Many current practices that aim to minimize gambling-related harms are extrapolated from measures used in public health or substance use. There is little evidence to support the effectiveness of many gambling consumer protection policies and strategies, including many required by legislation across jurisdictions.
Some policies consider cognitive errors and the tendency of people to misunderstand gambling products. However, they largely fail to account for heuristics and resulting biases that drive ongoing gambling, even when people are provided with information to educate, encourage or scare them away from excessive gambling.
Behavioral science tools, stemming from a blend of psychology and economics, account for these human factors. These tools are typically low-cost, subtle tweaks to the decision-making environment that promote agency, encourage positive behavioral change, and result in significant measurable reductions in harms.
Despite decades of increasingly restrictive policies and measures to prevent gambling problems, the prevalence of problem gambling has barely shifted globally. Within the U.S., states with longer exposure to and greater availability of legal gambling tend to have higher rates of problem gambling. Some estimates put the social costs of gambling at approximately $20 billion annually, which does not capture all forms of impacts on individuals, families and communities.
It is time to consider a new approach to reframe our thinking and look more broadly across academic disciplines to address gambling harms in a way that would be beneficial for policymakers, industry operators and the community.
Neoclassical economics assumes that people have rational preferences among outcomes, strive to maximize utility, and act independently based on full and relevant information. In contrast, a behavioral economics approach to gambling policies and interventions acknowledges people do not always act in their long-term best interest, and introduces a range of relatively simple policy tools that better motivate behavior change.
Behavioral science tools such as commitment devices, personalized messaging, and more generalized “nudges” can be effective across the entire spectrum of gambling-related harms. These tools aim to overcome predictable heuristics in decision-making such as “loss-chasing,” “illusions of control,” “bracketing” of gambling funds (treating money won from gambling or in the form of chips/gambling account as only for gambling), and the “gambler’s fallacy” or “hot hand,” which mistakenly assume gambling outcomes are linked.
Changes to gambling venues and products may reduce the occurrence and strength of some of these biases. For example, stopper buttons on slot machines encourage illusory control beliefs. Roulette games display a history of red/black outcomes, which fosters the gambler’s fallacy, and slot machines provide losses disguised as wins whereby the player is congratulated for a win, with the value being less than that of the bet.
Gambling-related cognitions are not static; people may intend to gamble a set amount but switch to a more emotionally driven state when they gamble, making more impulsive decisions and spending more than intended. An obstacle for problem gambling prevention programs, such as education on the statistics of gambling, is that training the reflective system may fail to stop gamblers switching into the more emotional mode. As such, strategies that rely on providing people with education and information have a limited impact within a session, and may be more useful to discourage gambling at a population level.
Behavioral science does not intend to restrict behavior or reduce autonomy. However, it does recognize an “intention-action gap,” whereby people frequently fail to act on their intentions. Interventions are designed to bring large benefits to those exhibiting poor behaviors, while imposing little or no cost to those acting responsibly. Policies preserve the ability to choose what behavior to engage in, but make a positive behavior easier, simpler, and more attractive.
For example, customers can be automatically provided with regular activity statements including a clear summary of their net monthly gambling outcome that includes a statement and graphic comparing their outcomes with their own gambling from a previous time period, or to the average gambling customer. An accompanying behavioral suggestion would be based on their gambling patterns and risk indicators, and may suggest that they keep at this optimal level or recommend that they set a deposit limit with a direct link to do so. This is similar to techniques used to reduce electricity and water consumption.
Another cost-effective behavioral economics approach is personalization, which is highly relevant for gambling interventions. An increasing proportion of all gambling is now based on individual player accounts, which allow players to accrue loyalty points, keep track of their gambling expenditure, wins and losses, and receive communications from operators. Player accounts enable sophisticated harm-minimization strategies, including personalized messages that target players based on individual characteristics and patterns of play.
Such tailored feedback outperforms traditional warning or informative messages, as it is more likely to be read, remembered, and viewed as personally relevant. Tailored feedback is common practice in marketing and health communication due to its apparent effectiveness in changing behavior long-term.
Strategies that break a repeated and default pattern of responding can reduce mindless and unintended continued gambling, and potentially excessive expenditure. Increasing friction and decision points within betting may prompt gamblers to switch from an impulsive to a reflective state, and consider whether they want to continue gambling, take breaks, or stop altogether.
This may be achieved through dynamic messages that create a pause in play or appear in a natural break and ask customers to reflect on whether they need a break. Design changes to games may enhance active decision-making, such as prohibiting devices that automatically bet again and requiring customers to specifically place bets for each gamble and requiring a confirmation of bets and/or pause between bets being placed and accepted.
Pre-set courses of actions termed “defaults” are another powerful determinant of behavior, and are recognized in initiatives ranging from enhancing savings for retirement to increasing rates of organ donation. Default settings require people to make an active choice to opt out of, as opposed to opt into, a desired behavior. Relevant examples may include default cash-out of large wins and requirement to opt-in to receive regular marketing communications.
A key element in any behavioral science policy or program is measurement and evaluation. The best method to evaluate an intervention is through a randomized controlled trial (RCT), which is an experimental design that randomly assigns participants to a control (no intervention) or intervention group. This method allows the impact of the intervention to be determined by comparing behavioral differences between the two groups. To ensure evaluations are valid, it is important that stakeholders cooperate to enable independent researchers to access real customers and data and ensure results are made publicly available, including unexpected, null and negative outcomes.
Benefits for Stakeholders
There are many benefits of a behavioral science approach for policymakers, industry operators and gambling customers. These tools are a core component of a sustainable business model; evidence suggests that many gamblers are supportive of efforts to address gambling harms, and are willing to accept mild disruptions to their own gambling if the strategy is perceived to benefit others.
Research shows that gambling customers who engage with consumer protection tools have greater loyalty to operators. Evaluation is an important component of this approach, enabling any unintended consequences to be identified and any unsuccessful approach to be withdrawn.
Interventions are targeted to those who are most likely to benefit, and aim to make subtle changes that have incremental but significant effects across the customer base. The appeal of nudging is self-evident: it proposes a set of seemingly subtle, low-cost environmental and policy changes that can be applied to a wide range of individuals, or targeted groups. Consequentially, a behavioral science approach is being adopted by governments and industry leaders globally, and would have significant benefits for the gambling field.
There is increasing recognition of the responsibility and requirement for industry organizations (within and beyond gambling) to provide products and services that are in the customer’s best interest. Open gambling markets with competition between operators provide customers with a greater ability to seek points of differentiation. Simultaneously, policymakers must justify the increased availability of gambling with requirements for effective consumer protection measures.
We recommend that an evaluative framework be developed to guide an independent assessment and scoring of the extent to which an operator provides products in accordance with behavioral science principles. Accordingly, we propose the Behavioral Science Environmentally Friendly Scale (BEFS, Gainsbury, Tobias-Webb, & Slonim, 2020), which will be developed for this purpose.
Operators, venues or products would receive a score based on the extent to which they incorporate BEFS principles into their product design and services, and this score would be publicly displayed or even part of licensing conditions. This has significant benefits by providing a simple and transparent evaluative approach which would build trust in the industry and regulators, enable comparisons between gambling activities and jurisdictions, and offer a way for operators to signal their good intentions and sound practices towards offering a sustainable business.
This article is based on a paper published in Gaming Law Review by Dr. Sally Gainsbury, Dr. Juliette Tobias-Webb and Professor Robert Slonim from the University of Sydney. The full paper can be accessed here: Gainsbury, S. M., Tobias-Webb, J., & Slonim, R. (2018). Behavioral economics and gambling: A new paradigm for approaching harm-minimization. Gaming Law Review, 22(10), 608-617. https://doi.org/10.1089/glr2.2018.22106