Payback percentage research

Payback percentage research

April 8, 2010.

The European Gambling and Betting Association, home to many of Europe's largest online gambling groups, reported this week on recent research into payback percentage, carrying an interview with Dr Jonathan Parke, senior lecturer from the University of Salford.

We reproduce key elements from the EGBA interview:

EGBA: What was the objective of this research?

JP: The objective was to provide the first comprehensive literature review on the impact of payback percentage on gambling behaviour, with a particular focus on the areas of problem gambling and social responsibility.

EGBA: What is a payback percentage?

JP: Payback percentage is the percentage of stakes given back to players in the form of prizes over the long term on a particular game. At any given stake level, the lower the payback percentage, the higher the price to play the game over a specified period of time, and vice versa. The payback percentage is a key competitive element in the gambling industry that contributes to the price that is paid by a player to place a bet or play a game.

EGBA: Why address payback percentage in the context of problem gambling?

JP: In the context of gambling reforms, some EU Member States are introducing a restriction on the payback percentage with the expectation that it will reduce problem gambling. It is therefore important to consider the appropriateness of such a restriction and whether it should be prioritised. This was the exact purpose of this review: namely, to examine the existing research on a potential relationship between payback percentage and problem gambling.

EGBA: What are the main findings?

JP: The review concluded that there is no credible evidence to claim that the payback percentage has an impact on problem gambling. As a result, there is currently no evidence to suggest that placing a maximum limit on payback percentage would be an effective means to prevent or reduce levels of problem gambling.

This conclusion was in part due to the fact that the research on this subject so far has focused on gambling behaviour more generally and not directly on the impact of payback percentage on problem gambling specifically.

That's why the review also had to consider studies examining the opinions of specialists and experts in the gambling field. These specialists consistently rated payback percentage as one of the least important factors affecting problem gambling. Also, specialists did not discriminate between a higher or lower payback percentage as being more likely to impact problem gambling.

For example, in one study (White et al, 2006) the ‘researcher' group of specialists ranked both a higher payback percentage and a lower payback percentage as the joint least important factors contributing to problem gambling out of 27 possible parameters.

Based on this current review, I conclude that there is no scientific evidence at the moment to formulate any definitive regulatory policy regarding the appropriate controls of payback percentage to prevent and minimise gambling-related harm.