongoing research into the harms of gambling has always been extremely vital in helping to understand causes and trends, and also in establishing ways to remedy these harms.
“This latest study uses data from StepChange in a new way to help better understand the role of gambling in consumer debt and, importantly, where certain organizations and their experts can connect with each other. It provides a another addition to the broader database that we welcome as an industry regulator.”