Betting and gambling are exciting forms of entertainment that are probably almost as old as mankind. Wagering money or something else of value on a random event or game of chance, directly appeals to our reward system, even if we do not win. However, it only remains entertainment as long as it is enjoyed responsibly, meaning with moderation.
Understanding gambling and its impact
Gambling is a demerit good, meaning it has a perceived negative effect on the consumers themselves. These effects can vary from physical or mental health risks or socially undesirable effects such as affecting relationships or even causing crime. If market forces of supply and demand would be given free reign, this could likely lead to overconsumption and problems that affect a significant part of the population.
For this reason demerit goods like gambling, alcohol, tobacco and even junk food are almost always regulated. Regulation deems matters such as rules with regards to marketing and advertising, requiring licences and imposing excise or sin taxes, all to avoid or reduce the consumption and the negative effects on consumers and society.
Taxation and Price Control Strategies
One of the most effective ways is controlling the price of goods and services via extra specific taxes. We see this with alcohol and tobacco, and in recent years even with sugary drinks. Where the so-called ‘sugar tax’ in the UK is only cents a litre, it led to a decrease of 35% in the amount of sugar sold in soft drinks. On the other side of the world in Australia, tax on tobacco tripled the price of cigarettes which has led to halving the number of smokers over the past few decades.
Unfortunately such a method cannot work for gambling due to its unique business model. Even if a gambling tax of 50% would be applied, it is applied only to the winnings. Players will still win something, just less. Whether it be small or large, any prize won will trigger the reward system.
The Responsibility of Gambling Operators
Responsible betting therefore relies heavily on a regulatory system which sets rules and enforces them. Although regulations differ from country to country, in essence they are all the same as they serve the same purpose: the protection of consumers.
Marketing Tactics and Social Responsibility
Some matters, such as advertising, affect all consumers in a country. Regulations here could be used to limit the time frames on television and radio that are allowed to be used, or limit the use of role models that appeal to a younger or even underage audience.
The regulations that affect the betting side, are generally referred to as “Responsible Gaming”. Here we find all matters that regard the prevention of problem gambling, such as dictating that information about problem gambling should be readily available. Also, players must be offered ways to exclude themselves, meaning they will not be able to play at all for a certain period of time. Finally there are tools that offer players different ways to moderate their game, such as deposit or loss limit, or limits on the amount of time a player can be logged in.
However, these rules determine the minimum efforts operators need to make. Making information and tools available does not guarantee that information is read and understood, or that tools are effectively used. As gambling operators have a financial interest in players spending as much as they can, they have no incentive to apply these rules any stricter than necessary.
For the outside world online gambling companies are often seen to try to shift the focus away from actual responsible gambling, towards their many ‘social responsibility’ initiatives. Although these initiatives show companies taking a form of responsibility, it is not the kind that affects their actual customers.
Personal Responsibility in Betting
Although a social licence to operate is certainly an important aspect in this industry as it is in others, going beyond legal compliance with regards to responsible gambling would have immediate and serious negative consequences for operators’ bottom lines.
Setting Limits and Recognising Manipulation
As a customer that wants to responsibly place a few bets, what is it that you should take into consideration when dealing with a company that wants to make as much money as they can? For this, we have compiled a list of essential things to consider prior to registering at a bookmaker or casino site. Start with reflecting on the following questions.
- Are you susceptible to addiction?
- Do you realise how big the chances of losing really are?
- Are there other activities that you would enjoy more than gambling?
If any of these questions are answered affirmatively, it is prudent to avoid involvement in gambling. The likelihood of experiencing adverse outcomes is considerably high.
If you decide that you want to try your luck and think you can enjoy it safely, it would be wise to ask yourself the following before actually registering:
- How much time and money are you willing to spend extra on entertainment?
- How much money can you afford to lose?
- How will you react if you start showing the first signs of problems?
- What do you consider a large prize, and how will you react to winning that amount?
After you find a trusted online gambling site, you should immediately apply your answers to these questions whilst registering and immediately after. As we mentioned, all operators are mandated to offer tools that allow you to set limits. Depending on your country and the specific operator, the number and types of limits will differ, but the basic ones such as a deposit limit, or time limit per session should always be available.
Also, be aware of dark patterns and tricks used to manipulate the decisions you make. The most common example of this is pre-filled fields. Most operators do not leave the fields for limits or deposits empty, but have an amount ‘suggested’. These amounts are chosen to seem reasonable, but will be higher than what you have decided. Resist from falling for this trick and remember to stick to your own amounts. Maybe you should take this moment to also consider if you should even lower them a bit more. In the end at least nine out of ten players lose all the money they deposit – even if they win.
The Reality of Bonuses and Loyalty Programs
Another example of manipulating people into spending more are bonuses and loyalty programs. You should realise that these are always funded by yourself and other players. Companies simply don’t give away free money, that is an unsustainable business model.
Bonuses come with special conditions that make it virtually impossible to benefit from them, and the loyalty ‘rewards’ are only worth a few percent of the amount of money that you have lost.
With regards to losing, precaution is better than cure. As soon as you feel the urge or need in thinking of recovering losses with more bets, it is time to immediately stop playing and take a time-out. Not for the rest of the day, but a longer period of time, possibly even forever if needed. Thinking that you can beat the system shows that you have lost touch with reality, the house is the only one that ever wins in the long run.
In the case that you do win, make sure that you know how to deal with the outcome too. In the excitement of the moment, you wouldn’t be the first one to start placing bigger bets and lose everything you won within no time.
Conclusion and Takeaways
We can conclude that despite regulations, the responsibility still largely lands on the customers shoulders and it would be a mistake to assume betting companies have your interest in mind. This is not a problem that cannot be overcome, but it does put a group of players that is influenced more by marketing and ads than articles like this at risk.
Luckily regulations are constantly evaluated and adapted to new insights and regulators all over the world are very much aware of the situation. In the meantime, play safe or don’t play.