A comprehensive study involving over 700,000 North American online gamblers, released on July 23, highlights that 96% of participants lose money, with lower-income gamblers displaying more “irresponsible” spending behaviors compared to their higher-income counterparts.
Gambling habits and economic impact
Conducted by researchers at UC-San Diego’s Rand School of Management, the study delves into the gambling habits of individuals and the effects of legal online betting on various jurisdictions. The findings suggest that states with legal online gambling benefit from increased revenue, which can be allocated to problem gambling initiatives, while also helping to curtail illegal betting activities.
However, the study also emphasizes the personal financial risks associated with gambling, noting that it is generally a money-losing activity with potentially severe consequences. The researchers found that online casinos tend to induce more “irresponsible” behavior than online sports betting.
“Increased accessibility and participation can lead to higher rates of problematic gambling behavior,” the authors noted.
Online gambling spending patterns
The study analyzed data from a subset of 250,000 Canadian online gamblers, revealing that 43% spend more than the recommended 1% of their salary on betting. Alarmingly, 5.3% spend over 10% of their income on gambling, and 3.2% spend more than 15%.
Conducted over a five-year period from 2019 to 2023, the study tracked potential gamblers through their credit card transactions. During this time, online sports betting (OSB) app downloads surged from six million to 33 million. Researchers monitored money transfers to and from gambling accounts, focusing on those whose initial transaction was a deposit, across 41 gambling sites.
While the tracking method provided insights into monthly and yearly spending, it did not distinguish between different types of gambling activities, such as daily fantasy, digital sports betting, or online gambling. Additionally, the study did not capture the frequency or intensity of betting.
Demographic data collected was limited to income and spending habits. As expected, the average online gambler had a higher income than the general American population, with a mean household income of $130,096 compared to the national average of $106,400.
Key findings on OSB transaction habits
The study uncovered several notable trends:
- The average bettor made 21 transactions, 18 of which were deposits.
- The average total deposited was $1,375, while the average withdrawal was $742.
- DraftKings and FanDuel emerged as the leading operators in terms of deposits, followed by BetMGM, BetRivers, and TVG.
- The total value of wagers placed from 2019 to 2023 increased 14-fold.
- Taxable revenue during the study period grew 18-fold.
Researchers also analyzed data from the National Council for Problem Gambling (NCPG) helplines and the Centers for Disease Control (CDC) suicide statistics. They observed an increase in calls to gambling hotlines correlating with the legalization of online gambling in more states, although no corresponding spike in suicide rates was detected.
Hotline calls saw a significant rise starting in 2021, a year when five states, including Michigan and Arizona, legalized digital sports betting. In 2022, five additional states, including New York, also legalized online gambling.
