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Problem Gambling and its Relevance to the Banking Sector


By Dr Sean Sullivan PhD

Since the following article was written, there has been an increase in the amount of money that New Zealanders have spent on gambling, up from $1.7B in 2002 to over $2.0B in 2005. The Gambling Act was passed in 2003 to both control the growth of gambling and to reduce harm to individuals, arising from problem gambling, with the Ministry of Health being responsible for harm minimisation.

There has been, since the article, a continuing arraignment of bank personnel before the Courts for dishonesty charges when they have disclosed gambling problems. Whereas gambling problems and dishonesty are commonly associated outcomes, the possibility of greater risk for the banking industry remains an open question. Problematic gambling behaviour has been found to develop amongst those who are under emotional and/or financial stress, where gambling opportunities are available (numerous in New Zealand), and where financial sources to fuel the gambling exist. The latter influence is of particular relevance to the banking sector, as employees with privileged access to accounts can utilise this to provide a means for quick access to more funds.

Gambling problems often escalate after a ‘win’, with skewed thinking that it is their lucky day and winning will continue, or that they are now playing with free money. Consequently, it always remains a possibility that with the presence of large sums of cash potentially accessible, and perhaps with assumed opportunities to be able to use and repay it before discovery, this may contribute to increased, and ultimately, uncontrolled gambling. With these special circumstances existing in the banking sector, and with the increased spending on gambling despite the legislation, a proactive approach may reduce the impact of problem gambling in an industry that may have greater risks due to idiosyncrasies in its business.
(February 2006)


In 2002, New Zealanders spent in excess of $1.7B in legitimate gambling, with a steady increase every year that is resistant to variance in the economy. Estimates by the Department of Internal Affairs indicate over 90% of New Zealanders gamble, higher than most overseas countries. Accessibility to gambling is greater than most other countries, and an Act is in place now to control aspects of gambling, in most cases opportunities to gamble will grow.


Problem gambling appears to be increasing in prevalence. It is often driven by increased opportunities to gamble in the community, greater accessibility to finance, growing stressors in modern communities, and the unpalatable fact that it appears all people that participate in gambling may have a risk, in varying degrees, of developing a gambling problem. Gambling problems can develop quickly, and each mode of gambling appears to have different risks attached as well as problem-development timeline. For example, regular playing of video gambling machines can, for some people, create dependency problems within a matter of months of first playing, and currently account for the majority of problems for those seeking problem-gambling counselling. Other risk variables appear to be age, ethnicity and socio-economic status. Gender has ceased to be a risk factor with both males and females appearing to be at equal risk (although this may vary between gambling modes). Problem gambling appears to be a behaviour that can affect individuals at any stage in their lives, with substantial social, financial and health costs to the gambler and their family.

Confusingly, although winning of money can be an important driver in gambling, as the gambling becomes more problematic, other effects may maintain the behaviour despite substantial losses. As problem gambling develops, an addictive process of ‘tolerance’ often develops resulting in more gambling and greater losses over time.

Therefore, problem gambling presents a complex addictive behaviour with often few historical indicators to indicate a particular person may be at risk.


Although gambling, through its legitimate industry, offers both opportunities and risks for the Banking Sector, risks may increase from two sectors:

  • Banking customers who develop gambling problems and who have a credit arrangement with a bank


  • Staff in the banking Sector who develop a gambling problem

There is a third influence that is less overt and has relevance because of the recent amendments to the Health & Safety in Employment Act, namely stress. Many staff experience stress that arises from a member of their family who may be gambling problematically. For many affected family members, help-seeking to reduce their own stress may not be seen as a priority, as they focus upon the behaviour of the gambler. Nevertheless, health costs can be high for these family members with ongoing effects upon their well-being, and workplace.


There are many theories as to why people develop gambling problems. Some suggest that there may be a biological aspect i.e. that people may inherit a higher risk or have some biological need that gambling or another addictive behaviour meets. Other theories identify the aspect of a psychological propensity, including the powerful reinforcement aspects that money can have when provided in an irregular manner in sizeable amounts. Others still will emphasize the social aspects of gambling, that the growing, prominent position that gambling holds in New Zealand society and increasing accessibility results in growing participation. In many cases, sudden stress (death of a family member/friend, unaddressed workplace stress) can initiate increased gambling that is experienced as relief from pressure, as well as excitement.

Perhaps the widely supported viewpoint is a combination, commonly described as a biopsychosocial model, with aspects of all contributing. This fits with problem gambling being viewed as an addictive behaviour when it reaches a particular point (with gambling, this point will vary between people more so than chemical addictions).

A common process
Irregular wins result in a tolerance for periods of accumulating losses, and a perception that continued gambling is a necessity to address the debt. As problem gambling develops, rather than learning that gambling is entertainment that can be costly and an unprofitable enterprise, money becomes devalued, with seizable wins and losses tolerated. Escape from intrusive problematic thoughts, rather than winning money, may become the most influential driver, with heavier gambling involvement (both time and amount wagered) being required to maintain the thought avoidance. The process therefore becomes somewhat circular, with increased gambling causing increased problems, and stronger impetus to participate in heavier gambling behaviour.

This change in gambling behaviour can be relatively quick, especially with newer electronic forms of gambling. Many problem gamblers will report regular losses of between $500-$1,000 per hour on a five cent gambling machine. As other gambling modes adopt electronic access to gambling, so will both the prevalence rate and speed of problem development increase.

There is little awareness by the gambler that gambling problems are in the majority of circumstances accompanied by depression, with the thoughts often serving to ‘make sense’ of an irrational behaviour, without realising that gambling may ‘medicate’ this depression. When gambling, the gamblers mood can lift through dissociation from dysphoric thoughts (and central nervous system chemical change).


With the propensity of gambling problems to develop rapidly, historical indicators become less reliable.
Many clients of specialist treatment providers for problem gambling will present with credit cards and other banking arrangements at or exceeding their limits. The cost of credit is less important for these people because their experience is often large wins (and less acknowledged losses) over a brief period of time. The lack of satiation found in other addictions does not apply to problem gambling, with many wins being an immediate influence to gamble harder, while growing debt becomes a reason to continue to gamble, rather than to stop.

The impact for the banking sector is a sudden, often out of character increase in indebtedness that will not be disclosed as due to gambling, for obvious reasons. The indebtedness is often spread through the establishment of different lines of credit, usually credit cards. High usage can also result in the credit facility being increased, which is immediately accessed by the gambler.


Access to credit
The credit limit being reached often is an impetus to those with gambling problems to access further credit cards, often providing inaccurate information to gain credit approval. Many will not see this as a criminal offence, but rather as a temporary necessity that will be remedied as soon as an appropriate win is received. There is generally a lack of acceptance that such wins are rarely applied to repay a debt but may merely be applied in meeting the minimum periodic payment. Wins are often perceived as opportunities to participate in other winning experiences, while debt payment seen as losing that opportunity. Depression may blur both logical decisions and previous moral barriers.

Crossing the line
Once debt has built to level that appears to be unmanageable, panic may set in. The relative lack of overt symptoms for problem gambling together with ability to lose large amounts of money within a brief period, means that there can be sudden pressure upon a gambler to both obtain money to address the financial problem (gamble to win) and to hide the extent of the debt from others. Shame and guilt over the extent of the gambling debt, and the criticism of others if revealed, can spur problem gamblers to access others’ money and cross a line that would previously have been seen as unimaginable. This will often be internalised as a loan that will be repaid promptly. Gambling can be erratic and accelerated in a manner described as ‘chasing’ wins.

Resisting disclosure
Initial dishonesty can be well-hidden and/or may take advantage of positions of trust. This is indicative of the sudden onset of problem gambling and that it can affect previously trustworthy people with strong work ethics who are rewarded with authority. The stress of maintaining a further secret, one that may result in loss of employment and condemnation, will further accentuate the depression and facilitate increased gambling. This circular process will often continue with more haphazard ‘borrowing’, and as realisation grows that the sum has exceeded any ability to repay, hope can be lost. A ‘numbing’ effect is common, with a relief experienced by the gambler when the theft is finally discovered. Many problem gamblers attending counselling will speak of the relief at being caught, at the surprise and dismay at the quantum of money taken, and at the realisation that they are to be prosecuted.

Restitution unlikely
There is little likelihood of restitution because of the nature of the addiction: problem gamblers tend to spend their own money first when gambling, borrow, then gravitate to dishonesty. An exception is the occasional antisocial personality disordered gambler who may also apply the money towards assets to support a higher standard of living.

Occasionally family may provide a source of repayment, but in many cases these assets have been the first to be accessed by the gambler. Lack of ability to provide restitution, coupled with the often large quantum of money stolen before discovery, means that problem gamblers receive custodial sentences, while the money is never repaid.


There is no reason to consider that those who chose a career in banking will be any more likely than others to develop gambling problems. However, if gambling problems are becoming more common, can develop quickly and gamblers attain substantial losses within a brief period of time, and can be fuelled by access to a ready supply of money, then the banking sector has particular risk aspects. Trust is an important commodity in banking, with many employees required to provide control and access to substantial amounts of money. Gambling problems can develop rapidly and be due to stress either within or outside of the workplace. As money is ‘devalued’ by increased gambling, desperation can result in a perceived temporary arrangement of ‘borrowing’. The perception may be that if their employee is aware of their financial mismanagement, or worse the extent of their gambling, that their career may be ended. The incremental increase in gambling can occur without full appreciation by the gambler.

The predicament they find themselves in may be one that will result in considerable loss of status, career opportunity and self-esteem. The option of a temporary solution may be seductive, while also permitting continued gambling. In the banking sector, losses can be high because of the necessity to rely upon trust, knowledge of processes that can be used to camouflage the theft process, the possible low awareness of risk, and rapidity of the gambling losses. When identified and made public through prosecution, such substantial losses can also be detrimental to the public’s perception of the safety of their money with the bank, and can be a further cost to the bank.


Because of the particular problem gambling risk factors applicable to banking and the relative few symptoms of this disorder, a comprehensive strategy is appropriate. They include:

  • Awareness by bank management staff of the prevalence, practices and processes of problem gambling so as to deal with both customers and employees who may be affected; also to be aware that employees may also be affected by a family member’s gambling which may affect their own well-being and performance
  • Information and knowledge provided to employees as to at-risk behaviour for gambling, help-seeking resources and support
  • Develop a culture that encourages help-seeking, while also supporting co-employees to deal effectively with an employee with a potential gambling problem
  • Resources such as pamphlets, posters and screens to enable self-identification of developing gambling problems. The Early Identification Gambling Health Test (EIGHT Screen) provides a brief, simple opportunity to employees to test their behaviour and take advantage of addressing it early (with higher successful outcomes)
  • The brief family screen (COGS) provides an opportunity for employees with a family problem gambler, who may be affected adversely, to identify their stress and help-seek
  • Development of a safe process whereby employees can disclose dishonest behaviour earlier, before escalation
  • Awareness that stress which may result from gambling behaviour, if more likely to occur in a banking environment, may place higher responsibility on the banking sector as a result of the new Health & Safety in Employment Amendment 2003.


Problem gambling is growing in prevalence and has been found to affect certain groups to a greater extent. The Banking Sector has particular risk factors that are able to be addressed pro-actively. A comprehensive approach that recognises that, in many cases, problem gamblers are caught by an addictive process rather than due to a particular personality, may ensure that problem gambling is either avoided or addressed earlier that it might otherwise be, with beneficial results for the banking sector.