When one thinks of gambling, the image of bustling casinos, lotteries, or betting on sports comes to mind. In recent years, it has become possible to wager on virtually anything — the next Pope, politics, or even the weather. The common thread? The relentless pursuit of the thrill. This expansion of the traditional notion of betting to include such novel concepts reflects the innate human desire for excitement and impulsive behaviours. With the ever-evolving nature and ubiquity of technology, it is no wonder that even betting has undergone dramatic changes. The Covid-19 lockdown further accelerated this trend, as physical and social restrictions encouraged people to try online gambling platforms.
From mechanical to electronic machines and now to betting on smartphones, the gambling experience has become much more accessible, allowing users to bet at any time and place — be it at home, in the workplace, or while commuting. It is no longer necessary to physically go to a dedicated place to gamble, also allowing users to maintain anonymity. Even in countries where gambling may not be socially acceptable or legal, the digitalisation of betting helps overcome the hesitancy that potential users may have regarding betting. With lowered transaction costs, people can bet easily, and at a higher frequency. In 2024, the regulated gambling market in Europe is expected to reach €137 billion in gross gaming revenue, of which online gambling accounts for about 40% (€55 billion) (Euronews, 2024). There is a steady increase in the popularity of online gambling, especially amongst the youth.
In Europe, more than half of online bets are placed on smartphones, with the most popular products being casino games and sports betting. According to a study conducted in Germany, on average, replacing 10% of offline gambling with its online counterpart increases the chances of the user becoming a problematic gambler by 8.8-12.6% (Effertz, 2019).
Gambling advertisements surround us — especially in sports, where betting and watching the game seem to have become complementary activities. Lax regulation by governments creates a favourable environment for changing attitudes towards betting. Promotion by popular and mainstream celebrities has aided in decreasing the stigma around betting, and even glamorising it, to some extent. Research suggests that more exposure to such advertisements is successful in promoting gambling related behaviour (Bouguettaya, 2020).
There are many biases and underlying processes which exist even in rational and ‘non-problem’ gamblers, which are exploited by betting platforms. Complex bets that may hinder users from making a rational choice. The infamous sunk cost fallacy encourages users to keep betting after having invested considerable amounts of money, effort and time to recoup their losses, owing to the idea that every play must be dependent on past performance. Kahneman and Tversky’s Prospect Theory (1979) suggests that people are more likely to exhibit risk-taking behaviour when faced with potential losses, in contrast to potential gains, meaning that players who have already lost a considerable amount of money would rather keep attempting to win their funds back. Hyperbolic or delay discounting states that gamblers are more likely to chase the instant gratification of a win over the long term benefit of financial or emotional well-being.
Popular gambling sites exploit subtle design choices to nudge users’ behaviour in a certain direction. Improved user interfaces and deliberate choice architecture have personalised the gambling experience, allowing users to track their statistics, favourite teams, or make quick bets. This is also visible in instances where the user is congratulated for ‘near-misses’, given intermittent rewards, celebrating wins even when the payout is less than the bet, or enticed with introductory offers that provide free bets. Some games might lead users to believe that they have more control over the odds than they actually do, especially for games based on chance. For sports betting, in-game gambles encourage users to bet in real time, with the odds updating as the game progresses. With the advent of parlays, it is possible to link multiple bets together to create a bigger payout, which helps lure and retain players. Sites make it easy to deposit money, whereas the options to withdraw funds are usually made harder to access.
The gamification of betting removes the perceived effort to gamble, making it more enticing, seamless, and addicting. Another heuristic that affects users is ‘mental accounting’, wherein the value of funds from different origins and purposes of use are perceived differently (Gainsbury, 2018). This suggests that people are likely to view money won from a game and money earned through a job in different lights.
Gambling sites benefit from the perceived reduction of the ‘salience of money’, making it easier to place bets using chips, credits or online transactions (Gainsbury, 2018). ‘Paper losses’ and ‘realised losses’ can also impact the way users make their choices — when a loss occurs as a physical/imagined transaction, the loss-chasing behaviour is inhibited, meaning that users become more risk-averse. In contrast, seeing a loss as a mere reduction in bank balance on a screen results in increased bets (Imas, 2016). Depositing money into betting accounts cultivates a sense of detachment from money for gamblers, reinforcing the idea that those funds are ‘bracketed’ for that specific purpose. Windfall gains appear to have less psychological value, and such gains are considered to be more expendable (Arkes, 1994).
While this approach allows us to understand the processes that fuel gambling behaviour, we also need to consider the social and economic implications of the prevalence of gambling. Even though problem gamblers represent only a small percentage of the population, recent innovations in the betting landscape still highlight concerns surrounding its increasing prevalence and requirements for effective regulations. Another caveat is the introduction of certain aspects of betting to minors, who are more susceptible to adopting gambling behaviours, via pay-to-win video games. The significant negative social, mental health and economic costs the betting industry presents makes it a field to be tread carefully. The same behavioural approaches can be utilised to create an environment which does not exploit its players, and even for the recreational player, being aware of one’s own biases can be helpful in making a more informed decision. Strategies such as setting money limits, using self exclusion tools and taking regular breaks can help you overcome any biases at play. The implementation of informed policy changes can protect the interest of gamblers, and ensure that the house does not always win.
References:
Pereira, I. (2025). How is Europe reacting to the growth of the online gambling market? Euronews, 3 February. [online]. Available at: https://www.euronews.com/ [Accessed: 8 May 2025]
Effertz, T., Bischof, A., Rumpf, H.J. et al. (2018). The effect of online gambling on gambling problems and resulting economic health costs in Germany. European Journal of Health Economics, 19, pp.967–978.
Bouguettaya, A., Lynott, D., Carter, A., Zerhouni, O., Meyer, S. et al. (2020). The relationship between gambling advertising and gambling attitudes, intentions and behaviours: a critical and meta-analytic review. Current Opinion in Behavioral Sciences, 31, pp.89–101.
Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), 263–291.
Gainsbury, S.M., Tobias-Webb, J. and Slonim, R. (2018). Behavioural economics and gambling: A new paradigm for approaching harm-minimisation. Gaming Law Review. https://doi.org/10.1089/glr2.2018.22106
Imas, A. (2016). The realization effect: Risk-taking after realized versus paper losses. American Economic Review, 106(8), pp.2086–2109.
Arkes, H.R., Joyner, C.A., Pezzo, M.V., Nash, J.G., Siegel-Jacobs, K. and Stone, E. (1994). The psychology of windfall gains. Organizational Behavior and Human Decision Processes, 59(3), pp.331–347.
B.BIAS 