The gambling industry is hoping to use advances in gaming technology

The gambling industry is hoping to use advances in gaming technology and the widespread use of mobile phones to capture huge new markets. Problem gambling already has a significant impact on the community, however, and not everyone is so keen for the future of gambling. Antony Funnell reports.

Natasha Schull has spent more than a decade dealing with the impact of gambling addiction. Not on her own life, but on the lives of scores of people she’s met and interviewed. She’s listened to their stories and heard how they feel.

One man told me he forgets the names of his children when he is gambling. It is really this state of nothingness. The zone is not a state of excitement.

NATASHA SCHULL, MIT

What makes Schull’s research different, however, is that she’s also studied the machines that enslave them—the sights, sounds and other technological cues that help keep problem gamblers in what they call the ‘machine zone’.

‘The zone is a state in which time falls away,’ says Schull, an associate professor with MIT's Program in Science, Technology and Society. ‘One man told me he forgets the names of his children when he is gambling. It is really this state of nothingness. The zone is not a state of excitement.’

Counterintuitively, many of the problem gamblers Dr Schull has met and interviewed during her years of research have told her they no longer play to win, but to stay in the zone.

‘People may begin gambling because they hope to win, because they are after the thrill of it, the anticipation of it, and they may be excited the first times they gamble, but those who gamble enough to become problem gamblers or gambling addicts, these are not gamblers who sustain that level of excitement.

‘Through their interactions with these devices, they learn that what the machine is really good at is not giving them a win, but giving them numb hypnotic relief. That's what they then begin to seek. I like to say sometimes that the thrill of winning may be the hook, but the zone is the hold.’

Dr Schull estimates that between 75 to 90 per cent of gambling revenue in the United States comes from what Australians call poker machines or pokies.

‘They aren't designed to manipulate gamblers in the sense that people are sitting around in some corporate boardroom rubbing their hands together and saying, “How can we addict people?” But they've got massive volumes of data showing which features people play more intensively, which are more profitable and which aren't.

‘It's just like McDonald's: the way they learned the recipe for their hamburger was seeing where the lines were longest. In that sense it's not this intentional drive to addict people. The intention is to make more money. The technological innovations that we've seen since the 1980s have really empowered that project of increasing revenue through slot machines.’

Money is being made at staggering levels. Industry research firm IBISWorld estimates the global casino and online gambling industry is now worth just under $285 billion and is expected to grow by around 5.3 per cent annually over the next five years.

According to senior analyst Spencer Little, there’s also an important redirection underway in the industry, with a push by the major US and European gambling operators to carve out a larger stake of the growing Asian market. Their main target is China’s nouveau riche. In fact, the Las Vegas Sands Corporation, the world's largest gaming company, now reportedly makes more than 65 per cent of its total revenue from its Macau-based operations.

‘They often offer incentives, subsidies and other packages to attract these gamblers to their casinos,’ says Little. ‘For example, accommodation and dining services may often be subsidised in an effort to get these patrons to place really large wagers on casino games. This can obviously have a great effect on revenue and profitability for casino operators.’

There are now more than 35 mega casinos operating in Macau alone, with new casinos also recently built in the Philippines and Singapore, and three mega casinos approved for the Queensland and New South Wales.

According to Spencer Little, there are also signs that the government of Shinzo Abe is preparing to drop a long-standing prohibition on casino development in Japan.

‘This could really provide a lucrative opportunity for global casino operators, but also for Australian casino operators that are targeting these Asian patrons in particular,’ he says.

Perhaps the big surprise about the international gambling boom is how little revenue is currently generated by the big gambling operators through online platforms. By most industry estimates, online gambling only accounts for  around 20 per cent of total revenue. But it is an area that’s expected to grow and heavy investment is already underway.

Tony McAuslan is an industry veteran and the CEO of an Australian company called Spincycle Gaming. He’s also held positions with two of the world’s largest gaming machine manufacturers: Aristocrat and IGT. He says many countries still have bans on online gambling, but he’s confident that’s likely to change in the near future. Governments, McAuslan jokes, spell gambling, ‘T, A, X.’

‘I certainly think every government, both in first world countries and other countries around the world, has got an eye on the money that goes into online gaming,’ he says.

‘They are all seeing that the best way for them to get revenue is to legalise online gaming. That's where the trend is going to. All governments eventually will either issue licences or certainly will find ways of taxing people that are using online gaming.’

McAuslan says gaming machine designers are now working to incorporate elements of social gaming into their technology in order to attract future generations of gamblers.

‘There are lots of companies looking at things like virtual reality, surround sound, touch-screens, even things where the chair and the screen vibrate when you touch them so that you feel a sensation of movement.

‘There is this word—“immersion”—where younger people are more immersed in a game. If you watch the games that they play, they are not just sitting there idly playing the game, they are actually immersed within the game. There's more sound. There's all sorts of graphics that make it feel like you are surrounded by things and you are actually in another world.’

According to McAuslan, the holy grail of gaming design and development is capturing a chunk of the mobile media market.

‘Pretty much everywhere you go people have got a phone. Games and gaming on phones is probably going to be one of the biggest emerging industries in the world. Somewhere like China, where they've got 750 million subscribers on mobile phones, they are looking for other ways of entertaining themselves, so games are where it's all happening.

‘The way that you attract people is either short, sharp games where they can use their memory or become attracted to various characters that they like to follow or there's the thrill of winning, which is what wagering games are. Incorporating a winning element or wagering element into a skill game is probably the next generation of games that everyone seems to be going to.’