Online Betting Will Increase Consumer Debt
As another online gaming site prepares to float on the stock market, an insolvency specialist has warned of the dangers of the growing popularity of internet gambling.
Bev Budsworth of The Debt Advisor says the company is already seeing victims of the new trend, some of whom have run up debts of over £100,000 playing Online Poker or in Online Casinos. She believes the rise in online betting will add further to the UK's consumer debt problem.
Her comments come as online casino 888.com prepares to launch on the stock market, following the flotations of PartyGaming, the world's largest internet poker site, and Empire Online, which drives new traffic to gambling sites.
Ms Budsworth says: "There has always been a certain proportion of debt problems due to gambling but the internet allows people to run up debts much more easily and much faster. With online gaming you can play 24 hours a day in the privacy of your own home. There's no need to set foot in a betting shop so there's no stigma attached.
"Unlike traditional gambling venues, where there is very much a cash culture, online gaming relies on credit cards. Once you have registered your card details you can play for as long as your credit limit allows without breaking off to get more money. I believe this is why we are seeing such high levels of debt amongst the new wave of online gamblers who are coming to us. It is reminiscent of the mid-1990s when some of the biggest debtors we saw were people who had been speculating on the futures market."
Ms Budsworth says many online gamblers follow the traditional pattern of trying to 'chase their debts', betting more and more heavily in an increasingly desperate attempt to win back the money to pay them off. As they do so, they resort to using multiple credit cards and running each to the limit. Friends and family may be unaware of their problems.
According to Her Majesty's Revenue & Customs, the amount of money spent on gambling in the UK rose from £8.6m in 2001 to £42.8m in 2004. These figures do not include money spent on websites which are registered outside the UK. Figures cited by PartyGaming in its proposal to the stock market predict that global revenues from online gaming will rise by 22 per cent a year over the next five years, with poker in particular growing by 44 per cent a year. Many companies are also offering gaming on mobile phones.
Ms Budsworth adds: "As well as the proliferation of internet sites, it's worrying that gambling appears to be getting a more glamorous image, with poker in particular being presented as a celebrity pastime and television programmes devoted to the game. The increasing amount of money spent on gambling could lead to a rise in consumer debt nationwide and debt misery for many more households."
