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Investor Problem Gambling

Financial markets gambling is the least studied major area of gambling by social scientists. In two separate studies by the Connecticut Council on Problem Gambling, one with stockbrokers and the second with securities attorneys, the findings indicated that brokers and attorneys agreed that the financial markets provide a large number of vehicles in which investors gamble and that the level of risk in the more speculative areas of the markets is equal to or greater than the risk in a casino.

Clinical evidence indicates that problem gamblers who have gambled exclusively in the areas of business and the financial markets have met the same diagnostic criteria of pathological (compulsive) gambling as problem gamblers in recreational forms of gambling. Some problem gamblers move from the financial markets to recreational gambling and vice versa or may do both simultaneously.

Problem gamblers in the markets rarely receive treatment for this problem by mental health and addictions professionals. This lack of recognition and attention is understandable given the fact that it took Gamblers Anonymous 29 years (from its founding in 1957 until 1986) to include stock market investment and trading as a form of gambling which should not be engaged in by recovering gamblers.

The National Gambling Impact Study Commission, which is exclusively examining gambling and problem gambling in recreational forms of gambling, has turned to the brokerage industry for suggestions regarding consumer safety practices which may have relevance for the gaming industry. While this action may be helpful, it is ironic that the securities industry was consulted in view of the fact that denial is pervasive about the existence of gambling and problem gambling within this industry.

The CCPG is not aware of any literature available through a brokerage firm that attempts to increase awareness or expresses concern about the issue of problem gambling. Government regulatory bodies have also been silent on this issue, with one recent exception. In June, 1998, after extensive review of the CCPG pamphlet, "Investing and Gambling Problems", the SEC's Office of Investor Education and Assistance began providing the pamphlet to investors who request related information.

Prevention of Problem Gambling, August 1998