Study: Lower-income gamblers take more risks online

Researchers at UC-San Diego’s Rand School of Management took a comprehensive look into gambling habits and how legal online betting affects jurisdictions and individuals. States with legal online gambling get increased revenue and more money to funnel to problem gambling initiatives, per the study. And a legal market helps to limit illegal wagering.

But for consumers, gambling is a money-losing proposition with potentially life-changing consequences. And online casino, researchers wrote, caused more “irresponsible” behaviour than online sports betting.

“On the downside, increased accessibility and participation can lead to higher rates of problematic gambling behavior,” the authors wrote.

Tracking online gambling spending habits

In particular, data from a subset of 250,000 online gamblers in Canada revealed that 43% spend above the recommended 1% of their salary on betting. Further, 5.3% spend more than 10% of their income on gambling and 3.2% spending more than 15%.

The study took place over five years, from 2019-23, and potential gamblers were identified by tracking consumer credit-card purchases. During that timeframe, online sports betting (OSB) downloads grew from six million to 33 million. Researchers looked at consumers who transferred money in or out of gambling accounts, and whose first transaction was a deposit. Researchers tracked 41 gambling sites.

While the tracking method allowed researchers to determine how much bettors spent in a month or year, data is not detailed. It was not possible to determine if deposits were used for daily fantasy, digital sports betting or online gambling. Further, researchers could not track the frequency or “intensity” of betting.

Researchers also did not gather significant demographic information other than income and spending habits. The online gamblers studied, “as one would expect,” earn more than the average American. According to the study, the mean US household income is $106,400 while online gamblers have a mean income of $130,096.

OSB transaction habits revealed

Among the findings:

• The average bettor made 21 transactions — 18 of which were deposits
• The average deposit total was $1,375
• The average withdrawal was $742
• DraftKings and FanDuel are by far the biggest operators in the US in terms of deposits. BetMGM, BetRivers, and TVG rounded out the Top 5.
• The value of wagers placed between 2019-23 grew 14-fold
• Taxable revenue during the study period grew 18-fold
• Researchers also examined the National Council for Problem Gambling (NCPG) helplines and Centers for Disease Control (CDC) suicide data. As more and more states legalise online gambling, it is not surprising, researchers wrote, to see a rise in calls to gambling hotlines. They did not see a spike in suicide rates, writing, “none of the time series show unusual increases in that visually correspond to OSB policy date changes.”
• Calls to hotlines appeared to rise dramatically beginning in 2021, according to the research. That year, five states, including Michigan, the 10th biggest US state by population, and Arizona, the biggest legal betting state in the West launched digital sports betting. In 2022, five more states came online, including New York.