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.
A question of design
The researchers started by creating a series of activity statements in different formats that documented wagering expenditure, wins, losses and net position over a quarter and then over 12 months. These statements were loosely based on image-based utility bills that were designed to help people better understand their energy usage.
“The first thing we wanted to understand was how to provide this information as simply as possible. Should it be a chart? Should it just be numbers? Should it be colour coded? Where should the information sit on the page?” Professor Slonim says.
“We wanted people to be able to look at this for few seconds and clearly see the impact.”
If wagering amounts decrease by eight percent across Australia, this could save punters hundreds of millions of dollars in wagering losses every year.
- Professor Robert Slonim
Next, the researchers conducted a series of eye tracking experiments to better understand what people paid attention to when they looked at the varying statement formats. The results shaped the development of two different designs that the researchers then tested in a simulated wagering activity.
In this experiment, 1500 participants were given ‘lab dollars’ that they could use to bet on blocks of animated horse races. After each block, some of the participants received one of the two activity statements, while a control group received no summary feedback.
Both activity statements were successful in getting people to bet less, but one — a simple bar chart that contained red bars for losses and green bars for wins — stood out. Punters who received no statement bet an average of $368, compared to $340 for those who received the bar chart — a reduction of eight per cent. Those who received the other statement bet an average of $350.
“Although the statements didn’t affect how often people were betting, it did affect the amount people were betting,” Professor Slonim says.
“It was clear they were losing money. It was also clear they wanted to keep gambling, but they realised from looking at the statements that this was getting costly for them.”
Transforming gambling regulation in Australia
The results of the research have directly been translated into new state and territory regulations that came into effect from July 2022 – now, online wagering organisations are required to provide a monthly activity statement to their account holders that’s based on the research prototype.
While it’s still early days, Professor Slonim is confident that these statements will play an important role in helping to reduce online wagering expenditure in the world outside the lab.
“If wagering amounts decrease by eight percent across Australia, this could save punters hundreds of millions of dollars in wagering losses every year,” he says.
“Moreover, reducing the amount that people bet, even if small amounts, will likely help some punters avoid the more severe harms of wagering.”
Research team
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Professor, UTS Business School -
Professor of Cognitive Psychology, UNSW
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Professor of Economics, University of Tasmania
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Australia Government Behavioural Economics Team
