Why We See Gambles As Certainties
As someone who had worked for a bookmaker for a couple of years, I have seen countless examples of individuals following their reasoning into financially damaging betting strategies. It always comes across as absurd when an average sports fan truly believes they can pick a good bet from a bad one, knowing well that the industry takes enough money to form markets so efficient that only select few individuals can consistently beat them. And this absurdity has fuelled the growth of online gambling into a billion-dollar industry over the past decade.1
Why people mistakenly think they’re skilled gamblers
The question I have always wondered as a bookmaker is simple: What makes people so sure they’re right? Most customers are aware that these companies are wildly profitable, so why do they view themselves as an exception? Recent work2 argues for a simple conclusion — gamblers intuitively form biased interpretations of how gambling works and can use their experiences and motivations in a self-serving manner to align with their decision-making. In other words, we’re good at convincing ourselves that we’re more skilled than we really are.
The product is the so-called ‘mother of all psychological biases’: overconfidence. Bettors believe themselves to be more skilled and informed than they truly are, and they underestimate the extent to which the odds are stacked against them with any commercial sportsbook. And bookmakers use this to their advantage.
References
- Markham, F., & Young, M. (2015). “Big gambling”: the rise of the global industry-state gambling complex.
- Armstrong, T., Rockloff, M., & Browne, M. (2020). Gamble with Your Head and Not Your Heart: A Conceptual Model for How Thinking-Style Promotes Irrational Gambling Beliefs. Journal of Gambling Studies, 1-24.
- Livingstone, C., & Adams, P. J. (2016). Clear principles are needed for integrity in gambling research. Addiction, 111(1), 5-10.
- The Behavioural Insights Team (2019) Can behavioural insights be used to reduce risky play in online environments. Birmingham, UK: Gambling Commission. Available from https://www.reducinggamblingharms.org/asset-library/BIT-Report-Phase-1.pdf
- Newall, P. W. (2015). How bookies make your money. Judgement and Decision Making, 10(3), 225-231.
- Lopez-Gonzalez, H., Estévez, A., & Griffiths, M. D. (2018). Controlling the illusion of control: A grounded theory of sports betting advertising in the UK. International Gambling Studies, 18(1), 39-55.
- Lopez-Gonzalez, H., Guerrero-Solé, F., & Griffiths, M. D. (2018). A content analysis of how ‘normal’sports betting behaviour is represented in gambling advertising. Addiction Research & Theory, 26(3), 238-247.
- Newall, P.W.. Dark nudges in gambling. Addict Res Theory. 2018: 1–3.
- Thaler, R. H. (2018). Nudge, not sludge. Science, 361, 431-431
About the Author
Stefan Kelly
Stefan Kelly is an MSc Behavioural Science candidate at The London School of Economics and Political Science. He is interested decision-making under uncertainty, political psychology and behavioural insights in policy-making. He is currently undertaking research involving polarisation processes and experience of meaning in life.
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