DISEÑO DE DRIVERS PARA LOS ACTUARES

Wagering problems have been found to increase with greater frequency and volume of betting (Billi et al., 2014; LaBrie & Shaffer, 2011; LaPlante et al., 2014; Xuan & Shaffer, 2009), and wagering

inducements aim to encourage these responses amongst bettors. Thus, it is instructive to consider how wagering inducements may influence the commencement, continuation and intensification of betting, and the maintenance of problem gambling, in order to assess how they might influence the consumption and harmful consumption of wagering products. Given that no data were gathered from bettors for this study, the discussion that follows is based on reason, theory and previous research. Naturally, empirical research is needed to provide definitive findings, and the issues raised below should be viewed as considerations rather than conclusions.

5.3.1 Wagering inducements and the commencement of betting

Uptake of betting is specifically encouraged through sign up bonuses that reward the opening of a betting account with bonus bets. The audit found that the value of these bonus bets ranged from $14 to $1,000, with an average of $200. In the vast majority of cases, the customer needs to first deposit or bet the equivalent amount to be eligible for the bonus bet. The bonus bet itself and/or the initial stake and/or any winnings from the bonus bet must then be played through a stipulated number of times before any winnings can be withdrawn, usually at least once, but for an average of 4.9 times over all brands covered in the audit (1.1 times onshore vs 8.4 times offshore). Use of the bonus bet is also time limited, and typically must be used within 30 to 90 days, or forfeited (although one onshore operator had a seven day time limit). Thus, sign up bonuses incentivise opening an account and making a deposit or first bet, then making a bet with the bonus bet, and then making at least one further bet within one or a few months.

Refer a friend offers also aim to encourage commencement of betting by rewarding both the referrer and the new customer with bonus bets, although the audit found that these inducements are less commonly offered and less generous in value than sign up bonuses. As with the sign up bonus, bonus bets for the new recruit are subject to play through conditions, although the mean number of times was less than for sign up bonuses amongst the brands audited (2.6 times for refer a friend offers vs 4.9 times for sign up bonuses) and less for onshore brands (1.3 times) compared to offshore brands (4.5 times). No restrictions are applied to the use of bonus bets by the referrer, who can take up this inducement any number of times. No research has examined the influence of refer a friend offers, but they clearly capitalise on the power of word-of-mouth and the greater credibility given to friends’ recommendations over paid advertising messages. Being referred to betting by a friend may also help to normalise the activity and encourage product trial. Affiliate referrals, as explained in Chapter Two, are another mechanism by which referrals for new recruits are made by third parties, with the referral incentivised by receiving either an ongoing commission of the recruit’s betting losses or a fixed referral fee.

It is not known what proportion of customers recruited through sign up, refer a friend and affiliate offers are new to betting, are existing bettors who are new to online betting, or are existing online bettors opening additional accounts. Thus, the effects of these recruitment offers on brand switching versus increased consumption is not known. However, this is a critical issue, as brand switching alone does not necessarily increase an individual’s betting activity and may result in the individual receiving lower prices, better services or other benefits which they value. Similarly, existing bettors migrating from cash betting in retail outlets to account-based betting via the Internet may not necessarily alter the frequency or volume of their betting activity. However, where these inducements recruit new users, they necessarily increase those individuals’ consumption of wagering products. The total consumption

model, predicting that more consumption causes more harm at all levels, is supported in some previous research (Currie, Hodgins, Wang, el-Guebaly, Wynne & Chen 2006; Currie, Hodgins, Wang, el-Guebaly, Wynne & Miller, 2008; Rockloff, 2012). However, Binde (2014) argues that the

consumption model may be limited because consumption and problem gambling are not always linearly related, and different gambling activities and individuals carry different levels of risk. However, the recruitment of new bettors to the market clearly increases the number of individuals who are exposed to the risks of betting, and some of these may proceed to develop gambling problems and experience betting-related harm (Binde, 2014).

Previous research has found that sign up bonuses do encourage some bettors to open accounts (Hing, Cherney et al., 2014a, 2014b; Sproston et al., 2015; Thomas et al., 2012b). Further, sign up and refer a friend offers encourage bettors to open multiple accounts. For example, some interviewees in Hing, Cherney et al.’s studies of Internet gamblers (2014a, 2014b) described how wagering

promotions had prompted them to open accounts and bet with multiple gambling operators. This had three main reported effects. One was to extend the time spent gambling as these individuals used the multiple bonus bets received. Where these bonus bets required matching bets or deposits, this also increased these individuals’ gambling expenditure. A second effect was that some bettors found it more tempting to place further bets once they had an active account. A third outcome was that each account opened triggered a plethora of additional inducements conveyed through emails and other direct marketing channels encouraging additional betting. For some, the offers of free bets, matching deposits and ‘risk-free’ bets resulted in them gambling more than intended. (Hing, Cherney et al., 2014a, 2014b). Further, research with 3,178 Australian Internet gamblers found that multiple account holders are more involved gamblers, gambling on more activities and more frequently, and with higher rates of gambling problems than single account holders (Gainsbury, Russell, Blaszczynski & Hing, 2015b). Multiple account holders selected online gambling sites based on price, betting options, payout rates and game experience, whereas single account holders prioritised legality of sites and consumer protection features. Thus, although causal directions are unclear, having multiple active gambling accounts is a risk factor for problem gambling.

Overall, the main potential risks arising from wagering inducements aimed at commencement of betting are that they can 1) increase the overall number of bettors, 2) increase overall betting consumption and the risk of possible harm, 3) increase the use of multiple wagering accounts which can extend time and money spent through using bonus bets requiring matched amounts, and 4) expose bettors to a raft of additional marketing that encourages further betting.

5.3.2 Wagering inducements and the continuation of betting

Inducements do not necessarily increase an individual’s overall consumption of wagering products if they serve to simply attract customers away from competitors to a particular operator or retain customers in the face of competition. However, they do increase consumption if they result in additional betting to what individuals would otherwise have done.

Naturally, research undertaken for this study is insufficient to establish whether the inducements examined increase the frequency or volume of betting beyond what would have occurred in their absence. However, the few studies that have investigated wagering inducements (reviewed in Chapter Two) have found evidence that some inducements can result in additional betting. Hing, Cherney et al. (2014b) found that increased consumption was reported amongst both treatment-seeking gamblers and those recruited from the general population in response to offers such as ‘free’ bets and bonus deposits. Hing, Lamont, Vitartas and Fink (2015b) found that one-quarter of sports bettors surveyed agreed that the promotion of special bet offers increased their likelihood of betting on them, while

about one-quarter agreed that it increases the likelihood of them placing impulse bets. As noted earlier, Hing, Vitartas et al. (2014) concluded from their quasi-experimental research that a ‘risk-free’ offer is a strong enticement to sports bettors. Some participants in Sproston et al.’s study (2015) also reported that these ‘risk-free’ bets were highly influential in encouraging them to bet. While evidence is thin, research results to date all suggest some influence of wagering inducements on the continuation of gambling.

Logic also indicates that some types of inducements inherently encourage continued betting.

Specifically, inducements with incentives in the form of bonus bets and deposits that are received after

an incentivised bet (or received as a reward/comp or through redemption of loyalty points) require continued betting if the customer is to benefit from the incentive. These include most of the more common types of inducements identified in the audit. Mobile betting offers, multi bet offers, refund/stake back offers, some competitions, free bets to selected punters, and other free bets all exclusively or mainly provided the incentive in the form of bonus bets or deposits. Clearly, further betting is required to use these bonuses, with play through conditions ensuring that they cannot be immediately withdrawn from bettors’ accounts. In contrast, inducements which provide the incentive in cash or offer better odds/winnings (e.g. happy hours, match your stake offers, winnings paid on losing bets, bonus odds, bonus winnings, reduced commissions, cash rebates) do not necessitate continued betting to benefit from the offer. They may, however, enhance the appeal of these bets and thus encourage additional consumption; alternatively, they may provide other benefits to customers that serve to build brand loyalty. Thus, it is the type of incentive offered which appears to have more influence on continued betting, with bonus bets and deposits that require subsequent bets clearly having most influence.

5.3.3 Wagering inducements and the intensification of betting

Because wagering is a potentially addictive behaviour, promotions that increase the frequency and volume of betting can encourage transition to near-addictive or addictive use (Martin et al., 2013). Inducements that result in intensification of betting can therefore contribute to the development of new cases of at-risk and problem gambling. Some types of inducements stand out as having strongest potential for intensifying an individual’s betting activity, although empirical research is needed to verify their actual effect.

Inducements with stringent play through conditions necessarily intensify betting. For example, one inducement from an offshore operator required that a US$20 bonus bet be played through 16 times. This extreme example is provided to illustrate what can be required, with the average play through required being 5.8 times for offshore brands and 1.1 times for onshore brands in the audit (overall average was 2.7 times). Making redemption of an incentive conditional on placing numerous

subsequent bets clearly increases the volume of an individual’s betting activity. Many bonus bets also require a matching bet, thus intensifying betting expenditure. Further, play through conditions increase the amount of time spent gambling and therefore increase exposure to a potentially addictive activity. The Pathways Model would predict that the strengthened behavioural conditioning that occurs through this extended betting increases the likelihood of later developing gambling problems (Blaszczynski & Nower, 2002).

Increased volume of betting may also be encouraged by inducements for multi bets as these reward heavier product use by requiring bettors to wager on multiple legs. Further, multi bets and exotic bets have comparatively high expected loss rates (Gainsbury & Russell, 2015), which mean that they may increase betting-related harm and chasing behaviour as more bettors experience losses. While returns might be high when these bets are won, multi bets and exotic bets represent particularly risky types of

bets, yet these are the bet types that are most often accompanied by inducements. Responsible gambling information typically encourages people to understand the odds when gambling and to avoid risky betting behaviours; yet these inducements incentivise bets with probabilities that are extremely difficult to calculate and for which loss rates are high. Thus, some inducement types appear to discourage responsible gambling behaviour and incentivise risky gambling decisions. Of further concern are inducements that reward a large volume of bets. For example, one inducement offered $1,000 in free bets for punters who placed a bet on every race at a particular race meeting.

Happy hours are another inducement type that might intensify betting by encouraging the

concentration of betting into short time periods, often between 1-2 hours. Happy hours for alcohol consumption have been recognised as potentially promoting rapid and excessive consumption of alcohol, prompting regulations restricting their availability and related guidelines for responsible liquor advertising and promotions (e.g. Victorian Commission for Gambling and Liquor Regulation [VCGLR], 2015). This is because offers of free drinks and extreme discounting have been recognised as

resulting in an environment of irresponsible consumption by creating incentives for patrons to purchase and drink more than they normally would (VCGLR, 2015). It is not known whether discounted happy hours for betting have a similar effect, and this is an area for future research. A further consideration is that inducements to bet on wagering websites and betting apps occur at the point-of-sale and can therefore encourage impulse betting which increases consumption. As

discussed in Chapter Two, alcohol and tobacco research has found that point-of-sale promotions result in increased impulse purchasing and increased purchase quantities amongst some consumers (Gilpin et al., 1997; Jones et al., 2012; Slater et al., 2007). Further, inducements communicated directly to the consumer, such as through direct email or SMS, may be particularly salient as they are difficult to avoid (Martin et al., 2013). Thus, the manner in which wagering inducements are marketed may be an important influence on the effect that they have on betting behaviour, and this also requires research.

A final consideration here is the provision of credit to bet. As discussed in Chapter Two, provision of credit for gambling is prohibited on other forms due to its known risks for increasing gambling-related harm, as demonstrated in some legal cases discussed in Chapter Three. There appears to be little doubt that betting on credit has the potential to greatly intensify betting as some individuals become caught in a cycle of wagering losses, followed by betting on credit, leading to likely further losses and an inability to meet the debt.

Overall, the aspects of wagering inducements with most potential to intensify betting appear to be those with stringent play through conditions, multi bets that increase volume purchasing, bonuses for large volume betting, bets with high expected loss rates, those such as happy hours that can

concentrate betting into short time periods, the promotion of inducements at point-of-sale and through direct marketing that can encourage impulse betting and increase consumption, and the provision of credit for betting.

5.3.4 Wagering inducements and problem gambling

One reason that wagering inducements have been the subject of concern is their potential to maintain and exacerbate problem gambling. While research has been limited, studies of wagering marketing, as reviewed in Chapter Two, have consistently found that positive self-reported responses to this marketing increase with problem gambling severity, including more positive emotional and cognitive responses, greater approval of this marketing, and higher self-reported impact on betting behaviour (Hing, Lamont et al., 2015a, 2015b; Schottler Consulting, 2012; Sproston et al., 2015).

Studies of gambling inducements provided by land-based gambling venues, including loyalty programs, comps and promotions, have also found that they are associated with increased urges to gamble beyond self-set limits, more time and money spent gambling, increased gambling involvement, chasing losses, increased difficulties in controlling gambling, and gambling relapses (Narayanan & Manchanda, 2012; RGC, 2013; Schottler Consulting, 2010; Southwell et al. 2008). However, this body of research into gambling inducements has not investigated causal relationships, has relied on self- report data, and has not specifically investigated wagering inducements. Nevertheless, results to date are consistent with findings from gambling advertising research more generally that gambling

advertising impacts most on problem gamblers. Indeed, a comprehensive review of this literature (Binde, 2014) concluded that the only effect of gambling advertising for which there is direct research evidence is that it maintains or exacerbates existing gambling problems. This can occur by 1) arousing more frequent impulses to gamble, 2) hampering efforts to limit gambling, and 3) triggering relapse amongst former problem gamblers (Binde, 2014).

All three of these effects were reported in the only studies to date to provide insights into responses by problem gamblers to wagering inducements such as bonus bets and deposits. Hing, Cherney et al. (2014a, 2014b) interviewed 31 treatment-seeking Internet gamblers and 25 moderate risk/problem Internet gamblers from the general population, some of whom were sports and race bettors. As discussed in Chapter Two, amongst the treatment-seeking gamblers in particular, wagering inducements were reported to have increased some participants’ betting because the inducements made the activity more interesting and attractive, offered incentives to bet, provided triggers and reminders to bet, and encouraged bettors to chase their losses. These inducements also extended gambling time because of play through conditions and difficulties sometimes encountered in withdrawing winnings from betting accounts. Some interviewees attempting to curtail their betting reported relapsing in response to these promotions. Amongst the non-treatment-seeking moderate risk/problem gamblers, some recalled specific wagering promotions that had prompted them to gamble more than intended and to gamble when they otherwise would not have. While these small isolated studies do not provide conclusive evidence that wagering inducements impact negatively on problem gamblers, their results are consistent with prior research into gambling advertising, wagering marketing, and gambling inducements.

Overall, the weight of evidence, although scant, suggests that wagering inducements are more likely to maintain or exacerbate harmful betting amongst existing problem gamblers than to have no effects or benign effects on them. There is no obvious reason to suggest that wagering inducements are exempt from the heightened negative impacts on problem gamblers found in research into gambling advertising in general (Binde, 2014). Their heavy promotion at point-of-sale, in mass media, social media and in direct communications to bettors means that this advertising cannot be avoided, exposing problem gamblers to an ongoing plethora of betting cues as inducements are continually refreshed. Further, these cues are highly incentivised through offers of ‘free’ bets, deposits, money- back guarantees, and provision of credit for betting. Problem gamblers themselves have reported harmful effects, but further empirical research is needed with larger samples and to determine any differential effects for different types of wagering inducements.