For government gaming regulators, the legalization of online gambling is proving to be a double-edged sword. On one side, there is a welcome influx of much needed tax revenues being realized; on the other, there is the potential for an increase in social costs borne by citizens, specifically the subset of individuals most at-risk for potential addiction.
Given that modern gambling apps can now facilitate ‘one-click’ mobile access, government regulators are increasingly focusing their attention on measures to mitigate the risks posed by the increased accessibility of gambling products. While temporary or permanent self-exclusion is regarded as one of the most effective tactics to help at-risk gamblers limit their access to online gambling products, self-exclusion continues to be an under-utilized protective measure with a minimal percentage of gamblers currently enrolled in self-exclusion programs.
Given that self-exclusion typically occurs at the point when problem gamblers are already exhibiting an increase in at-risk gambling behaviors, regulators are increasingly focusing their efforts on protective measures that occur further upstream in the gambler’s customer journey. Following its successful application across a broad range of social issues, one area of study that is proving particularly promising is the application of behavioral insights.
One such study has been facilitated by GambleAware, Great Britain’s Strategic Commissioner of gambling harm education, prevention, early intervention, and treatment. In 2021, GambleAware’s Behavioural Insights Team (BIT) completed the 2nd phase of a study to analyze the effectiveness of direct interventions in the gambler’s customer experience to reduce risky betting behaviors. Operating under the hypothesis that behavioral analysis of gamblers within their chosen online betting environment can reveal possibilities for reducing risky play, BIT focused the first two phases of their study on the following tactics:
In behavioral science, anchoring describes the phenomenon whereby many people display a bias in their choices or judgments whereby they over-rely on the first piece of information they receive, even if it is random or irrelevant: this information becomes a reference point (an ’anchor’) for making decisions. Commitment Devices take behavioral interventions a step further, creating a choice architecture entered voluntarily by an individual to deter them from breaking their intentions. A commitment device generally takes the form of a penalty for non-compliance, either psychological (a ‘soft’ commitment) or economic one (a ‘hard’ commitment). A good example of an economic commitment device is a person signing up for a year-long gym membership to reinforce a long-term goal to get more fit with a financial disincentive to prevent quitting too soon.
Although there is a wide range of behavioral patterns associated with problem gambling, recent analysis indicates the amount of money bet on platforms is by far the most important predictor of who is a problem gambler, with four variables (mean daily stakes, variation of daily stakes, variation of daily returns, mean number of deposits per day) sufficient to effectively differentiate between low- and high-risk gamblers.
Given the predictive power of these particular behaviors, BIT hypothesized that a critical point in the at-risk gamblers’ journey occurs when they designate a deposit amount and/or deposit limit for their subsequent wagering. It is here that the anchoring effect is evidenced, specifically when the gambling application provides either a drop-down menu or a pre-defined deposit limit to guide the bettor’s subsequent deposit decision(s). Within the context of anchoring behavior, including a higher suggested amount in these menus can lead customers to select higher deposit limit amounts and, in turn, spend more money gambling.
Working directly with the licensed operator, Bet365, BIT evaluated three different versions of a standard deposit limit tool:
From 45,000 customers invited to set a deposit limit, 1,731 (4%) did so, with the study confirming that deposit limit options with high anchors led people to set higher limits. In fact, offering lower values or a free text box reduced the average deposit limit selected by nearly 45% (from an average daily limit of £1,601 to £867). In addition to reducing the value of the deposit limits set, a statistically significant portion of study participants, between 4% and 18%, deposited less as a result of these modifications to the deposit limit tool.
Based on this analysis, GamblingAware concluded that deposit limit tools should not present any anchors presenting people with arbitrarily high denominations. Instead, customers should be presented with a free text box with no visible or suggested minimum/maximum monetary amounts displayed. A relatively small change to the betting interface, this is nevertheless a powerful behavioral modification to protect the at-risk gambler given the point at which it occurs in their customer journey, and especially so given the importance of deposit decisions in the overall risk assessment profile of a bettor.
Such behavioral insights are a boon to North American gaming regulators seeking immediate and easily achievable wins to protect at-risk citizens amidst the growing availability and immediate accessibility of online gambling offerings. By making such deposit limit modifications a license condition and/or code of best practice OR by encouraging such changes through reputational incentives, government regulators and licensed operators are participating in a mutually beneficial partnership framework that lowers the risk for at-risk gamblers without restricting the freedom of choice for those citizens who gamble responsibly.
Such freedoms are a crucial consideration for the forward-thinking government gambling regulator as evidenced by the Phase 2 findings of the GamblingAware study.
In this phase, modifications to the customer experience were tested to strengthen the impact of the existing deposit limit tool via the implementation of a soft commitment device. Specifically, customers were asked to either choose or write their personal reason for setting their chosen deposit limit in the hopes that such a commitment would impose a psychological cost incentivizing a customer to comply with their chosen deposit limits. Drop-down options included reasons, such as ‘A deposit limit will help me stick to my budget’ and ‘I want to spend less time playing.’ Customers subsequently received SMS text reminders containing the text of either their chosen personal commitment or the text of the advice they would give to a third party.
Interestingly, this usage of soft commitment device actually had a ‘backfire’ effect within the context of the study with this intervention leading to a lower uptake of deposit limits. Potential reasons for this effect:
Given the findings which appear to indicate a backlash against the fairly invasive nature of this particular behavioral modification, it speaks to the importance of gambling regulators working in partnership with licensed operators to facilitate a regulatory environment and customer experience that works for all. This includes both the relatively small percentage of gamblers at-risk for addiction outcomes AND the large percentage of citizens who gamble responsibly.
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