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BEHAVIORAL ECONOMICS AND GAMBLING: A NEW PARADIGM FOR

APPROACHING HARM-MINIMIZATION

Article · December 2018

DOI: 10.1089/glr2.2018.22106

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Behavioural economics and gambling: A new paradigm for approaching harm-
minimisation

Please cite as: Gainsbury, S.M., Tobias-Webb, J., & Slonim, R. (2018). Behavioural economics
and gambling: A new paradigm for approaching harm-minimisation. Gaming Law Review.
https://doi.org/10.1089/glr2.2018.22106

Keywords: gambling, harm minimisation, prevention, policy, behavioural economics, addiction

Sally M. Gainsburyᵃ, Juliette Tobias-Webbᵇ, Robert Slonimᶜ

ᵃ University of Sydney, Science Faculty, Brain and Mind Centre, School of Psychology, 94
Mallet St, Camperdown NSW 2050 Australia; sally.gainsbury@sydney.edu.au; tel: +612 8627
5642; ORCID 0000-0002-9641-5838
ᵇ Commonwealth Bank Australia. Behavioural Economics Team; Commonwealth Bank Place,
North Building, 1 Harbour St, Sydney NSW 2000; Tel: +61459865824. Juliette.tobias-
webb@cba.com.au, ORCID: 0000-0002-8491-9668
ᶜ University of Sydney, Arts & Social Science, School of Economics, H04 Merewether Building,
University of Sydney NSW 2006; tel: +61 2 9036 9187; Robert.slonim@sydney.edu.au

Corresponding author:
Sally M. Gainsbury, sally.gainsbury@sydney.edu.au Gambling Treatment and Research Clinic
94 Mallet St, Camperdown NSW 2050, Australia, Tel: +612 8627 5642
Gainsbury - Behavioural economics and gambling

Abstract

The premise of this article is that an understanding of behavioural economics can inform and

improve the effectiveness of gambling policies and practices. Existing interventions to minimise

gambling-related harms appear to be ineffective. Many conceptual models of gambling consider

the role of cognitive distortions in potentiating harmful gambling outcomes, however, policies

and practices often fail to recognise the heuristics (and resulting biases) that drive ongoing

gambling. A behavioural economics approach to gambling public policies and interventions

acknowledges humans do not always act in their best interest and introduces a range of policy

tools that better motivate behaviour change. This paper reviews insights from psychology and

behavioural economics to develop recommendations for gambling harm-minimisation policies.

Behavioural science tools such as commitment devices, personalised messaging, and more

generalised ‘nudges’ can be effective across the entire spectrum of gambling-related harms. The

interventions recommended involve low-cost, subtle tweaks to the decision-making environment

that promote agency, encourage positive behavioural change, and improve measurable outcomes.

A multidisciplinary, evidence-based approach to developing gambling policies is recommended

to enhance gamblers’ well-being.

Keywords: gambling; harm-minimisation, behavioural economics; policy; evaluation; problem

gambling; biases
Gainsbury - Behavioural economics and gambling

Behavioural Economics and Gambling:

A New Paradigm for Approaching Harm-Minimisation

Gambling is a historically and culturally prevalent pastime that is broadly accepted in

many cultures and societies in its various forms. Evidence suggests that most people who engage

in gambling activities do so at low levels and experience no negative consequences of their

behaviour (Castrén, Kontto, Alho, & Salonen, 2018; P. Delfabbro & King, 2012). However, it is

increasingly recognised by communities, industry groups, gambling regulators, and politicians

that there are serious harms associated with gambling for at least a subset of individuals, and all

of these groups have a responsibility to undertake efforts to address these issues (Ladouceur,

Blaszczynski, Shaffer, & Fong, 2016). Yet, despite decades of efforts to develop and implement

harm-minimisation gambling interventions, few have been effective (Ladouceur, Shaffer,

Blaszczynski, & Shaffer, 2017; Livingstone, Rintoul, & Francis, 2014). Gambling-related

problems at various levels are relatively widespread in the population, including those

experiences related to another person’s gambling. For example, Australian research indicates that

up to six people are affected by every problem gambler, and gambling problems are a social

issue on a similar order of magnitude to major depressive disorder and alcohol misuse and

dependence (Browne et al., 2016; Goodwin, Browne, Rockloff, & Rose, 2017). Even those who

experience less serious impairments stand to benefit from initiatives to minimise gambling-

related harms, as would the many people affected by another person’s gambling (Goodwin et al.,

2017; Langham et al., 2016; Li, Browne, Rawat, Langham, & Rockloff, 2017). Consideration of

a new approach to reframe our thinking and look more broadly across academic disciplines to

address gambling harms would be beneficial for policy makers, researchers, stakeholders, and

gamblers themselves. The current paper proposes that the field of behavioural economics offers a
Gainsbury - Behavioural economics and gambling

valuable perspective for the gambling and broader addiction fields. This paper focuses on

understanding the heuristics and biases that drive behaviour with an aim of guiding the

development of effective interventions to minimise gambling-related harms. We conclude that

greater cooperation between stakeholders to conduct real-world trials of policies that preserve

autonomy, but are persuasive and make it easier for individuals to enact behaviours that would

minimise gambling-related harms would make a significant impact on the serious public health

issue of problem gambling.

Brief introduction to gambling

Gambling is an instance of risky decision-making whereby money is staked on the

uncertain prospect of a larger outcome. Given this strong element of risk, gambling has long

been a topic of interest for economists. ‘Gambling’ tasks have often been used to simulate risk-

taking scenarios to study human behaviour and decision-making in psychology and economics

(Buelow & Suhr, 2009). The harm associated with gambling behaviour is thought to lie along a

spectrum of risk, with such risks including increased investment of time and money spent

gambling, a preoccupation with gambling and gambling losses, and continued gambling despite

negative personal, financial, and familial outcomes (Hodgins, Stea, & Grant, 2011; Langham et

al., 2016).

Problem gambling is an important public health issue. The costs to society have been

estimated to be as much as AUD $7 billion in the Australian state of Victoria alone, and the U.K.

government is estimated to spend £1.2 billion per annum on gambling-related social costs

(Browne et al., 2017; GambleAware, 2016), including substantial costs related to low and

moderate levels of gambling problems. From a purely economic perspective, these figures
Gainsbury - Behavioural economics and gambling

suggest that investment in efforts to develop and evaluate effective prevention and treatment

strategies would be highly beneficial for individuals, families, and society.

Behavioural economics and conceptual models of gambling

Traditional economic theory postulates that human decision-making and behaviour are

based on purely rational choice, whereby humans act to maximise benefits and minimise costs

(Becker, 1962; Simon, 1955). Neoclassical economics assumes that people have rational

preferences among outcomes, strive to maximise utility, and act independently based on full and

relevant information (Henry, 2012; Weintraub, 1999). Recent empirical research has increasingly

demonstrated that behaviour systematically deviates from what traditional models predict, with

individuals frequently acting against their own long-term-interest, reflecting the tension between

immediate and delayed gratification (Dassen, Houben, & Jansen, 2015). Given the widespread

recognition that ‘the house always wins’, gambling is a key example of this deviation.

Behavioural economics increases the explanatory power of economics by incorporating

concepts from psychology that influence decision-making (Tversky & Kahneman, 1973, 1974).

For instance, behavioural economics suggests that individuals cope with uncertainty and

complexity in their lives by using a small number of general purpose heuristics (shortcuts to

decision-making that bypass formal cost-benefit analysis) for simplifying judgments and making

decisions. These tools work reliably and save time and effort but can also lead to predictable

errors called ‘biases’.

Many biases are exhibited in gambling, even by low-risk social gamblers (Blaszczynski

& Nower, 2002; Delfabbro & Winefeld, 2000; Miller & Currie, 2008), and many of the

heuristics discussed in behavioural economics parallel gambling cognitions. The ‘sunk cost’
Gainsbury - Behavioural economics and gambling

effect is a type of loss aversion in economics that explains how people will persist with an

activity in which they have already invested time, money, and effort, in order to recover their

losses (Arkes & Blumer, 1985; Garland & Newport, 1991; R. Thaler, 1980). This fixation on

recovering losses is similar to the concept referred to in psychology as ‘loss chasing’, commonly

seen amongst gamblers and exaggerated in problem gamblers (Blaszczynski & Nower, 2002; S.

Gainsbury, Suhonen, & Saastamoinen, 2014; Toneatto, 1999). ‘Mental accounting’ refers to

people perceiving money differently depending on factors such as the origin, form, or intended

use of the money (Prelec & Loewenstein, 1998). Gambling operators benefit from this heuristic

by reducing the salience of money (or the ‘pain of paying’) through credits, casino chips, and

online funds transfers (Shah, Bettman, & Payne, 2014). For example, online gamblers who

experience gambling problems commonly report that using electronic funds to transact increases

their gambling expenditure more than cash transactions (Gainsbury, Russell, Wood, Hing, &

Blaszczynski, 2015; Hing et al., 2015). Once money is within an online gambling account, this

may lead customers to ‘bracket’ their funds for gambling specifically, rather than using their

funds for other activities (Imas, 2016; Zelizer, 1997).

Even the most common psychological biases reported in gambling stem from well-

referenced heuristics. The ‘gambler’s fallacy’ and ‘hot hand’ effect rely on the

‘representativeness heuristic’ which assumes short sequences of events should represent the

larger distribution of the outcome(s) (Ayton & Fischer, 2004). In the case of the gambler’s

fallacy, after a sequence of the same outcome (e.g., three reds), a negative autocorrelation is

predicted (e.g., black), whereas for the hot hand effect, after a sequence of wins or losses, a

positive autocorrelation is predicted (Ayton & Fischer, 2004; Sundali & Croson, 2006; Tversky

& Kahneman, 1971). Whilst the direction of the autocorrelation predicted are different in these
Gainsbury - Behavioural economics and gambling

two phenomena, in both cases, the flawed assumption stems from viewing a series of

independent (chance) events as dependently related, so that the outcome of one event affects the

outcome of the next (Gilovich, Vallone, & Tversky, 1985). Other examples of this effect in

gambling are loss chasing, where players on a long losing streak believe that a win is owed or

due, and in lottery players, where players avoid choosing runs (1, 2, 3, 4) or patterns (Studer,

Limbrick-Oldfield, & Clark, 2015). The ‘illusion of control’ heuristic is also prevalent in

gambling, whereby players show an enhanced belief in their own skill (even in a chance-based

game), related to the ‘overconfidence’ effect and ‘optimism’ bias in behavioural economics

(Langer, 1975; Moore & Healy, 2008; Sharot, 2011). These (and other) gambling biases have

been linked to increased gambling expenditure and time spent gambling, despite the occurrence

of losses (Harrigan, MacLaren, Brown, Dixon, & Livingstone, 2014; Jensen et al., 2013). Yet,

gambling venues and games exploit these heuristics. For instance, stopper buttons on slot

machines encourage illusory control beliefs (Chu, Limbrick-Oldfield, Murch, & Clark, 2017).

Roulette games display a history of red/black outcomes, which fosters the gambler’s fallacy

(Barron & Leider, 2010; Croson & Sundali, 2005), and slot machines provide losses disguised as

wins whereby the player is congratulated for a win, with the value being less than that of the bet

(Dixon, Harrigan, Sandhu, Collins, & Fugelsang, 2010). This is particularly concerning

considering that gambling biases are elevated in clinical Gambling Disorder and have been found

to activate areas in the brain associated with an actual win (Clark, Lawrence, Astley-Jones, &

Gray, 2009; Michalczuk, Bowden-Jones, Verdejo-Garcia, & Clark, 2011; Miller & Currie,

2008).

From a policy and treatment standpoint, it is important to recognise that gambling-related

cognitions are not static. Individuals may have intentions to limit their spending during sessions,
Gainsbury - Behavioural economics and gambling

but subsequently change their minds, or fail to adhere to their pre-set limits (Hare, 2006; Lalande

& Ladouceur, 2011; Nower & Blaszczynski, 2010). Gamblers also often acknowledge their

faulty beliefs outside of the game (Ladouceur, Sévigny, Blaszczynski, O’Connor, & Lavoie,

2003). During the action of the game, gamblers appear to ‘switch’ to a more biased state. This

switching is compatible with the ‘dual systems’ models of decision-making that describe the

balance between an emotional, impulsive system, and a calculative, reflective system

(Kahneman, 2011). An obstacle for problem gambling prevention programs, such as education

on the statistics of gambling, is that training the reflective system may fail to stop gamblers

switching into the more emotional mode (Williams & Connolly, 2006).

The heuristics described here are a partial list. They help to explain the lack of success of

information-based interventions designed to change gambling behaviour by simply informing

people about the risks of gambling and the low chances of winning jackpots (Monaghan &

Blaszczynski, 2009). The strength of biased cognitions and their impact on gambling behaviour

is also exemplified in the effectiveness of cognitive treatment programs focusing on correcting

erroneous perceptions of randomness (Ladouceur et al., 2001), and in one of the most widely

provided programs to minimise gambling-harms, self-exclusion. Self-exclusion is a voluntary

agreement that an individual enters into with a gambling operator, acknowledging that they are

not able to control their gambling behaviours and will likely act against their own self-interest,

particularly during play (Gainsbury, 2014). Gambling policy should also recognise the

importance of heuristics and biases in gambling behaviour and assist in overcoming them.

Addressing biases within gambling may occur at an individual or population level depending on

the strategies used.

Barriers to effective gambling harm-minimisation policies

Gainsbury - Behavioural economics and gambling

There are several barriers to policies that aim to minimise gambling-related harms. First,

despite high social costs, gambling generates significant funds for the gambling industry and

governments either directly through ownership or indirectly through taxation (Korn, 2000;

Productivity Commission, 2010; Walker & Jackson, 2011). This creates a conflict of interest for

government and industry bodies, as strategies that lead to a reduction in gambling have an impact

on revenue, particularly when most gamblers gamble without harm (Korn, 2000; Ladouceur et

al., 2016). The widely known Reno model, a science-based responsible gambling framework,

recognises that effective harm reduction policies should not unnecessarily disrupt non-

problematic gamblers (Blaszczynski, Ladouceur, & Shaffer, 2004). Evidence also suggests that

many gamblers are supportive of efforts to address gambling harms, and are willing to accept

mild disruptions to their own gambling if the strategy is perceived to benefit others (Gainsbury,

Aro, Ball, Tobar, & Russell, 2015a; Gainsbury, Jakob, & Aro, 2018).

Second, strategies that rely on voluntary use by individuals, such as self-imposed

restrictions on gambling expenditure and monitoring of play, are poorly utilised by gamblers

(Ladouceur, Blaszczynski, & Lalande, 2012; Livingstone et al., 2014). These interventions have

often been implemented following community consultation and/or surveys suggesting support

for government-led gambling harm-reduction strategies, rather than based on empirical evidence

for their likely impact (Gainsbury et al., 2018; Ladouceur et al., 2012). These voluntary

strategies fail to bridge the ‘intention-action gap’, whereby people frequently fail to act on their

intentions (Sniehotta, Scholz, & Schwarzer, 2005). For instance, many gamblers report setting

time or expenditure limits, but fail to adhere to these limits during play (Lalande & Ladouceur,

2011). This lack of action can result from more immediately gratifying outcomes (i.e., the

potential to win), from individuals perceiving the resource not to be relevant for them, or from a
Gainsbury - Behavioural economics and gambling

failure in the design environment such that the intervention does not sufficiently meet a

gambler’s needs, or is too difficult to use (Gainsbury, Hing, & Suhonen, 2014; Gainsbury et al.,

2018; Ladouceur et al., 2017; Nisbet, Jackson, & Christensen, 2016; Rowe et al., 2017). Harm

reduction strategies must be better tailored towards overcoming a gambler’s action-intention gap.

A third barrier to the success of gambling harm reduction policies is a failure to identify

and target a specific behaviour. There is no robust or inclusive definition of gambling harm, as it

is difficult to determine the size of bet, frequency of gambling, or level of negative personal,

financial, or familial consequences that classifies problematic gambling behaviour (Shannon,

Anjoul, & Blaszczynski, 2017). This is further complicated by the diverse selection of gambling

games offered, ranging from purely chance-based games (e.g., slot machines) to games that

involve skill and chance (e.g., blackjack), and by different definitions of ‘risky’ gambling

behaviour used in experiments (e.g., bet size, doubling up, etc.). Further problems with the

specificity of gambling policies include: 1) the lack of clearly defined harms related to gambling;

2) the use of non-specific terms, such as ‘responsible gambling’; and 3) an absence of relevant

metrics broadly collected, such as the involvement of gambling in divorce and custody hearings,

crime, incidents of domestic violence, and presentation for non-specialist gambling treatment

mental health and medical services (Hing, Sproston, Tran, & Russell, 2017; Ladouceur et al.,

2016; Rowe et al., 2017; Shannon et al., 2017). These problems present difficulties in measuring

the success of programs and need to be addressed in order to create specific and measurable

program and policy outcomes.

As discussed in the following sections, a behavioural economics approach offers

promising solutions to address these three overarching harm-minimisation barriers. However,

the authors note that gambling-related harms occur in a broad social-political context and
Gainsbury - Behavioural economics and gambling

behavioural economic-based strategies do not address the entire range of factors requiring

consideration. Further, behavioural economic approaches may be less suitable for those

experiencing severe gambling-related harms given that “nudge” approaches tend to be most

effective when they assist people to behave in ways that they are ultimately inclined to agree are

important.

Behavioural economic approaches to public policy

A behavioural economics approach to public policy acknowledges that humans do not

always act in their best interest and focuses on developing solutions that put real human

behaviour at the centre of policy and program design (Thaler & Sunstein, 2008). These policies

often use a ‘libertarian paternalism’ approach, whereby the intervention is designed using

behavioural insights to bring large benefits to those exhibiting poor behaviours, while imposing

little or no cost to those acting responsibly (Thaler & Sunstein, 2008). These policies shift

customers toward a normative or desired behaviour whilst preserving a customer’s ability to

choose between the available options. Many successful interventions have used carefully

designed and tested ‘nudges’, which involve making subtle alterations in the choice environment

to encourage behaviour change (Oliver, 2013; Thaler & Sunstein, 2003, 2008). One example is

the inclusion on letters of notice from the UK taxation office that ‘most citizens pay their taxes

on time’. This did not inconvenience those who pay their taxes, but resulted in an increase in

taxes collected within the specified timeframe (Hallsworth, List, Metcalfe, & Vlaev, 2017).

These types of nudging interventions are often based on inexpensive, small environmental

tweaks that promote agency, quantify behavioural outcomes, and shift large populations in

predictable directions when designed well. Nudges may focus on changing behaviour at an

individual level, and although they are not intended to address some of the broader issues, they
Gainsbury - Behavioural economics and gambling

may be politically easier to implement than larger changes to the provision or availability of

gambling.

There are many benefits to incorporating behavioural economics into policy development

for public health issues (Chetty, 2015). First, the multidisciplinary perspective of behavioural

economics allows a broad conceptual base from which policy tools can be developed to influence

behaviour. Second, behavioural economics offers more accurate predictions about the effects of

policies through the integration of evaluation and testing into policy development. Third, by

accounting for people’s decision-making processes and biases, behavioural economics can

enhance the expected outcomes of policies. Behavioural economics is already being incorporated

into policy-making internationally. However, despite some efforts to facilitate cross-disciplinary

collaboration, academic gambling research is largely conducted in disciplinary silos. This limits

the potential gains that can be made through multi-disciplinary collaboration. For stakeholders,

the disparate field makes it easy to collate and integrate relevant academic research that could

inform policy.

Applying behavioural economic principles to gambling

While conceptual models of gambling consider the role of cognitive distortions (or

biases), policies and practices often fail to recognise the heuristics and resulting biases that drive

ongoing gambling. Gambling policies have predominately been ‘think’ policies, based on

deliberative decision-making whereby people are provided with information and subsequently

expected to behave rationally based on this (Blaszczynski et al., 2004; Kahneman, 2011;

Stanovich & West, 2000). Many of the heuristics and biases considered in behavioural

economics have potential application to minimise harm during play (e.g., by reducing cognitive

distortions and bet size), as well as in prevention and treatment efforts (e.g., through messaging
Gainsbury - Behavioural economics and gambling

and commitment devices). The solutions discussed are not intended to be exhaustive, nor are

they exclusive to one type of harm.

The behavioural economics heuristic of normative social influence emphasises that

people tend to make social comparisons and modify their behaviour based on what they perceive

others to be doing (Cialdini, 2003; Cialdini & Trost, 1998; Feldman, 1984; Hackman, 1992).

Providing individuals with tailored normative feedback on how their gambling behaviour and

expenditure compares with others has been successfully incorporated into gambling treatment

programs (Edgerton, Biegun, & Roberts, 2016; Gainsbury & Blaszczynski, 2011). Such

strategies are thought to enhance self-awareness of behaviour and increase motivations to modify

behaviour as necessary. Normative messages are an example of a cost-effective, subtle Commented [DW1]: Is this word intended?

behavioural intervention that could reduce gambling for a proportion of gamblers at-risk of

developing problems, whilst minimally disturbing recreational gamblers. For example,

individuals could receive activity statements with a clear summary of their monthly net gambling

outcome that include a statement or graphic comparing their gambling outcomes with the

average bettor. This is similar to techniques used to reduce electricity and water consumption

(Schultz, 2014). However, one should be mindful of, and measure, unintended consequences. For

instance, informing people that they are below the average level of consumption can increase

poor behaviour, termed the ‘boomerang’ effect (Cialdini & Trost, 1998; Schultz, Nolan, Cialdini,

Goldstein, & Griskevicius, 2007). Moreover, providing feedback on gambling may encourage

loss chasing for problem gamblers, if the feedback reminds them of their losses, which they wish

to recoup through further gambling in the anticipation of wins (Ladouceur et al., 2012; Mizerski

et al., 2012). To achieve optimal behaviour modification, policy initiatives should combine
Gainsbury - Behavioural economics and gambling

normative messages with other nudges, such as non-financial penalties or incentives like smiley

faces and words of encouragement, recognising desirable behaviour (Schultz et al., 2007).

Another cost-effective behavioural economics approach is personalisation, which is

highly relevant for gambling interventions. An increasing proportion of all gambling is now

based on individual player accounts, which allow players to accrue loyalty points, keep track of

their gambling expenditure, wins and losses, and receive updates from gambling operators and

regulators. These player accounts have the potential to enable sophisticated harm-minimisation

strategies, including personalised messages that target players based on individual characteristics

and patterns of play (Gainsbury, 2011). Such tailored feedback outperforms traditional warning

or informative messages as it is more likely to be read, remembered, and viewed as personally

relevant (Larimer et al., 2012). Tailored feedback is common practice in marketing and health

communication due to its apparent effectiveness in changing behaviour long term (Jung, Ginis,

Phillips, & Lordon, 2011; Kreuter & Wray, 2003; Nollen et al., 2007; Postma & Brokke, 2002;

Strickland et al., 2015; Xu, Liao, & Li, 2008). Furthermore, unlike alcohol, there are no standard

guidelines for ‘safe’ levels of gambling that could be recommended as a public education tool for

the whole population (Currie et al., 2006, 2017). Player information can be used to assist players

to work out their own affordable gambling limits, as compared to regulatory guidelines. This has

been termed ‘asymmetric paternalism’ (Camerer, Issacharoff, Loewenstein, O’Donoghue, &

Rabin, 2003), with the term asymmetric referring to the intention of the intervention to help

those who need to change their behaviour, without disturbing those who are making informed

and deliberate decisions.

During play, there are many features of a game that encourage ‘flow’ or continued

gambling with attenuated thought (also termed dissociation), thereby minimising switching
Gainsbury - Behavioural economics and gambling

behaviour (Diskin & Hodgins, 1999). One basic feature includes the ‘bet again’ button, which

saves a player’s previous bet size and pay-line(s) choice, and is common on electronic gaming

machines, casino table games, and various online gambling options. The transfer of cash into

credit or chips also facilitates flow, by way of it being easier to keep gambling than return to the

cashier to exchange chips or credits for money. Creating friction may prompt gamblers to switch

from an impulsive to a reflective state, and consider whether they want to continue gambling,

take breaks, or stop altogether. Dynamic messages that break any dissociation and attract

attention have been more effective when they ask gamblers “Do you need to take a break?”, as

opposed to providing factual information about the low chances of winning with no suggested

behavioural action (Gainsbury, Aro, Ball, Tobar, & Russell, 2015b). One of the most effective

policy changes in terms of reducing gambling expenditure was the introduction of smoking bans

that caused gamblers to take a break and leave the gambling venue to smoke, resulting in a

reduction in gambling among smokers (Bradley & Becker, 2011; Garrett & Pakko, 2010; Pakko,

2008). Breaking a repeated and default pattern of responding can therefore reduce mindless and

unintended continued gambling, and potentially excessive expenditure.

Pre-set courses of actions termed ‘defaults’ are also a powerful determinant of behaviour

and are recognised in behavioural economic initiatives ranging from enhancing savings for

retirement to increasing rates of organ donation (Abadie & Gay, 2006; Brown, Liebman, &

Wise, 2009; Johnson & Goldstein, 2003). Default settings require people to make an active

choice to opt out of, as opposed to opt into, a desired behaviour (Johnson & Goldstein, 2003). As

a default option, credit card companies could block expenditure at gambling venues and sites,

and require consumers to opt out of the block by notifying their financial institution if they wish

to enable gambling expenditure at certain venues or sites. Gambling operators can set
Gainsbury - Behavioural economics and gambling

conservative deposit or money transfer limits, lower the default bet size option of a game, or

send players’ winnings to a separate ‘cash out’ account, with players having to select to re-

gamble their money. The potential power of defaults in gambling was shown in an online sports

betting study where less than 1% of 47,000 gamblers exceeded the deposit limits imposed (Broda

et al., 2008). Thus, gambling policy makers, operators, and clinicians need to be aware of setting

well-designed default options to enhance desired gambling behaviour.

Other self-regulatory strategies can assist gamblers to overcome ‘present bias’, which is

the tendency to make decisions that are enjoyable today, even at the expense of greater, long-

term benefits (Laibson, 1997). Harm-minimisation strategies should include cues encouraging

people to think about the benefits of saving funds. Several apps launched to target tobacco

cessation use augmented reality to show smokers what else they could spend their money on

(Lake, 2013), or show smokers a superimposed photo of how damaged their lungs are likely to

be based on their cigarette consumption (“Augmented reality app shows smokers their damaged

lungs,” 2011). Another approach to overcoming the discrepancy between short- and long-term

preferences is the use of commitment mechanisms, such as pre-setting limits on the time and/or

amount of money spent (lost) gambling (Ladouceur et al., 2012). Commitment devices can be

formally binding (e.g., mandatory exclusions and limits if certain outcomes occur) or nonbinding

but nonetheless psychologically powerful, such as promises to oneself to limit gambling

expenditures. Planning prompts and reminders to encourage people to follow through with their

preferred and pre-stated course of action can also help facilitate and enhance adherence to

desired behaviour (Wohl, Gainsbury, Stewart, & Sztainert, 2013). This range of self-regulatory

options highlights the potential for a behavioural ‘toolkit’ to assist gamblers in adhering to their

pre-set gambling preferences in a way that works best for them.

Gainsbury - Behavioural economics and gambling

Finally, a key element in any behavioural economic policy or program is measurement

and evaluation. The best method to evaluate an intervention is through a randomised controlled

trial (RCT), which is an experimental design that randomly assigns participants to a control (no

intervention) or intervention group (Victora, Habicht, & Bryce, 2004). This method allows the

impact of the intervention to be determined by comparing behavioural differences between the

two groups. Evaluations may also include economic modelling as an additional form of analysis

in addition to some of the more commonly used psychology-based methodologies. To ensure that

policies and practices are cost-effective and have the desired impact, with minimal negative

unintended consequences, it is essential that they are thoroughly evaluated. One common

regulatory and industry objection to implementing responsible gambling initiatives is the lack of

empirical evidence for many proposed interventions (Gainsbury et al., 2018; Livingstone et al.,

2014). Yet, the evaluation of interventions often requires field trials and access to industry data,

such as player loyalty cards or transactional data, which requires cooperation from the gambling

industry. Given the conflict of interest, such data is often difficult to obtain and may require

regulatory interventions. It is important that gambling operators partner with academics and

policy-makers to share data and design experiments. The results from any trials should be

published, including null findings, so that these can inform the development of subsequent

interventions.

Conclusions

The effectiveness of policies and practices in place to minimise gambling-related harms

are limited in their success. Through understanding how psychology influences decision-making,

a behavioural economics approach offers promising interventions to minimise gambling-related

harms across the spectrum of gambling risk. The appeal of nudging is self-evident: it proposes a
Gainsbury - Behavioural economics and gambling

set of seemingly subtle, low-cost environmental and policy changes that can be applied to a wide

range of individuals, or targeted groups (Marteau, Ogilvie, Roland, Suhrcke, & Kelly, 2011).

However, in gambling, a greater evidence base is required, including both primary research and

the evaluation of existing evidence where it is available. Furthermore, greater collaboration

between industry, policy-makers, and academics is required. It is important to recognise the

value of field testing in policy initiatives through RCTs and other experimentation methods

(Etzioni, 2011). Field testing provides essential evidence on the groups, behaviours, and contexts

that we want to better understand. As gamblers are a diverse group, research is needed to

evaluate interventions for specific target populations.

Greater awareness of the impact of nudges and behavioural economic interventions by

gambling regulators and policy-makers may lead to greater and safer regulation of game design,

and enhanced gambling harm prevention and treatment initiatives. Governments can use

behavioural science principles to assist individuals to gamble within their own appropriate limits.

Legislation on the testing of interventions in the field should also be implemented to prevent

‘backfire’ effects, or negative consequences (Marteau et al., 2011). Where industry operators

claim to have responsible gambling policies, these should be monitored to determine whether the

practices are effective in achieving the desired level of safe behavioural change, as many

inconsistencies in gambling have been seen (Kingma, 2015; Rowe et al., 2017). Many of the

nudges described above have not been implemented or tested to minimise gambling-related

harms and the impacts are unknown. Subsequently, it is essential to evaluate gambling policies to

ensure efforts to minimise gambling-related harms are appropriately directed. The interventions

suggested in this paper may provide useful strategies to assist in minimising gambling-related

harms. Given there is increasing evidence that nudging and behavioural economic interventions
Gainsbury - Behavioural economics and gambling

work across many health-related fields, findings from gambling could be applied to substance

abuse and other behavioural addictions.

Recommendations for a behavioural economics approach to gambling harm-minimisation

interventions

From a behavioural economics perspective, the development, implementation, and evaluation

of a gambling harm-minimisation approach should:

1. Identify and measure the specific target behaviour(s), population(s), and signs of harm.

2. Consider the context or structure of the decision-making environment to identify

inaccurate beliefs (biases) or behavioural barriers preventing a desired behaviour.

3. Design a choice environment that equips people with the right tools to follow through

with, and adhere to, a desired behaviour.

4. Preserve autonomy and empower individuals through freedom of choice.

5. Incorporate evaluation into the implementation process, ideally via an RCT.

Gainsbury - Behavioural economics and gambling

Acknowledgments: The authors would like to acknowledge the contributions made by Thomas
Swanton who assisted with revisions made to the manuscript.

Funding: This study was funded by an Industry and Community Engagement Seed Funding grant
to Sally Gainsbury from University of Sydney and the Commonwealth Bank Australia. This
work was supported by an Australian Research Council Discovery Early Career Research Award
[DE1060100459] awarded to Dr. Sally Gainsbury. There were no constraints on publishing from
the funding bodies.

Conflict of Interest:
Dr. Sally Gainsbury has received direct and indirect funding over the last three years for research
projects, consultancy, honoraria, costs covering travel expenses to attend conferences and
meetings including from from the Australian Research Council, Australian Media and
Communication Authority, Commonwealth Bank Australia, Victorian Responsible Gambling
Foundation, National Association for Gambling Studies, Gambling Research Australia,
Echo/Star Entertainment, UK Responsible Gambling Trust/Gamble Aware, KPMG Australia,
KPMG Tokyo, Cultural and Indigenous Research Centre Australia, Health Outcomes
International, ORC International, Communio, Manitoba Gambling Research Program, GP
Consulting, Nova Scotia Provincial Lotteries and Casino Corporation, Gambling Research
Exchange Ontario, British Columbia Lottery Corporation, Alberta Gambling Research Institute,
Nordic Association for Information on Gambling Addiction, Responsible Gambling Council,
National Council on Problem Gambling International Advisory Board (Singapore), Minter
Ellison (Crown Melbourne), Victorian Community Clubs.
Dr. Tobias-Webb is employed by Commonwealth Bank Australia, however, no constraints were
placed on this manuscript or changes made by any other individuals at CBA.
Professor Slonim declares that he has no conflicts of interest.

Ethical approval:
This article does not contain any studies with human participants or animals performed by any of
the authors.

Role of Authors and Contributors: All authors agree that they meet the ICMJE criteria for
authorship. The material has not been published and is not being considered for publication
elsewhere.

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