A comprehensive study of over 700,000 North American online gamblers highlights that 96% of respondents lose money. It also reveals that lower-income gamblers are more irresponsible with their gambling spending compared to higher-income gamblers.
Our Thoughts: While we know that gambling has risks and the house generally wins, we find it hard to believe that 96% of gamblers lose money, so we can only assume that this is partly due to irresponsible gambling as mentioned above.
Gambling Behaviour Insights
Researchers at UC-San Diego’s Rand School of Management conducted an in-depth analysis of gambling habits and the impact of legal online betting on both jurisdictions and individuals. The study indicates that states with legal online gambling enjoy increased revenue and can allocate more funds to problem gambling initiatives. Moreover, a regulated market helps to curb illegal wagering.
According to the study, online casinos lead to more irresponsible behaviour compared to online sports betting.
“On the downside, increased accessibility and participation can lead to higher rates of problematic gambling behaviour,” the authors noted.
Tracking Online Gambling Spending Habits
The study included data from a subset of 250,000 online gamblers in Canada, revealing that 43% spend above the recommended 1% of their salary on betting. Furthermore, 5.3% of participants spend more than 10% of their income on gambling, while 3.2% spend over 15%.
Conducted over five years from 2019 to 2023, the study identified potential gamblers by tracking consumer credit-card purchases. During this period, online sports betting (OSB) downloads surged from six million to 33 million. Researchers monitored consumers who transferred money in or out of gambling accounts, focusing on those whose first transaction was a deposit. The study tracked activity across 41 gambling sites.
While the tracking method allowed researchers to determine monthly or yearly spending, it lacked detailed data on whether deposits were used for daily fantasy, digital sports betting, or online gambling. Additionally, the frequency or “intensity” of betting was not tracked.
The study gathered minimal demographic information apart from income and spending habits. As expected, online gamblers in the study had higher incomes than the average American. The average US household income stands at $106,400, while online gamblers had an average income of $130,096.
Online Sports Betting Transaction Habits Revealed
Among the findings:
The average bettor made 21 transactions, 18 of which were deposits. (The report did not go into detail about how many of these were Bitcoin deposits.)
The average deposit total was $1,375.
The average withdrawal was $742.
The value of wagers placed between 2019 and 2023 grew 14-fold.
Taxable revenue during the study period grew 18-fold.
Impact on Problem Gambling and Mental Health
Researchers also examined data from the National Council for Problem Gambling (NCPG) helplines and the Centres for Disease Control (CDC) regarding suicide. As more states legalize online gambling, there has been a notable rise in calls to gambling hotlines. However, researchers did not observe a spike in suicide rates, noting, “None of the time series show unusual increases that visually correspond to Online Sports Betting policy date changes.”
Calls to gambling hotlines increased dramatically beginning in 2021. That year, five states, including Michigan, the 10th biggest US state by population, and Arizona, the largest legal betting state in the West launched digital sports betting. In 2022, five more states, including New York, came online.
This extensive study shows that there are financial risks associated with online gambling, particularly among lower-income gamblers. The findings highlight the need for continued efforts to promote responsible gambling and provide support for those at risk.
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