It brings me no pleasure to conclude that this was not the case. The results are in. Legalized mobile gambling on sports, let alone casino games, has proven to be a huge mistake. The societal impacts are far worse than I expected.
The Short Answer
Joe Weisenthal: Why is it that sports gambling, specifically, has elicited a lot of criticism from people that would otherwise have more laissez faire sympathies?This full post is the long answer. The short answer is that it is clear from studies and from what we see with our eyes that ubiquitous sports gambling on mobile phones, and media aggressively pushing wagering, is mostly predation on people who suffer from addictive behaviors. That predation, due to the costs of customer acquisition and retention and the regulations involved, involves pushing upon them terrible products offered at terrible prices, pushed throughout the sports ecosystem and via smartphones onto highly vulnerable people. This is not a minor issue. This is so bad that you can pick up the impacts in overall economic distress data. The price, on so many levels, is too damn high.
Paper One: Bankruptcies
We start with discussion of one of several new working papers studying the financial consequences of legalized sports betting. The impacts include a 28% overall increase in bankruptcies (!).
Brett Hollenbeck: *Working Paper Alert*: “The Financial Consequences of Legalized Sports Gambling” by Poet Larsen, @dade_us and myself. We study how the widespread legalization of sports gambling over the past five years has impacted consumer financial health. In 2018, SCOTUS ruled that states cannot be prohibited from allowing sports betting, and 38 states have since legalized sports gambling. This has led to a large new industry and a large increase in gambling accessibility. Roughly $300 billion has been bet and is growing fast. (...)Paper Two: Reduced Household Savings
Paper Three: Increased Domestic Violence
The Product as Currently Offered is Terrible
All this is complemented by a strategy centered around free bet promotions (which makes the bonuses sound a lot bigger than they are), advertisements, promotional texts and emails and especially a barrage of push notifications. Anyone showing any skill? They are shown the door.
Things Sharp Players Do
I don’t think this is central to the case that current legal sports betting is awful, but it is illustrative what pros do in order to disguise themselves and get their wagers down. That to do that, they make themselves look like the whales. Which means addicts. I’m used to stories like this one, that’s normal:
People Cannot Handle Gambling on Smartphones
Vices and other distractions are constant temptations. When you carry a phone around with you, that temptation is ever present. Indeed, I recently got a Pixel Watch, and the biggest benefit of it so far is that I can stay connected enough to not worry, and not be tempted to check for things, without the pull of what a phone can do. And we have repeatedly seen how distracting it is for kids in school to have the smartphone right there in their pocket. I have learned to be very, very careful with mobile games, even ones with no relevant microtransactions. Putting gambling in your pocket makes the temptation to gamble ever-present. Even for those who can resist it, that is a not so cheap mental tax to pay, and likely to result in the occasional impulse bet, even without the constant notifications. First hit’s free. Constant offers that adjust to your responses, to get you to keep coming back. Now consider that at least several percent of people have an acute gambling addiction or vulnerability. For them, this is like an alcoholic being forced to carry a flask around in their pocket 24/7, while talk of what alcohol to choose and how good it would be to use that flask right now gets constantly woven into all their entertainment, and they by default get notifications asking if now is a good time for a beer. You can have the apps back up and running within a minute, even if you delete them. It was plausible that this was an acceptable situation, that people could mostly handle that kind of temptation. We have now run the experiment, and it is clear that too many of them cannot.
by Zvi Mowshowitz, Less Wrong | Read more:
Image: uncredited
I don’t think this is central to the case that current legal sports betting is awful, but it is illustrative what pros do in order to disguise themselves and get their wagers down. That to do that, they make themselves look like the whales. Which means addicts. I’m used to stories like this one, that’s normal:
Ira Boudway (Bloomberg): If I open an account in New York, maybe for a few weeks I just bet the Yankees right before the game begins,” says Rufus Peabody, a pro bettor and co-host of the Bet the Process podcast. If this trick works, the book sees these normie, hometown bets as a sign that it’s safe to raise his limits.It seems players have upped their game.
One pro bettor I know set up a bot which logs in to his accounts every day between 2 and 4 a.m., to make it seem like he can’t get through the night without checking his bets. Another withdraws money and then reverses those withdrawals so it looks like he can’t resist gambling. Simulating addictive behavior, says Peabody, is an effective way to get online sportsbooks to send you bonus money and keep your accounts open. This isn’t necessarily because operators are targeting problem bettors, he says; they’re simply looking to identify and encourage customers who are likely to spend—and lose—the most. This just happens to be a good way to find and enable addicts, too.The rest of the post is filled with the usual statistics and tragic stories. What I find interesting about these examples is that they are very level-1 plays. As in, this is exactly what someone would do if they thought they were up against a system that was looking for signs of what type of player you are, but only in the most mechanical and simple sense. For this type of thing to work, the book must not be looking at details or thinking clearly or holistically. If you had tried this stuff on me when I was watching customers, to the extent I noticed it at all, I am pretty sure I would if anything have caught you faster.
People Cannot Handle Gambling on Smartphones
Vices and other distractions are constant temptations. When you carry a phone around with you, that temptation is ever present. Indeed, I recently got a Pixel Watch, and the biggest benefit of it so far is that I can stay connected enough to not worry, and not be tempted to check for things, without the pull of what a phone can do. And we have repeatedly seen how distracting it is for kids in school to have the smartphone right there in their pocket. I have learned to be very, very careful with mobile games, even ones with no relevant microtransactions. Putting gambling in your pocket makes the temptation to gamble ever-present. Even for those who can resist it, that is a not so cheap mental tax to pay, and likely to result in the occasional impulse bet, even without the constant notifications. First hit’s free. Constant offers that adjust to your responses, to get you to keep coming back. Now consider that at least several percent of people have an acute gambling addiction or vulnerability. For them, this is like an alcoholic being forced to carry a flask around in their pocket 24/7, while talk of what alcohol to choose and how good it would be to use that flask right now gets constantly woven into all their entertainment, and they by default get notifications asking if now is a good time for a beer. You can have the apps back up and running within a minute, even if you delete them. It was plausible that this was an acceptable situation, that people could mostly handle that kind of temptation. We have now run the experiment, and it is clear that too many of them cannot.
by Zvi Mowshowitz, Less Wrong | Read more:
Image: uncredited
