GamCare warns of betting harm in crypto investment

The UK problem gambling charity commissioned research into the crypto investment space.

UK.- The gambling harm charity GamCare has warned that crypto investment can cause gambling harm. It raised the concerns after publishing data from a YouGov study into investments. 

GamCare noted that, according to the study it commissioned, those experiencing gambling harm were more likely to own cryptocurrency. Some 51 per cent of problem gamblers had made such an investment, compared to 11 per cent in the general public. The charity noted that 40 per cent of people had lost money on cryptocurrency, compared to 34 per cent who made a profit.

GamCare financial harm manager Raminta Diliso said: “For many consumers, cryptocurrency purchases are a way to diversify their investment portfolio. However, what we have seen on the National Gambling Helpline over the past few years is that serious harm can occur if it goes too far and it’s not always the get-rich-quick opportunity some people may think it is.

“The volatility and unpredictability of these currencies can sometimes create a similar environment to gambling, where people are starting to chase the rush rather than feel they are engaging in a financial activity.”

GamCare said that in two years, the National Gambling Helpline, which it runs, had recorded more than 200 calls due to problems with online financial markets including crypto, with cases of people losing over £50,000.

Harriett Baldwin MP, Chair of the UK government’s Treasury Committee, said: “The Treasury Committee recently took a close look at the state of the cryptoasset market. The sharp peaks and drops in the value of cryptocurrencies clearly demonstrates the risks speculating on them can pose to consumers.

“Trading of cryptocurrencies, like Bitcoin, is equivalent to gambling. By betting on these unbacked ‘tokens’, consumers should be aware that all their money could be lost.”

In October, GamCare called for a rethink on proposed changes to the rules for electronic gambling machines (EGMs) at land-based gambling venues in Britain. It argues that relaxing limits on the number of machines would increase the possibility of harm.

The government’s Gambling White Paper proposes allowing larger land-based casinos to increase their EGM capacity to 80, while smaller venues would be allowed up to 20. It also intends to revise the 80/20 ratio on high-stakes vs low-stake gaming machines.