Over-indebtedness and Problem Gambling
In economy, loans are recognized as a factor that can stimulate growth, enhance opportunities, and facilitate financial stability, whether we talk about state or individual economies. Yet poor loan management (excessive debt, high-interest rates, or reckless borrowing) can lead to financial crises, regardless of the theoretical virtues of a loan. Such crises are not always standalone issues that one individual may resolve with their own or others’ resources. Specific conditions of the borrower may potentiate such crises and connect them unfortunately to other problems. It is the case with problem gamblers.
In this article we will explore the findings of a study that examined whether and how specific gambling patterns are related to problem gambling and over-indebtedness.
Loans and financial debts in problem gambling
Financial hardship is one of the most visible and immediate harms of problem gambling. Individuals often spend beyond their means, leading to depleted savings, mounting debts, and, in severe cases, bankruptcy. Studies indicate that approximately 20-30% of problem gamblers experience severe financial distress, which can also lead to housing instability and reliance on social services. Financial stress can exacerbate mental health issues and negative emotional states, which in turn strain relationships and social connections.
Such unwanted consequences are more attenuated in the financial stress caused by borrowing money for other reasons, such as business startup and investment, acquisition of personal goods, education, and so on.
Therefore, the financial harm is able to produce “cascade” harms for problem gamblers, hence the association between indebtedness and problem gambling is particularly baneful.
Background and aims of the study
Over the last two decades, problem gambling came to affect more and more individuals. The prevalence of problem gambling, according to the empirical studies, range from 1% to 5-6% of the adult population.
The negative consequences of problem gambling are well known and include financial debts, with their cascading harms, including suicidal ideation and suicide attempts.
A study in 2018 showed that problem gambling may lead to psychological distress by either a direct pathway or a pathway driven by financial debts. Several studies have found that financial debts entail psychological distress and suicidal behavior independent of a gambling disorder condition, while over-indebtedness is associated with depression, suicidal ideation, and sleeping problems.
Although online gambling exploded over the last two decades and such form of gambling has been found to be particularly addictive due to its speed and availability, surprisingly a lower psychological distress has been found in online gamblers compared to the land-based casino gamblers. Yet there is evidence that treatment uptake may be lower in online gamblers, which strengthen the hypothesis that a more problematic pattern is in effect in online gambling. This also entails a higher risk of indebtedness in online gambling.
In 2020, problem gambling researchers Anders Håkansson and Carolina Widinghoff from Lund University in Sweden published a study aiming to examine financial debts and problem gambling symptoms in online gamblers and how debts and problem gambling are related to psychological distress, specific online gambling activities, gender, and socio-demographic data. Their study hypothesized that problem gambling differs by past-month gabling activities reported and – given the role of indebtedness – over-indebtedness differs by gambling activities reported.
Participants, methods, and measures
The study is a cross-sectional survey conducted in a 1009-size sample of adult general population of gamblers, who declared that they gamble or placed bets online 10 times or more in the last 12 months.
Gambling involvement was assessed by asking the participants about their play during the past 30 days, across ten different gambling activities.
Psychological distress was measured on a scale including six core symptoms: nervousness, feelings of hopeless, restlessness, depression, feelings of being worthless, and the feeling that everything in life is an effort. Problem gambling was measured using the PGSI (Problem Gambling Severity Index), a scale that includes nine symptoms related to that condition.
Financial debts and over-indebtedness as variables were assessed by brief questions about monthly income, history of loans, including questions about whether an individual have ever borrowed money for gambling or to cover losses from gambling, and whether this happened during the last 12 months.
A statistical analysis using logistic regression examined the descriptive data and variables associated with three outcome measures, namely a history of over-indebtedness, expected over-indebtedness during the next two months, and problem gambling severity.
Statistical results of the study
In regard to the problem gambling criteria, 13% of the participants have been found to meet them. Then, 23% met criteria for low-risk gambling and 44% had no gambling problem. Problem gambling was more common in women (24%) than in men (10%).
The lifetime history of over-indebtedness was endorsed by 10% of the participants, while 11% endorsed the occurrence of over-indebtedness during the past year.
Over-indebtedness was declared by 28% of those reporting past 30-day online casino gambling and sports live betting, 18% of recent casino gamblers (without sports live betting), and 6% of recent sports live bettors (without online casino), and 6% of those reporting none of these gambling activities.
By logistic regression, lifetime history of over-indebtedness was significantly associated with psychological distress, higher degree of problem gambling, and alcohol problems. When the PGSI factor was excluded in a second model, lifetime history of over-indebtedness was significantly associated with psychological distress, alcohol problems, and past 30-day combined online casino and live betting.
Expected future over-indebtedness for the next two months was declared by 20% of those reporting both online casino gambling and online sports betting, 15% of online casino gamblers, 4% of live sports bettors, and 3% of those neither reporting any of these two activities during the past 30 days.
Only 9% of the participants had a lifetime history of gambling-related borrowing. Of them, 51% reported loans from private acquaintances, 41% from payday loans, 34% unsecured bank loans, and 15% secure bank loans. Of those 9%, 76% were problem gamblers and 14% were moderate-risk gamblers. Having borrowed money for gambling was reported by 27% of those reporting both online casino gambling and sports betting, 15% of recent online casino gamblers, 2% of live bettors, and 2% of those reporting neither of these two gambling activities during the past 30 days.
Hypotheses confirmed and new findings
The statistical results confirmed the following hypotheses: First, problem gambling and over-indebtedness differ across types of gambling activities. Second, no gender differences were observed with respect to problem gambling and over-indebtedness.
The study found a high prevalence of problem gambling in individuals engaged in online gambling (also confirmed by the wide majority of such studies), and high rates of over-indebtedness. In addition to the gambling pattern, over-indebtedness was associated with psychological distress and alcohol problems, while expected future over-indebtedness with a lower level of schooling.
One of the novel findings of this study was the lack of association between male gender and over-indebtedness, which otherwise would somehow be expected, based on the studies showing that men are overrepresented in problem gambling.
Level of education was negatively associated with over-indebtedness, in contrast with the findings of some studies pointing out lower education as a risk factor of problem gambling.
Implications for prevention policies
The high rates of problem gambling and over-indebtedness found in online gamblers call for more effort in the side of prevention policies, against the online gambling harm.
Given the differences in harm found across different gambling activities, preventive measures need to be designed specifically for each individual gambling activity, and not in bulk. This includes the call for regulating legislation regarding casino gambling, in what concerns content and casino advertising.
In the health care sector, the current findings indicate the need for increased attention to online gambling as potential hazard to health, with or without parallel risk factors such as psychological distress.
The relation between online gambling and over-indebtedness also suggests that authorities who meet individuals with debts and financial difficulties may need to address online gambling in their screening tools. The same principle applies to consumer credit counselors and collection and enforcement authorities.
Such prospective measures involving reference to online gambling could contribute – on the one hand – to maintain loans as a virtuous economic service for all its users – and on the other hand to protect problem gamblers against the cascading harms of the financial debts.
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