Parental influence and online gaming are being blamed as key factors for nearly a third of NSW youngsters gambling.
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A state gambling study of children aged 12-17 has prompted an education program that will target parents as well as their kids.
A survey of more than 500 NSW children last year found 29.8 per cent had gambled, some as young as 11.
Informal private betting was the most common, followed by scratchies and lotteries.
Also significantly, few of them were gambling alone.
"Gambling usually happening with a parent or another adult relative," said Natalie Wright, the director of the office of responsible gaming.
"The study found parents were the strongest influence on youth gambling, so we need to educate adults as well as young people."
While 53.7 per cent of underage gambling happened with parents or guardians, only 9.1 per cent happened alone.
Another key finding from the survey was that about 40 per cent of youngsters in the study had played a video game or app with gambling components.
The study found gaming and gambling are converging within online products.
"These games which mimic real gambling are potentially gateways to traditional gambling for young people," Ms Wright said.
She added that while underage gambling is illegal, 21 per cent of children in the study had reported punting on lotteries, scratchies, keno and sports and horse racing.
Australian Associated Press
