Which type of risk is gambling

Pure Risk: There are only two possibilities; something bad happening or nothing happening. It is unlikely that any measurable benefit will arise from a pure risk. The house will enjoy a year with nothing bad occurring or there will be damage caused by a covered cause of loss (fire, wind, etc.). Predicting the outcomes of a pure risk is accomplished (sometimes) using the law of large numbers, a priori data or empirical data. Pure risk, also known as absolute risk, is insurable.

Speculative Risk: Three possible outcomes exist in speculative risk: something good (gain), something bad (loss) or nothing (staying even). Gambling and investing in the stock market are two examples of speculative risks. Each offers a chance to make money, lose money or walk away even. Again, do not equate gambling and investing on any other level than as both being a speculative risk. Gambling is designed to enrich one party (the house); the odds are always in its favor. Investing is designed to enrich all involved, the house that set up the "game" AND those that chose to place money in the game - all participants with "skin in the game" win or lose together. Speculative risk is not insurable in the traditional insurance market; there are other means to hedge speculative risk such as diversification and derivatives.

The 2016 Foundation-funded study Assessing gambling-related harm in Victoria identified seven types of harm experienced by people who gamble and those close to them.

These harms can be experienced on a spectrum that extends from no harm through to very severe harm. They can range from minor negative experiences to crisis point, which is often when people consider seeking professional help for their gambling. Severe harm can sometimes have a lasting impact, known as legacy harm, which can even transfer to the next generation.

In general, harm increases as the risk of problem gambling increases, so we see it more frequently in moderate-risk than low-risk gambling, and it is most prominent in people experiencing problem gambling.

The seven types of gambling harm identified are:

• relationship difficulties
  
• health problems
  
• emotional or psychological distress
  
• financial problems
  
• issues with work or study
  
• cultural problems
  
• criminal activity.
  

Relationship harm is the most common type of harm from gambling. It is a quarter of all gambling harm experienced by Victorians.

Relationship harm includes neglect of responsibilities, conflict, threats to end a relationship and the actual ending of a relationship.

People affected by someone else’s gambling are more likely than those who gamble to report conflict or tension in the relationship as a harm from gambling.

25%

of all gambling harm = relationship difficulties

‘We were always arguing and it was not only affecting me but also everyone around us, including my children.’

Health problems account for one-fifth of gambling harm in Victoria. They include stress, reduced sleep due to worry, depression and anxiety disorders.

Increased use of health services because of issues exacerbated by gambling is a strong sign of harm among people who gamble and those close to them.

People experiencing problem gambling are more likely to be diagnosed with depression (41.9 per cent) compared to moderate-risk gamblers (24.1 per cent). They are also twice as likely (39.5 per cent) as moderate-risk gamblers (20 per cent) to be diagnosed with anxiety disorders. Around one in 10 low-risk gamblers report experiencing depression or anxiety disorders.

‘I had depression and anxiety. At first, I thought, “I wonder what’s causing this?”’

21%

of all gambling harm = health problems

24%

of moderate-risk gamblers have been diagnosed with depression.

42%

of people experiencing problem gambling have been diagnosed with depression.

Emotional or psychological distress accounts for 18.6 per cent of gambling harm in Victoria.

Regret is an early sign of harm for people who gamble, while feelings of anger and hopelessness are early signs for people affected by someone else’s gambling.

‘I felt worthless, not even good enough to talk to people.’

‘I thought it was just me; I was the broken thing.’

Financial problems account for 15.6 per cent of gambling harm in Victoria.

Reduced spending on other recreational activities is the least severe financial harm and an early sign of harm for people who gamble and those close to them.

‘I started risking money that should have been for necessities.’

‘I couldn’t afford my rent. I couldn’t afford food.’

Issues with work or study account for 8.6 per cent of gambling harm in Victoria.

An early sign of harm is absenteeism among people who gamble and those close to them – this can also relate to other types of harm, such as emotional or psychological harm.

‘I was an erratic and difficult colleague.’

‘I was missing lectures, going to the TAB and betting online.’

Cultural harm is often connected with relationship harm because of the strong links between family and culture.

Cultural harm can include the personal conflict of gambling when it is against cultural beliefs, reduced ability to participate in cultural practices or meet community expectations, and reduced connection to the cultural community. It can result in shame, emotional distress and social isolation, and contribute to feelings of lost identity.

Given the important role of family, cultural harm can be felt intensely by those affected by someone else’s gambling. As the notion of shame is particularly strong in some cultural groups, gambling harm can have long-term effects (for example, damage to the family name), that can even have implications for the next generation.

Criminal activity is more associated with problem gambling than less severe levels of risk.

The three main types of criminal activity connected with gambling harm are crimes of negligence such as child neglect (for example, leaving children unattended in venue car parks), crimes such as drug trafficking or prostitution to repay debts, and crimes of opportunity such as theft and fraud to fund gambling.

'It didn’t end until I heard the words: "You’re under arrest"'.

Criminal activity can result in considerable long-term harm, including shame and stigma, a criminal record and the consequences of a prison sentence.

Victims of criminal activity can also be profoundly affected by this form of gambling harm.

'I met other grandmothers inside. They had also stolen money to fund their gambling.'

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