Behavioural economics is helping transform the world of online wagering by giving problem gamblers more information about the costs of their actions.
In 2018-2019, Australians lost an estimated $25 billion on legal forms of gambling — the largest per capita losses in the world. In part, these losses are the result of easy access to online wagering, a form of gambling that’s exploding in popularity across the country.
At the UTS Business School, behavioural economist Professor Robert Slonim was taking notes. He had a longstanding interest in the behaviours that underpin online wagering — and a radically simple idea to help people curb their losses: if online punters could easily see how much they were losing over time, would it change how much they wagered?
This question became the basis for a research partnership between Professor Slonim and his collaborators at the Behavioural Economics Team of the Australian Government (BETA), the University of NSW and the University of Tasmania. Today, the answers are transforming online gambling regulations in Australia.
Against the odds
One of the big challenges that gamblers face, says Professor Slonim, is that they’re inclined to underestimate how often they’re losing. What’s more, very few have an understanding of their gambling expenditure over time.
“There’s this very stark behavioural information being offered to people where it may appear that you’re winning more often than you are,” Professor Slonim says.
As behavioural economists, the researchers understood the power of feedback as a tool to drive behaviour change. Professor Slonim hypothesised that if punters received simple feedback on their overall wagering losses over time, they would change their betting habits.
“We started thinking about the best way to provide feedback that would give people a better sense of how much they’re either winning or losing overall,” he says.