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.
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.
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.
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.
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