Internet and Gambling: Insights from Australia's NBN Rollout.

Abstract

Gambling is a well-known leisure activity that leads to significant consequences when consumed excessively. We provide an analysis of the impact of access to faster and more reliable internet connection on gambling. We rely on variations in the rollout of Australia's largest infrastructure project, National Broadband Network (NBN) installation, to measure internet speed at the postcode level. Using gambling data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, we find that access to high-speed internet is associated with a decline in gambling proxied by the Problem Gambling Severity Index (PGSI). However, a closer look at the various forms of gambling show that internet speed is associated with an increase in online-based gambling activities, which constitute a relatively small proportion of gambling activities that Australians participate in. In contrast, internet speed is associated with a decline in venue-based gambling activities, which constitute a large proportion of gambling activities that occur in Australia, and therefore explains the overall negative effect on gambling. We find that social capital and cognitive functioning are channels through which internet speed influences gambling.