Gamers like cocaine addicts
According to a news report from TG1, gamers are cocaine addicts. In what sense? On 12 April 2022, TG1 Diretta broadcast a service dedicated to the relationship between young people and new technologies (social media and video games in particular) in which the senator of Forza Italia, as well as journalist Andrea Cangini, intervened, truly questionable conclusions regarding a real problem, however, announcing a law proposal to regulate the matter.Cangini was on air to present his latest book, entitled CocaWeb, which should be the summary of the work done by Education Commission, of which Cangini is a member. According to the senator, all the experts interviewed by the commission (psychologists, neurologists, graphologists and others) spoke of a devastating impact of new technologies on the minds of young people. According to these experts, the use of new technologies, including video games, "can only degenerate into abuse" due to specific chemical mechanisms that would be triggered in the human brain. Even the effects of social media and video games would be "identical, literally identical" to those of cocaine because they would activate neurons that transmit the sensation of pleasure.
According to Cangini, video games and social networks are reducing the cognitive and mental capacity of young people, who have a lower IQ than in the past, as noted by whom it is not known.
Now, that the abuse of social media and also of video games can be a problem does not necessarily find us opposites, as indeed the abuse of anything is a problem, but addressing the topic in these terms gives us it seems counterproductive, as well as fundamentally false.
However the worst is yet to come, because Cangini has even raised the level of the attack, going so far as to make absurd alarmism, and then propose a solution that we do not hesitate to define ridiculous: "Anyone of us has a child drug addict in the traditional sense, he knows he has a problem and faces it. All of us, and I myself prefer not to face the problem of our children, who are no less addicted to the web than traditional drugs, because this allows us not to make ourselves This is why the book argues that there are many things to do, but not done. There will come a time as for tobacco: we have realized that smoking is bad, I smoke, and I know it is bad, and I believe that it is right that tobacco companies invest to say that tobacco is bad. I would like web companies to allocate part of their turnover to say that the web is bad for young people. "
So the solution would be to invest in notices such as those on p packets of cigarettes? Every time you open geekinco Pianesani must appear to remind you that playing too much video game could make you like him?
Have you noticed any errors?
The new middle-class gambling addicts: how day trading is ruining lives
Until he ended up jobless, bankrupt and with nowhere to live, Steven didn’t think he was a gambling addict. In fact, he didn’t even think he was a gambler — he thought he was a financial trader.
Like a growing number of mainly male professionals, Steven, an engineer, had started day trading from his laptop at home. What started as a hobby escalated quickly, and before long he had 200 internet tabs open across three different computer screens — constantly watching the financial markets, he said, making hundreds of trades each day.
He surrounded himself with graphs monitoring the markets’ movements on a number of platforms simultaneously, opening so many accounts that he barely kept track. He felt masterful, like a “conductor in control of an orchestra”.
But Steven was not in control. He stopped going into work so he could trade all day; eventually, he quit his job. His life became “a feverish, frenetic game of mouse clicking and window swapping and buying and selling”. He started craving ever riskier trades. At one point, he lost £10,500 in just 50 minutes. Still, he didn’t stop.
“It didn’t feel that much to me because I was on a quest to be a multimillionaire,” Steven said. “It was nothing, I’d pay it off down the line. I was constantly looking for a way to keep going.” In the end, he lost everything. He lost so much money trading — both on the stock market and new cryptocurrencies — that he went bankrupt and, for a time, was sofa-surfing and begging on the street.
Today, Steven is ten months into a rehabilitation programme for his addiction to drugs, alcohol and online trading. The programme is at Castle Craig, a private clinic about an hour from Edinburgh on the Scottish borders.
Clinicians are in no doubt that some “investors” — like Steven — are, in reality, gambling addicts, and the treatments offered are identical.
Online trading is widely conducted on platforms such as IG Index, Trading 212 and CMC Markets. While designed to enable legitimate activity, they offer the kind of reward-centred fulfilment loop that is attractive to addictive personalities.
The new cohort of addicts is a small but growing phenomenon. In 2016, the Castle Craig clinic treated just three patients who presented with an addiction to online trading. Last year, that number had risen to 54.
Some patients took part in regulated trading on platforms. Others had become addicted to crypto-trading such as in bitcoin — a practice that is separate and unregulated. Other clinics and helplines also report a rise in former “investors” coming to them for help.
“These individuals call it investing, but it’s a gambling addiction,” said Lee Rolleston, a therapist at a Priory clinic in Chelmsford, Essex. “People see the financial markets and sports betting very differently; we see them as the same.”
Lee Rolleston at the Priory clinic treats day traders. “These individuals call it investing, but it’s a gambling addiction”
CHRIS RADBURN FOR THE SUNDAY TIMES
Platforms that ushered in ‘trading for the masses’Until quite recently, only highly trained professionals could carry out financial trading in regulated markets. All that changed with the advent of trading platforms to which users could gain access from smartphones.
Some 1.8 million adults in the UK started day trading on online platforms during the pandemic, according to research firm Consumer Intelligence. Trading 212 became the most downloaded app in the UK in one week of January last year, while IG Index more than doubled its active users between 2019 and 2022— from 178,500 to 400,000.
These platforms — which allow anyone to trade once they have passed certain preliminary checks — maintain that they have “democratised” the stock market for the masses, allowing punters to trade their own money from home. For some, it is a profitable source of income — but for a small proportion, it can foster compulsive behaviour resulting in huge financial losses.
In the City, financial trading takes place in a highly regulated environment, with safeguards against unacceptable levels of risk. Those trading from home are much more isolated.
Investors on the platforms are up against not only professional traders, but also complex algorithms that are built to act on price fluctuations and patterns and execute trades instantly.
In such an environment, even conventional trading can be risky for a novice. But some of the trading platforms let their customers go even further — carrying out highly leveraged trades with huge potential downsides alongside the potential rewards. These high-risk trades — mainly contracts for difference (CFDs) and spread- bets, a nearly identical product — enable people to, in effect, make bets with borrowed funds, multiplying potential losses as well as gains.
Institutional investors and gambling charities have expressed bafflement that these sorts of trades are being sold to people without after-care, debt-repayment advice or signposting to addiction support services.
“It is totally insane for these platforms to offer these products [to the public],” said Gary Stevenson, 35, a former interest rate trader. “These are super-dangerous products, packaged as if they are a sensible financial investment. It’s like selling crack cocaine and pretending it’s a protein shake.”
‘They think they’re the Wolf of Wall Street … but it’s a loser’s game’From his home in east London, Stevenson can see the skyscraper in Canary Wharf where he used to work. In 2011 he was Citibank’s most successful trader, predicting long-term market trends in interest rates. Today he is retired — and worried. Since Covid, he is hearing more and more from old friends who have lost large amounts of money very quickly trading at home via the new platforms.
“The people at home think they are the Wolf of Wall Street,” he said. “But traders in the City are, in general, not taking bets on the short-term future of the market because there’s no way you can predict the movement. It’s impossible.
“I was one of the most successful and best-paid traders in the world and I don’t day trade. It’s roulette.”
Stevenson is particularly concerned by the way in which day trading is marketed as a sensible, white-collar activity.
Those who engage in it might never dream of entering a betting shop. Yet Stevenson says that for misguided amateurs, day trading in leveraged products such as CFDs can be equally high-risk, with the same euphoric highs and lows.
At Citibank, Stevenson was constantly monitored by the risk-management team, checking if he was trading erratically or dangerously. He could look up a lifetime of company data in order to inform his decisions — intelligence that is fiercely guarded — as well other databases to which access is expensive.
“[In institutions] there’s a complex supervisory system —for good reason,” he said. “But at home, there is no one looking over your shoulder.
“This means that people consistently use this internal accounting mechanism where they discount their losses and they think that they’re winning. It is the mindset of a gambler.”
The platforms say their customer trades are monitored by a risk team, though there is no requirement for a firm to intervene should a customer’s trades become irresponsible or dangerous.
They reiterate, too, that their business model does not depend on clients losing, unlike the gambling industry. As some people lose money very quickly, others make it in the same short time. It can be highly profitable.
IG Index emphasises that CFDs are not suitable for mass-market distribution and it is a proponent of regulation and customer protection. It maintains that investing platforms are markedly different to gambling. The Financial Conduct Authority (FCA) requires investment firms to act in the best interests of its clients, as well as identifying the target market for which the products are suitable.
CMC Markets and Trading 212 did not comment.
Rick Eling, a director at wealth manager Quilter, said customers who lack the sophistication needed for trading of this kind are in effect being “exploited” by the way in which trading firms provide them with access to short-term markets, where it is difficult to make money.
“The principles of investing are solid and slow and boring — it’s not sexy,” he said. “Investing involves patience and discipline. Day trading is all about flash-in-the pan gains — it’s a loser’s game.”
Apps that operate ‘like casinos’You must be over the age of 18 to open an account on the trading platforms. They offer “fake” money to practise trading, before graduating to a “real” account. You transfer a balance from your debit or credit card and have access to thousands of different markets. There are frequent warnings that most investors lose money.
But to clinicians, these platforms are enabling the same harms as gambling, with no proper recourse to help. Because, from a regulatory point of view, this activity is classed as investing, there is no signposting to addiction services, and no specialist treatment.
Many believe that the platforms, which make money on every trade — win or lose — are encouraging high-risk and highly addictive “investment” techniques to people who do not have sufficient understanding of the products involved. IG Index said it has received formal complaints from just 0.5% of the UK leveraged-client base and has controls in place for those users who exhibit vulnerable behaviour.
About 5 per cent of calls to GamCare, a gambling addiction helpline, are related to online trading. “We are largely funded by the gambling industry, so we are not technically funded to work with this cohort [of problem traders],” said chief executive Anna Hemmings. “But there isn’t any requirement for the platforms to signpost to organisations like ours, so it is very hard for people to know where else to seek help.”
Matt Zarb-Cousin is co-founder of Gamban, an app that can block access to gambling websites and apps. He said the platforms need to recognise that users are at risk of developing addictions, and should list supportive services and self-exclusion schemes. At the moment, he explained, “if you lost a huge amount of money on those sites, there would be nothing there that suggested you were anything other than a bad trader”.
His main concern is platforms offering access to leveraged, speculative products — and in particular CFDs, which allow traders to bet on the movement of a stock, rather than buying an actual share.
A CFD is an agreement between you and the broker to exchange the difference in the price of a stock from when a position is opened to when it is closed.
You put forward, for example, 10 per cent of the value of the stock. The broker lends you the rest to give you exposure to the full movement in price. This means that you receive an amplified win in comparison to your initial bet if it goes your way — and an amplified loss.
Spread betting, another popular day- trading product, is almost identical in both design and risk. It was invented by IG Index in 1974 and allows speculation in the price movement of a stock. A customer bets on how many “points” it will move up or down, using leverage to maximise gains and losses.
Such trades rarely happen in the financial industry. Spread betting and CFDs are largely “retail” products, allowing non-professionals with modest capital to benefit from movements in the stock market. These are very high-risk products — so much so that CFDs are illegal in the US and Hong Kong. Similar products are available in the US, but amateurs are limited in the number of trades they can place each week. In Australia, CFDs exist, but they are controversial and there are calls to ban them entirely. One federal court judge in Australia recently called them “financial heroin hits”.
“Platforms offering CFDs and leveraged products are casinos,” believes Zarb-Cousin. “It is appalling.”
In 2016, the FCA found that 82 per cent of clients had lost money executing these types of trade. The FCA became so concerned about firms aggressively selling these products that it drastically tightened its regulations in 2019. This move meant, among other things, that trading platforms now had to advertise on their websites the proportion of retail investors who lose cash trading CFDs. Today on eToro, it is 67 per cent; and at IG Index, it is 68 per cent.
For many of the UK’s vulnerable new self-styled traders, these statistics only add to the seductive nature of the challenge, and the dizzying — and potentially addictive — sense of triumph when a trade comes off.
Sarah Pritchard, executive director of markets at the FCA, said it would take action if it saw “poor conduct and consumer harm”. But some experts don’t feel regulation is moving fast enough.
The platforms themselves reject the comparison with gambling. They argue that they are appropriately regulated and that they turn away “thousands” of customers who do not “pass” their requirements. Knowledge questionnaires are required by the FCA; it is the responsibility of the platform to determine “whether the client has the necessary experience and knowledge in order to understand the risks involved”. IG Index said it rejects 20 per cent of clients each month who want to open an account, and lobbied for the “appropriateness” rules to be made more robust; the FCA chose not to strengthen existing rules.
However, when a Sunday Times reporter set up accounts with Plus500, CMC Markets and IG Index, there did not appear to be any significant barriers to participation in CFD trading and spread betting. The reporter took each platform’s short knowledge test and declared no previous experience of investment, day trading or leveraged products — and said they wanted to partake in high-risk day trading. All four accounts were fully approved. Eling at Quilter believes the tests “simply provide plausible deniability for brokers whose entire business models benefit from as many people trading as possible”.
Solicitor who became ‘obsessed’Rolleston at the Priory said that in his old job as a day trader for mainstream banks, including Deutsche Bank, in the 1990s and 2000s, he was “absolutely” addicted to trading — “the money, the ego, the prestige and the status.” But he said it was always kept under control by his bosses.
When people trade with their own money, he argued, it can become much more emotional and impulsive. “They feel they can always make a bit more — it’s never enough.”
For James, 51, a solicitor, the ease of day trading from his smartphone was his downfall. He first realised he had a problem when he found himself checking his phone under the table at a work meeting. It was a highly sensitive conversation and James sat there half-listening, one eye on the charts.
James had heard about day trading from an old friend on Facebook in 2016. Before long, he was checking his trading account 50 times a day. It became “an obsession” — the first thing he looked at in the morning, the last thing he checked at night. “The markets are almost like fruit machines — they change every couple of seconds,” he said. He put “all available income, all liquid assets” into trading, losing up to £3,000 in a single day.
He traded compulsively until 2020, when he went to a gambling addicts’ support group. Even now, he finds it difficult to resist entering into a trade — the charts are so easily available on the internet.
“I’ve been sold the delusion that there’s a lot of money to be made,” he said. “When I have a sneaky look, I think, ‘If only I’d done this, if only I’d have done that ...’ I think, ‘F***ing hell, I lost a six-figure sum.’ But I didn’t — because it never existed.”
‘I considered suicide after I lost £43,000 in hours’For some, addiction to the platforms has taken a big toll on their mental health.
Josh, 32, a Brit who works in IT and lives in Singapore, started day trading in January 2021, after hearing about it from friends. He was trading options, a leveraged product that, similar to CFDs, allows retail customers to speculate on price movements without owning the underlying asset. At first Josh won big, making £60,000 in three months.
“I really did think I was good,” he said. “When I lost big, I attributed it to the learning process.”
He started taking bigger positions, sometimes placing up to £40,000 on a single trade. “I was in this trance-like state,” he continued. Once, he lost £43,000 in hours, as he watched the market plummet. He barely slept and the next day considered suicide.
Eventually, Josh went to Gamblers Anonymous meetings and found a therapist. “I’m worried that many people don’t know they have a gambling addiction, just because it is the stock market,” he said. “Trading doesn’t have the same stigma as gambling.”
Man who hid a £300,000 savings loss from his wifeIt is common for those addicted to day trading to keep the extent of their losses a secret from family members, hoping to win back the money. The consequences for relationships can be devastating.
Sue, 67, had no idea that her husband of 19 years had traded away all their life savings until she went to sneak a Valentine’s card into his briefcase.
Her husband, who had a prestigious corporate job in the retail sector, had been hiding debt letters in the case. Sue found statements from 14 different credit card companies. “I couldn’t believe it,” she said. “My world fell apart.”
He had been day trading on a platform called E-Trade, now available only in the US. In just six months he burnt through their £300,000 joint savings and ran up a further £147,000 in credit card debt. While gambling sites are not allowed to take payments from credit cards, trading platforms are.
“He explained to me what he’d done — that he borrowed the money because he was losing money, then had to borrow more and more to try to get back what he’d lost.” His losses were amplified because he had been trading CFDs. He had started in 2006 wanting to increase their savings. This, however, was before the current FCA guidelines.
The couple had been planning to spend their savings on a long retirement and trips around the world. Now they had nothing. Their marriage broke down and they divorced.
Sue places a large portion of the blame on the platforms: “For every single deal, they earn a commission. It doesn’t matter if he’s buying or selling or winning or losing, they make money regardless.”
New rules fail to protect addictsApart from platforms having to publish information on the losses made by their customers, the new FCA regulations in 2019 stated that a client could not lose more than the total amount in their account. This means they are automatically removed from a trade if they get to that point. When this happens, their account is liquidated and they can be left with zero. Platforms were also required to have compulsory risk warnings and were no longer allowed to offer incentives to prospective customers.
But the warnings have become “white noise” to many people, said Carol McNaughton, co-author of research published last year by the consultancy Britain Thinks and the FCA. Only 41 per cent of investors with fewer than three years’ experience believed that losing some of their money was a genuine risk.
“People are used to seeing the disclaimer, and for those with the gambler mindset, which is a small proportion, it’s about bravado — they’re proud of being risk takers,” McNaughton said. “It’s difficult to make them listen.”
These “proud risk takers” are in evidence across thousands of groups on Reddit and Facebook for amateur day traders. They have developed a group identity — they are the little guys, taking down the big banks and hedge funds that have held power for too long. It is no coincidence that one of the most popular day-trading platforms in the US is called Robinhood.
In these groups, any warning from mainstream financial institutions, such as Quilter, that what they are doing is dangerous is rebuffed. They think the hedge funds are threatened and are simply trying to maintain their influence. Like a conspiracy theory, denial only goes to strengthen their identity.
Users also share advice on how best to make money — useful, perhaps, but also dangerous. Financial advisers for institutions are tightly regulated — they have to be approved by the FCA, gain qualifications and prove they are providing suitable and safe advice. People on Reddit, YouTube, Instagram and TikTok circumnavigate these requirements simply by stating at the beginning of a video that they are not financial advisers.
“Courses and videos about how to trade are unregulated and uncontrolled,” said Danny Cox at Hargreaves Lansdown, the asset management company. “You should take your information from a regulated source, where there’s some sort of recourse if things go wrong.”
Coming back to realityIn Castle Craig rehabilitation centre, nine patients sat in armchairs in a circle. They were in a wood-panelled reception room with big windows out onto the lawn. It used to be a children’s hospital and, before that, a stately home.
Seven of the nine in this gambling addiction therapy session have compulsively traded online. They are all male.
“At first I transferred only a small amount,” Tom said. “But then it became more and more, then I lost again ... and you keep paying in, keep chasing the win, and then you check your bank balance and it’s gone.”
Everyone nodded. The gamblers and the traders understand each other. They are in the same therapy session, after all.
Most people stay for four to six weeks of treatment, often with overlapping addictions, commonly to cocaine or alcohol. Steven’s addiction is so deeply entrenched that he has been here for nine months — yet Castle Craig has “steered” him back into the real world. “They’ve given me a life again,” he said.
The office of Tony Marini, the clinic’s specialist gambling therapist, has walls covered with letters from patients who he has helped to recover, next to crayon drawings of thanks from their children.
Patients wake up at 7am and begin the day with mindfulness sessions and then breakfast — followed by therapy, group work and exercise. The markets open and close at the same time each day, so trading addicts develop a body clock. Castle Craig works hard to override this.
Phones and laptops are taken away when they arrive, with limited access during the week to a shared computer. “We start to bring them back to reality,” said Marini. “Into the here and now.”
It took Sue a long time to put herself together. Today, she lives with her two dogs in a cottage on the south coast. “I don’t particularly want to get married again,” she said. “There’s too much to lose. I don’t want to be financially intertwined with anyone. I can see that I still survived — came out the other side. I am one of the lucky ones.”
How the companies make moneyYou are the broker, the trading platform, the middle man. You can buy an ounce of gold from the stock market for £99. You then sell it to the trader on your platform for £100. You make £1 on “the spread” — the difference between buy price and sell price
It doesn’t matter whether the price leaps up to £120 over the course of the day, or plummets to £80, and it doesn’t matter whether your trader wins or loses. You make money on the volume of trades that are made, and the width of the spread