Mobile Betting: A Destructive Habit Waiting At Our Fingertips

The safest way to double your money is to fold it over once and put it in your pocket

In the spirit of #ISYS8621, the idea for this blog came from my Twitter newsfeed. This week the NFL announced its first-ever U.S. sportsbook partnerships as Caesars Entertainment, DraftKings and FanDuel became Official Sports Betting Partners of the league. First some context. The NFL announcement comes after the overturning of legislation in 2018 when the Supreme Court struck down a federal ban on sports betting, resulting in any state having the option to legalize it. Many have already done so, encouraged no doubt by the potential for state tax revenues that accompany this dangerous mobile habit.

The legalization of sports betting is becoming widespread

With more US states set to legalize mobile betting, I fear the consequences of widespread adoption. Sports betting has created a new form of entertainment that society has approved, but we must not ignore the dangers. Before welcoming loosened regulations, it is worth knowing that an estimated 10 million people in the US suffer from gambling addiction. Reports show that the number of younger people seeking treatment for addiction has doubled in the past two years. We can look to the UK for another warning sign, where gambling has long been legalized. In 2020, the National Health Service was forced to open its first clinic for child addicts in response to a report showing that 11% of 11 to 16-year-olds gamble every week.

Customer Targeting

It is no surprise that technology is accelerating problem-gambling. With over 80% of sports bets now being made online in the US, mobile technology gives users 24/7 access and placing a bet is now as easy as ordering an Uber. First the data, and I know what you’re thinking “please god no, not another data argument”, but to understand how technology is fueling the problem, it is important to know what user data is collected by gambling companies. The top companies in the industry use some of the internet’s most invasive tracking and profiling techniques. For each user, they know things like the time spent gambling, the types of games played, and more concerning, personal characteristics. They are then taking this information and turning it right back on customers, and the following example from the UK explains how.

In 2018, when a customer found the strength to stop gambling after suffering crippling financial losses, the betting company Sky Bet used their data-profiling software to label him as a customer to “win back”, even using a predictive model to estimate that luring him back would be worth $1,500 to the company.

Micro-Betting

Another way technology is enabling addiction is through micro-betting. Micro-betting works by taking a single basketball or football game, and breaking it into thousands of little games. It reduces the gap between placing a bet and its outcome to seconds and unfortunately, it has already been adopted in the US. In 2020 FanDuel partnered with product development company Simplebet. Simplebet uses machine learning and AI to generate fast-betting opportunities throughout a sporting contest, offering users the capability to wager on things like the next player to drain a 3-pointer in a basketball game.

As the graphic shows, Simplebet enables users to bet on over 2,000 outcomes during EVERY football game. Looking at this differently, that’s over 2,000 ways to lose your monthly pay check in 60 minutes of action. While the technology is currently used in its “free to bet game”, FanDuel is using this free version to convert casual fans into unsuspecting consumers who will be willing to bet real money as mobile betting becomes legalized.

And so it’s easy to see just how endless the opportunities, and the dangers are with mobile betting technology, not to mention how it could lead to problems with match fixing and player tampering, a problem already seen in tennis for example.

A Force for Good

But technology can also play an important role in ensuring that problem-gambling doesn’t spiral out of control, by utilizing the same techniques that are used to bait customers . As mobile betting becomes widely adopted, state regulators must set the tone for responsible gambling, because there is no other addictive service or product where a state government plays such big role.

And the responsibility doesn’t just lie with state authorities. Rather than using advanced algorithms in predatory ways, betting companies can instead use the same technology to detect illness patterns and use this information for good. Again, we can look to the UK to see how this would work. Kindred, an online gambling company, has partnered with the University of London and gambling analytics company BetBuddy to develop a PS-EDS (Player Safety Early Detection System).

PS-EDS uses the same data that gambling companies currently collect. It then analyses this data to detect harmful behavior, with the creators claiming it can predict a gambling problem in a user with 87% accuracy Taking this one step further, BetBuddy can deliver personalized responsible gambling messages (see side image) in real-time via email or in-game triggers to disrupt and alert users to harmful behavior.

Blocking Technology

Self-exclusion blocking software is another example of how technology can help. It is widely adopted across Europe, but a recent move by FanDuel gives hope that the tide is turning in the US. Last month, the company announced a partnership with Gamban, a technology firm specializing in gambling blocking software. Once installed, GamBan blocks access to all gambling sites, preventing users from betting anywhere online. However, the key here is the word “self”. Gambling companies implement the option, but the responsibility still lies with the individual.

The Road Ahead

And so, while these solutions are promising, companies and state governments should focus on long-term sustainability for responsible gambling by cutting off the dangers at source. This can be achieved through a reduction in the frequency and intensity of advertising and by treating gambling like alcohol. They can prevent addiction by restricting adoption, placing limits on betting amounts and numbers of transactions, especially with micro-betting. Because as 5G and edge computing become more widespread, the risks to problem-gamblers will only increase

Everyone’s perception of sports betting is different, but I am troubled by its adoption as a form of entertainment. I can’t help but draw parallels between the betting companies of today and Russel Crowe’s portrayal of Maximus in the movie, Gladiator.

Because just like that “sport” in the Colosseum, gambling is not a victimless source of entertainment. So, before we welcome the widespread legalization of mobile betting with open arms, it is worth remembering the words of the Irish playwright, George Bernard Shaw:

In gambling, the many must lose in order that the few may win

9 comments

  1. A lot of great information in this blog! I was pleasantly surprised to hear that there are companies that are actively working to prevent against gambling addiction. I think about gambling and sports generally the same way I think about most things, everything is fine in moderation. Things get out of hand when gambling turns into something that goes beyond having simple fun. Personally, I like to bet on sports about once every few months. The options to bet in Massachusetts are non existent because the government has not approved it. Having to drive to Rhode Island or New Hampshire has prevented me from betting any more than I do right now, which is something that I actually appreciate. Being able to to place a bet from my couch sounds too convenient and I could see how people could get sucked into it to the point of addiction.

  2. therealerindee · ·

    Great post and use of gif. While I agree with you that ultimately gambling is bad especially if it enters the realm of addiction, I also believe sports betting has done wonders for lots of different sports. Once you place money on any sort of outcome, you are automatically more attached to that game. I would love to see numbers on how the legalization of sports betting has increased viewership. Anyways, I also think if it weren’t for companies like FanDuel and DraftKings, the sports betting landscape would look very similar to the days of yore. Access would be difficult and the casinos would be the only major sportsbooks in the country. That being said, the access that comes with being an app on your mobile device means that there should be much greater regulation and oversight regarding the use of consumer data. Major sportsbooks may know your name, but DraftKings and FanDuel know pretty much everything about you and then some which, as you have said, is highly problematic.

  3. Jie Zhao · ·

    As someone who has not bet on sports and not familiar with this topic, I appreciated this blog and learned a lot from it! The most shocking data that stood out to me is that “11% of 11 to 16-year-olds gamble every week” – I had no idea that children that young even had the money to gamble let alone to a point that they’re addicted!? Clearly, this is a more serious problem that regulators should address. I think it is important to know how these mobile betting apps are making money – whether it is through charging a flat transaction fee, fee based on the amount bet, or from ads. Personally, I think it should be a balance of the three, with more limitations on a bet amount based fee. By implementing more limitations on how these mobile bet apps generate revenue will help prevent it from encouraging users to blindly gamble huge bets and mobile gambling to get out of control.

  4. abigailholler1 · ·

    I’m with Jie – I learned a ton from this post, as I am not too familiar with sports betting. Specifically, the anecdote you shared about the customer that finally was able to quit gambling, and then was subsequently targeted by online betting company to be ‘won back’ made me a little sick to my stomach. I think the anonymized nature of mobile betting could lead to a ton more addiction issues.
    For example, I’d imagine when betting with a bookkeeper, or socially at a casino, various interactions with humans might minimize losses, especially for someone who is addicted to gambling. The ability to gamble from a mobile device would make betting uber convenient, potentially leading to increased losses. Additionally, the anonymity of mobile betting takes the ownership off of the gambling company as well – if they can’t see (or don’t want to see) first hand the issues their application might be creating, then how could they remedy them?

  5. shaneriley88 · ·

    Well crafted post, Conor! I got so excited I left you comments on other people’s posts – blog roulette of sorts! It’s interesting to see how tech ( via apps) has led to a sort of sports betting 2.0. In many ways, I’d argue that DX regarding sports betting has made “locked” mobile betting in as the invisible addiction. You can lie to an app, you don’t need to know a bookie or a turf accountant, nor do you need to spend a Saturday “watching the dogs”. I think that many other issues or topics of concern that face state and federal governments will overshadow the lurking iceberg that is mobile betting. I enjoyed reading about the apps designed to manage access and Erin’s comments on how it has likely driven viewership and expanded fan bases for many sports. In the future, I wonder if/when/how regulators will take a more firm and digital stance on the subject

  6. williammooremba · ·

    Great post Conor. As you mentioned the situation in the UK a lot, I thought I would share a few of my experiences when I lived there. One of the cultural differences I was not anticipating when I was in London was how many small sports betting facilities there are in London. There were a couple of gambling chains which would have be located every couple of blocks. I didn’t end up using them, but even to have gambling be that accessible was very different from what I was used to. It was a far cry from having to be 21 plus and travel to a casino in the US. The other experience was a conversation I had with an English engineer when we were discussing cultural differences between the UK and the US. He had talked as you had described in the blog post the real harm that was coming from the rise of mobile gambling in the UK. He mentioned the accessibility of it being a real problem. I would tend to think that for the people who this will cause a problem for, the long-term impact could be problematic. I think to an extent this issue is already present in mobile gaming, and connected gambling could accelerate this. Definitely an important area to keep on an eye on.

  7. Nice post. I see why they are doing it, but I do think mobile gambling can just be a real slippery slope, particularly given the readings for this week. It’s like doubling up on addiction.

  8. Scott Siegler · ·

    Conor, this is a fantastic comprehensive post about the state of gambling in the digital world. I didn’t realize how prevalent gambling was among youth, and that data point alone pushes me to tend to agree with you that it is important for governments to regulate this industry to some extent. I’d also estimate that roughly 50% of shirt sponsors in the EPL are betting sites (the Liverpool training shirt I’m wearing right now has a Betvictor logo beneath the team crest.) I get offers all of the time where companies are essentially offering me $100 to gamble for free, and all I have to do to claim it is open an account and place an initial bet. If that willingness to give money away doesn’t demonstrate confidence in the addictive qualities of a service, I don’t know what does.

  9. Great post Conor. You brought up some phenomenal points specifically about the way companies are using the data and the way that it is affecting teenagers. I think we can all agree that it’s a problem when it is affecting people that young. I feel like a lot of government officials in the US don’t comprehend the level of data that is being used by all companies. As younger generations are introduced I believe this will have a natural shift to a deeper understanding that hopefully leads to better regulations.

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