The Psychology Traps Casinos Hope You Never Learn (Explained by a Gambling Scientist)
Summary
Casinos don’t just rely on luck, they rely on psychology, design, and timing, and in this episode Dr. Sally Gainsbury explains exactly how.
Dr. Gainsbury, an internationally recognized gambling-harm researcher, Professor of Psychology at the University of Sydney, and Director of Australia’s only university-based Gambling Treatment and Research Clinic, walks through how early wins can reshape expectations, why “losses disguised as wins” keep people playing, and how modern platforms deliberately separate users from the feeling of spending real money.
The conversation traces her upbringing around Australia’s race-betting culture to her research on slot machines engineered with “random reinforcement schedules” that override normal learning and keep people returning even while losing.
She also explores the rise of app-based betting, celebrity sponsorships, youth exposure through gaming economies, and how sports culture itself is being reshaped by wagering. Finally, Dr. Gainsbury outlines evidence-based interventions, from smarter friction to personalized prompts, that can reduce harm while preserving autonomy.
Guest bio: Professor Sally Gainsbury is a leading researcher on gambling harms and digital behavioral risk. She is Professor of Psychology at the University of Sydney and Director of the Gambling Treatment and Research Clinic. Her work informs global policy on platform design, prevention strategies, and technology-driven interventions that reduce gambling-related harm.
Top Takeaways
The Origin of Gambling Exposure and Early Childhood Conditioning
Dr. Sally Gainsbury’s introduction to gambling began long before she could process its mechanics. Raised in Australia—a culture where gambling is deeply woven into the social fabric—her mother’s side of the family owned successful racehorses, including a Melbourne Cup winner. At her own christening, relatives attended church wearing earpieces to track horse race odds during the service. While this exposure was normalized within her family, Gainsbury emphasizes that early environmental exposure and the normalization of gambling within household settings serve as significant risk factors, subtly training individuals to view wagering as a standard cultural pastime rather than an activity carrying inherent financial risk.
The Paradox of Extinction: Why Gamblers Keep Playing After Losses
Standard psychological learning models, such as operant conditioning, dictate that an organism stops performing an action when it no longer yields a reward (extinction). However, modern slot machines (or "pokies") and digital wagering products are specifically engineered with random variable reinforcement schedules that override this natural extinction curve. By drip-feeding occasional, unpredictable wins, the platform disrupts normal cognitive evaluation. Gainsbury’s behavioral research shows that slot machines disrupt the brain's capacity to process continuous losses, keeping players engaged even when continued play guarantees total financial depletion.
The Danger of the Early Big Win
Across decades of clinical research, one of the few consistent predictors of long-term problematic gambling behavior is experiencing an early, meaningful win. An early win fundamentally skews a player's psychological baseline. In his interview observations, Zach noted how turning a small initial bet into a large return led him to treat profits as "house money"—a non-fungible currency separate from actual cash. Gainsbury notes that an early win instills a persistent "theory of winning," convincing the player that success is repeatable and resetting their willingness to place progressively higher wagers.
Operating Under the Illusion of Control
Gambling platforms are deliberately structured to foster cognitive biases, most notably the illusion of control—the false belief that a player's actions, timing, or intuition can influence a purely random outcome. Games like roulette display lists of recent outcomes to encourage the "gambler's fallacy" (believing a outcome is "due" because of previous spins), even though each spin represents an independent chance event with zero memory. By providing features that feel interactive or strategic, platforms heighten player confidence, directly inducing them to increase their bet sizes under the mistaken assumption that they are outsmarting the machine.
Structural Removal of Friction in Digital Platforms
The transition from physical venues to digital applications introduces a sinister layer of behavioral manipulation by stripping away transactional friction. In traditional casinos, handling physical cash creates a tangible boundary and clear awareness of expenditure. Digital betting platforms eliminate this awareness by substituting real currency with numbers on a screen, auto-saving payment details, and omitting itemized totals or aggregated loss figures. Gainsbury points out that when platforms remove friction and hide running financial totals, players become disassociated from the real-world value of their money.
The 100% Reality Gap in Self-Reported Losses
On average, gamblers underestimate their net financial losses by over 100%. Because platforms present itemized transaction lines without a simple, consolidated dashboard showing net spend over time, players rely on subjective memory. Human cognition naturally preserves positive memories (wins) while minimizing negative ones (losses). This massive estimation gap means that public health policies, prevalence surveys, and individual budget decisions based on self-reported data are fundamentally flawed, highlighting the necessity of centralized tracking tools like the University of Sydney’s BetWell platform.
Predatory Platform Design and Digital "Dark Nudges"
Modern online sportsbooks and betting apps utilize coercive UX design tactics known as "dark nudges" to push users toward impulsive decision-making. Features like fake social notifications ("John from Minnesota just won $30"), short countdown timers on in-game micro-bets ("Will the next pass go over the line?"), and obfuscated promotional terms are specifically crafted to disrupt rational "cold cognition" and trigger heightened "hot cognition." By forcing rapid choices under simulated scarcity, platforms bypass a player's preset limits and intentional boundaries.
The Normalization of Gambling Mechanics in Youth Gaming
Betting-adjacent mechanics have saturated non-gambling spaces, quietly training teenagers and children to act like gamblers. From loot boxes in video games and social casino apps with inflated win rates to third-party skins wagering in titles like Call of Duty and sweepstakes-based sports apps targeting youth, younger demographics are regularly exposed to gambling architecture without structural protection. Gainsbury warns that simulated casino environments with artificially boosted payout rates instill false expectations of skill, dramatically heightening the risk of transition to real-money gambling.
The Regulatory Divide: Public Health vs. Revenue Extraction
A stark cultural and structural divide exists between regulatory philosophies globally. Nations like Australia and several European countries are increasingly adopting public health frameworks—restricting ad broadcast hours, banning celebrity endorsements, mandating cashless transparency, and enforcing automated player monitoring. In contrast, the United States market has leaned into rapid commercial expansion, allowing media companies, sports leagues, and state tax boards to align in maximizing revenue. Gainsbury notes that failing to regulate gambling through a precautionary, public-health lens ultimately results in societal costs—such as lost productivity, mental health crises, and relationship breakdowns—that far exceed tax revenues.
The Future of Harm Reduction: AI Monitoring vs. Algorithmic Exploitation
Artificial intelligence represents a double-edged sword in the gambling space. On one side, researchers and public institutions are leveraging machine-learning models to analyze customer telemetry data, flag early behavioral indicators of harm, and deliver real-time, non-judgmental intervention prompts. On the other side, operators possess vast datasets capable of deploying personalized AI algorithms to segment users, optimize bonus timing, and maximize individual customer lifetime value. For AI to serve as a genuine protective mechanism, predictive algorithms must be standardized, independent of operator profit incentives, and deployed well before severe harm manifests.
Top Quotes
On the Engineering Behind Slot Machine Retention
"The design of the machine is such that it's intended to override the natural extinction process, which is what happens when you don't win over time. Because the machine is designed with a random reinforcement schedule, it drip feeds wins. The worst thing that can happen for you is you have a meaningful win that you remember, because for you, that means it could happen again."
— Dr. Sally Gainsbury
On the Mathematical Certainty of Losses
"The machine is a mathematical box. What happened on one spin has zero implications on the next spin. Modern machines are programmed with a theoretical payout over a lifetime of essentially infinity. The mathematics behind it dictate that the house will always win. If you continue to gamble over time, it is mathematical that you will lose."
— Dr. Sally Gainsbury
On How Platforms Exploit Human Cognition
"Casino games and slot machine games have zero meaning—it's called the independence of chance events. The games are designed to try and muddy that water. They give you what's called the illusion of control, making you think you can actually do something to increase your odds of winning. The system encourages those biases because when you're more confident, you bet more money."
— Dr. Sally Gainsbury
On the Perils of Experiencing an Early Win
"My first bet ever was a college basketball parlay—$30 to win $360—and it ended up hitting. Immediately, I treated that money as 'house money,' like it wasn't real cash anymore. That early win completely reset my baseline for what I was comfortable betting down the line, and it dissipated quickly as reality set in."
— Zach
On the Absolute Absence of Losing Sounds in Casinos
"When you're playing on a slot machine, you hear happy noises, pings, pongs, and the auditory stimuli of money falling. But when there's a loss, there's nothing. There's no sound—it just goes click and moves to the next spin. It's designed such that you don't recognize the loss, while you hear everyone around you winning."
— Dr. Sally Gainsbury
On Removing Digital Friction and Abstracting Currency
"When you gamble online, it doesn't seem like real money anymore—it's numbers on a screen. Online retailers and betting apps are desperately trying to remove friction from the system so you just click and it's done. When you don't handle physical cash or type in your card details, you lose that moment of pause to think about the real-world value of what you're spending."
— Dr. Sally Gainsbury
On the Complete Disconnect in Tracking Personal Spend
"In any other industry, it would be completely unacceptable not to get a bottom-line summary. If you went to the grocery store, they wouldn't just give you a list of individual items without a grand total. But betting platforms show you line by line by line without showing the bottom line. When we ask people how much they bet, they are inaccurate by over 100% on average."
— Dr. Sally Gainsbury
On the Hidden, Non-Financial Harms of Gambling
"Gambling harms start off slowly and are easily misattributed. One sign people don't notice is that they aren't saving anything. You might be working full-time and paying your rent, but you're not banking money for the future. You miss out on compound interest and financial security, which is a significant accruing harm that you're just not acknowledging."
— Dr. Sally Gainsbury
On Coercive Design and Dark Nudges in Sports Apps
"Any signal that a betting platform uses to make you make a rapid decision is really problematic because it fuels impulsive betting as opposed to intentional, considered betting. Constant pop-ups, short countdown timers, and micro-bets thrown at you during a live match are specifically designed to erode your decision-making."
— Dr. Sally Gainsbury
On the Normalization of Gambling in Youth Culture
"Simulated casino games and youth betting mechanics don't reflect real probabilities—they have inflated winning rates that increase people's perceived chances of winning. Exposing young people to these mechanics builds a false perception of skill and creates an inflated expectation that directly sets them up to transition into real-money gambling."
— Dr. Sally Gainsbury
Full Transcript
Zach: Modern gambling doesn't begin when you place a bet. It begins when a platform learns how you think. Long before Dr. Sally Gainsbury spent two decades studying gambling behavior, her relatives were tracking odds at her christening. And years later, she would work at a pub where she would watch regulars quietly feed their entire paychecks into slot machines that almost never paid them back.
Dr. Gainsbury: We actually have some very successful racehorses, including a Melbourne Cup winner in our family. And famously, my mother scheduled one of my earliest childhood events on a day of a major race. So, my uncles and aunts attended with little earpieces in so they could listen to the race during...
Zach: Wow.
Dr. Gainsbury: ...during what was going on. So, early on, I suppose I was exposed to betting.
Zach: What was that, a birthday party or something? Were they...
Dr. Gainsbury: It was actually my christening.
Zach: So they were in church with earpieces in? Wow. That is an unbelievable image.
Zach: This question followed her for years: Why do people keep gambling when the math says they will lose? This episode pulls back the curtain on the architecture behind modern gambling. Not just casinos, but apps, prediction markets, live stream betting culture, and platforms subversively shaping how attention, emotion, and money moves through the world.
We talk about why one of the worst things that can happen to a gambler is an early win. How slot machines and other games are engineered to interfere with natural learning. Why removing friction from apps changes people's behavior more than we realize. And why most players have zero accurate understanding of how much money they're actually losing. Because the deeper problem isn't just the financial aspect. It's that these platforms train you to believe that the game is responding to you.
Dr. Gainsbury: They're trying to give you what's called the illusion of control, whereas you can actually do something to increase your odds of winning. So, "Oh, I think, you know, bet red is more likely this time." Red's not more likely. It's exactly the same every single time you spin it. There's no memory. But the system is encouraging you to have those biases because then you will bet more money, 'cause when you're more confident on something, you're going to increase your bets.
Zach: We also get into how betting has sunk its hooks into nearly every corner of society, especially in the US, and why Australian gambling culture is starting to look a lot different from the United States. Gambling is becoming an ambient, ever-present layer across sports, finance, social media, gaming. With these new betting-adjacent apps quietly training teenagers to think like gamblers long before they're even legally allowed to place a bet. If platforms can reshape the way you think about money without you even noticing, the real question is no longer who's betting, but who hasn't even realized they've entered the casino?
Dr. Sally Gainsbury, thank you for joining me on the podcast. I appreciate it.
Dr. Gainsbury: It's a pleasure to be here.
Zach: So, you've spent a couple decades at this point researching and studying gambling behavior. When did you first become aware of gambling in your own life? Like, what's your origin story for how gambling entered your life?
Dr. Gainsbury: Yeah, that's a good question. Gambling is very prevalent in Australia. So, I probably became aware of it before I knew the term "gambling." My mother's side of the family has a history of race betting and racehorse ownership. So, we actually have some very successful racehorses, including a Melbourne Cup winner in our family. I grew up with the Melbourne Cup, which is Australia's most prestigious race, being on the dining room table at my cousin's house on special occasions. My uncles always had several televisions on so they could watch the race and watch the odds and things like that on the other channel.
And famously, my mother scheduled one of my earliest childhood events on a day of a major race. So, my uncles and aunts attended with little earpieces in so they could listen to the race during...
Zach: Wow.
Dr. Gainsbury: ...during what was going on. So early on, I suppose I was exposed to betting, but I wouldn't have known that term.
Zach: What was that, a birthday party or something? Were they...
Dr. Gainsbury: It was actually my christening. So they were in church with earpieces in.
Zach: Wow, that is an unbelievable image. Like the priest about to dip your head in the water and your uncle's just like, "Go, go, go, come on, come on."
Dr. Gainsbury: I'm sure they were very subtle about it and very much just considered that, you know, my mother should have known better. She was the one with the racing family. She should have known if she chose to schedule it on that date, that's just what's going to happen.
Zach: Yeah. They're like, "Yeah, Jesus Christ and everything like that, but like no, we really need this win right now." That's a pretty crazy environment to grow up in.
Dr. Gainsbury: Well, I mean, that wasn't in my household, but probably the main exposure to gambling that I was cognitively aware of was when I was working in pubs when I was 18, which is the legal age to drink, hence the legal age to work in pubs in Australia. I was pulling beers, polishing glasses, cleaning glasses. And the other part of my job was doing the betting and what we call "pokies," which you refer to as slot machines, where I would have to do payouts.
It was very nerve-inducing because if you made a mistake with the payout, it would potentially come from my salary. So, you had to take this big long book and write down all the information in the different columns. But I mostly would sort of keep an eye while I was pulling beers for $14 an hour and thinking, "They've got $900 in that machine." That's a huge amount of money to me as an 18-year-old, and they live with nothing. I just couldn't get my head around: why are they coming back if they keep losing? I was studying psychology at the time. You know, the rat learns to stop pressing the button when they're not getting any reward anymore. Why are these people coming back even though they're not getting any payoffs?
Zach: Yeah. I mean, so you would see guys that are coming in that are essentially blowing their whole paychecks? Like, $900 Australian dollars is pretty close to US dollars. Like, that's a lot of money. That's a crazy amount to just be throwing in a slot machine casually at a bar and then just being like, "Oh yeah, like I'm just going to write that off and then come back the next night or the next weekend and just continue to do the same thing."
Dr. Gainsbury: Well, that's right. So, I was studying psychology at the University of Sydney, which is the backdrop you see here, where I'm working now. So, it all comes full circle. I was studying psychology and learning about all different sort of developmental and behavioral theories. And then at night I was going to the bar and, like for example, a Tuesday night, and it was a pretty slow night. So there was a couple of guys in the corner watching dog racing and putting $50 after $50 on a dog race. I'd run it through the betting terminals, and at one point they were too late. They'd missed that—in Australia, once the race has started you can't bet. So they were a bit too late or I was a bit too slow. Bit hazy on that memory.
But I remember thinking to myself, "Well, I probably just saved you $50. I don't know why you're upset about this." They were very upset. And at the end of the day, I gave them the $50 back and I actually don't know what they'd bet on. But for me, $50 after $50 on a Tuesday night, I just couldn't quite get my head around what was going on, that this was some sort of entertaining pastime.
Zach: Do you remember any specific thoughts that you had at the time when you were watching these guys just like throw 50 bucks after 50 bucks? Because as a casual gambler, I'll gamble at bachelor parties. Like, I was just in New Orleans. We were staying by a casino. So we were throwing money on games, blackjack, roulette, and then like it kind of enters my life and leaves my life very quickly. It's a whirlwind of happiness or sadness—a lot of times sadness—and then I don't think about it again until like the next guy in my life gets married.
But then you have other people who it's like a regular, habitual thing. And I think it's very interesting—not from any sort of morally superior or inferior standpoint, but just like what drives someone to keep putting it in the machine? Like, what is the driving force behind, "I just saw the thing happen and I lost, and I kind of know in the back of my head I'm going to probably lose again, but like I'm still totally bought in on this"?
Dr. Gainsbury: And that's what I wanted to understand. So I was in this unique and definitely a privileged position of studying, and so I sought out... I was again very fortunate, one of the world premiere experts in gambling was a professor at the University of Sydney—he's retired now—Professor Alex Blaszczynski, who has really been a pioneer in this field. So I undertook research with him as I continued my studies, doing my PhD on this topic. Because what I wanted to understand was, we learn through reinforcement schedules. We learn from the consequences of our behavior, and this is, to an extent, very basic. Most people are familiar with these sorts of principles. But there's something about gambling that seems to override this learning.
And so that's what I wanted to really study. Looking mostly at slot machines when I first started—because this was a while ago and online betting wasn't as prominent as it is now—looking at slot machines, which still remain the most problematic form of gambling. So the one that people return to when it's least affordable for them. Why would people do this when they kept losing every time?
What I've learned over my years is... well, there is disordered gambling which does become a whole host of other things, and a lot of people have specific individual factors, but the design of the machine is such that it's intended to override the natural extinction process, which is what happens when you don't win over time. You just stop doing it. The machine is designed with what's called a random reinforcement schedule. It drip-feeds wins.
And human cognitive biases are such that people remember wins and positive things much more than they feel those losses. So if you have a big win—and the "big" is subjective to your own means—that's what you really hold on to. What I found is... one of the very few things that are consistent about problematic gambling—one of the very few consistent factors—is experiencing an early big win in your gambling history.
So the worst thing that can happen for you is you have a meaningful win that you remember, because for you that means it could happen again. And that's true, the machines are egalitarian. You don't have to have any education. There's nothing special about you. Anyone can win it, which is why they're so attractive. And they do play on people's determination of trying to get something out of nothing. You know, anyone could have this winning amount. Now, it's incredibly unlikely, but people are willing to chase that. And because the machine does pay out small amounts as you go, or even large amounts periodically, this is very reinforcing for people.
However, what we know is that the house wins every single time. If you gamble over time, you will always lose. And the only way to avoid that is to take that win when you first have it and never gamble again. If you continue to gamble, it is mathematical that you will lose.
Zach: Yeah, it's funny you mentioned the early wins having a significant effect on your behavior down the line, because that is my gambling experience. The first bet I ever placed was I bet on college basketball when I was still in college, like 10, 11 years ago, and I threw in some stupid parlay. It was like $30 to win $360 on like University of Hawaii. I forget who exactly was playing. And my friends were like, "You're just lighting $30 on fire." And I was like, "I don't care. I did my research. I had a Google document. I was like, they're going to win. This is my first bet. Like, I want to make a smart bet."
And it ended up hitting. And then I had the experience, which you talk about in your research, where you treat the money you won as like house money. For whatever reason I was like, "I don't have $360. This is like more money to play with." And then quickly that dissipated into me being like, "Oh, this is kind of the reality." But that earlier experience, I could see how it could lead to like other drugs, like you have a good high the first time and you keep wanting to chase that initial high.
Dr. Gainsbury: Definitely. And then what you've done also is you've taken what was your baseline of $30, which was probably like your max bet, and you've...
Zach: That was more, 100%.
Dr. Gainsbury: So it's like the maximum amount you would consider gambling. Then you got $360 and now you've reset your baseline to a much... now you're more comfortable going, "Well, I want to bet $100 now, you know, I did that last time." So, you're resetting your baseline. You're playing with money in a sense that's not fungible, which means it's betting money. And that $360 is not 360 betting chips. It's dollars. If you had that in your wallet, would you have reinvested it?
But the way that the sites work, whether it's a machine that has credits in it... they want to separate you from your money as much as possible using tokens and numbers on a screen. So, you don't think of it as money. You think of it as like a betting apparatus, monopoly money that doesn't have meaning outside of the context. These are the design principles that are very specifically engineered to encourage people to have these biases, because these are human biases in the way our brains work.
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Zach: You mentioned the random reinforcement schedule. Does that apply to the machines and the table games like if you're playing blackjack or craps, roulette? Or is that a different motivational mechanism?
Dr. Gainsbury: Yeah, I mean, it all wraps up in different aspects. The random reinforcement is specifically built into the machines because the machines are nothing more than a mathematical model. A lot of people think of them as having properties, you know, and again the designers play on this. One's dolphin-themed, one's themed after a specific movie. So, you get to sort of give them personalities. People say, "Oh, this is my lucky machine." Or, "That machine's in a bad mood today." Or, "Someone's just played that and taken all the money out." Like, all that stuff has no basis.
The machine is a mathematical box. That's it, 100% there. It has no memory. What happened on one spin has zero implications on the next spin. Whether you press the button slowly or quickly, whether you pause to go to the toilet, the machine's mathematics run in such an infinitely fast way, it makes zero difference anything that you do to influence your outcome.
And a lot of people think... because there are confusing terminologies. So the machines are required by law to pay out a certain amount. It differs by jurisdiction. In Australia, machines pay around 90% out. And so people will think, "Oh, good. So if I put a dollar in, I'll get 90 cents back." But that is not what that means. It means over the lifetime of the machine, it has to pay 90% out. The lifetime of a machine is maybe 40 years. It's essentially, mathematically, infinity. So it means that at some point one person is going to get a lot of money and everyone else is going to lose, or some variation of that, because some machines pay out little bits more often or big amounts less often.
But essentially again, the mathematics are behind it that the house will always win. No matter what you do, you will definitely lose. And we can show this to clients in treatment experimentally, where we show them if you had a million dollars and just kept reinvesting the winnings, it doesn't matter how long you would play for, you would definitely lose that money. There is no mathematical way for you to come out ahead. Even if you just reinvest your winnings, you don't win more, you just lose more.
Zach: Yeah. So the 90% at a slot machine would be like, the longer you sit at that slot machine, the more you're leaning towards the 90%? So it's like if you put in a dollar, the 90% is the lifetime of the machine. You could sit at that machine for 3 weeks and not get even remotely close.
Dr. Gainsbury: It's a 40-year window we're looking at. So there is no way for anyone to get closer to the 90%. It doesn't... it's not a memory. It doesn't happen at one point.
Zach: Okay, so it's like from now to let's say 2070 whenever that machine is decommissioned, it has to pay out 90%?
Dr. Gainsbury: Again, it doesn't have to pay out. It has to be programmed. It's a theoretical payout. The money doesn't sit in that machine. And also don't forget these days modern machines, they're usually linked across venues, even across whole states. The money doesn't sit with that machine and the machine itself has no memory. It's a theoretical property built into the machine. It's not a practical sense that this specific machine has to pay out. It's more a way of describing the mathematics that are built into it.
Zach: So, would it be correct for me to have the visualization that when I sit down at a machine, I should think that for every dollar I put in, over a period of time, I'm losing 10 cents? Like, I'm basically lighting 10 cents on fire every time I play the machine? Or is that not a good way to think about it?
Dr. Gainsbury: It's more about... so if you think about, for example, you have a bag full of 10 red balls, and 20 blue balls, and a thousand yellow balls, and one green ball, or even bigger than that. You're trying to get the green ball, but every time you take out a blue ball, that ball hasn't been removed. It goes back in there. So every single time you play, the same mathematical principles are in place. It doesn't matter if you sit there all day and gradually draw out balls, so that green ball is the only one left. Every time you take a ball out, it goes back in again.
Zach: Yeah, because I'm just wondering... you mentioned the treatment center with people who have problems visualizing that, and it's such a powerful thing that when you walk in a casino you think that you're due because you lost like nine times it hit red on roulette and you're like, "The 10th one has to be black. Like, if it's not black, I'll literally fly back to New York or wherever you came into the casino from." That is such a powerful thing to break. And I catch myself falling into that when I'm in that situation where I'm like, "Well, I just lost like seven times..."
Dr. Gainsbury: The venue sets you up for it. So when you're at the roulette table, it has a list of what the previous outcomes were, which are completely... they have zero impact. That roulette ball has no memory of that. You seeing a list of them is only there to promote irrational thoughts. So that way that casino game is designed, is designed to play on human cognitive biases that we all have where we look for meaning in a world. But casino games and slot machine games have zero meaning.
It's called the independence of chance events, and the games are designed to try and muddy that water. They're trying to give you what's called the illusion of control, where you feel you can actually do something to increase your odds of winning. So, "Oh, I think, you know, bet red is more likely this time." Red's not more likely. It's exactly the same every single time you spin it. There's no memory, but the system is encouraging you to have those biases because then you will bet more money, because when you're more confident on something, you're going to increase your bets.
Zach: So, how do you break the spell with someone who's engaged consistently in problematic gambling? Like, what are the actual platforms or the exercises? What do they look like to show someone, "No, this is actually what's happening"?
Dr. Gainsbury: Yeah, look, that's a really good question and it does depend on the individual. So, often by the time someone comes in for treatment, it's a pretty well-developed problem. And when that's the case, it's not just the thinking around the gambling. There's a whole host of personal, financial, mental health issues that we're dealing with. So a lot of the time we have to unpack things before we even start touching the gambling.
But when it comes to the gambling, and this is a really useful inoculation exercise for when people start gambling, because one thing we don't typically get in our clinic is mathematicians. When you understand the game and how it's designed, you're less likely... I won't say you never have problems, because we have people who work for gambling companies with problems as well. So it's certainly not a complete cure-all, but it does help if you're not so motivated to gamble in the first place. So what we can do is explain to people using visualizations how the mathematical works on the different products.
Unidentified speaker: When a win occurs, the player is paid back more than they wagered. Here, the player was paid back 125 credits. This is more than the wager of 75 credits. The player has come out ahead by 50 credits. A loss disguised as a win falls somewhere in between these two scenarios. Here the machine pays 25 credits. This is less than the player wagered, so it is technically a loss of 50 credits. However, the machine celebrates this outcome as if it were a win.
Dr. Gainsbury: And also taking those blinders off, almost like seeing how the sausage is made. When you understand the revenue models of the gambling companies and the governments that tax them... you know, these are companies that don't exist for the benefit of entertainment. They're for-profit companies. So, when you see how they're designed such that they can never lose, they're the sort of things we need to teach people so they can understand. It's like going to the movies or paying for a round of golf. You're going to pay for it and you're going to get something out of it, but what you're getting out of it is the entertainment of that time. You're not going to get the extra things. That's what you need to consider. Like, you know, that's maybe something nice that comes out of it.
Zach: So, the gambling companies, it's like they're showing people an image that they want to give off. They want to portray. It's almost like if the gambling company was showing a film on a projector, but then they edit out all of the sad parts. And so they only want people to see the winning, happy side of it. But behind the scenes, the executives, the analysts, the programmers see the sad side of gambling and they're like, "Yeah, let's cut that out of the experience."
Dr. Gainsbury: That's a really good way of putting it. And so you can see this, again, once you take the blinders off and you start to look for it. So when you're playing in a casino or playing on a slot machine, you hear the noises, the pings, the pongs, the happy sounds... it actually makes, even though money is actually often not included, it often makes money-falling sounds. So it has all these auditory and visual stimuli by design. And I go to gambling conferences and expos—they are very well engineered. Even there's booths on seat design. Those seats are as comfortable as possible. It's all set up, there's scents... it's all designed to put you in this particular mood state.
But when there's a loss, there's nothing. There's no sound. It just goes click and then next one. There's nothing that happens. And yeah, it's designed such that you don't recognize this. So all you see is, even if you're losing and it's going click click click for you, next door or on the other side of the casino, you can hear someone winning. And you still go, "Oh, well, it is happening. I'm almost there. I'm getting closer. I must be able to do it because that guy over there just won." So it's all designed.
I actually saw a very interesting experiment someone shared with me from Australia recently, where they worked with sound engineers to design something called "the sound of losing." And it was based on video games like Mario when you die and it makes a really sort of, you know, like a ding, these sorts of noises, and a negative slide.
Zach: Yeah, 100%.
Dr. Gainsbury: So like, there's no losing sounds in poker machines and people don't really know that. Anyone you speak to doesn't know it, and it's not fair.
Unidentified speaker 1: The sound that we developed for the pokies, we based it on emergency sirens and like game over sounds.
Zach: Give us a sample of some of these.
Unidentified speaker 1: So, just imagine you're having a slap. You've drawn out another hundred bucks. Even that's a subconscious process 'cause the ATM is sitting right there. You only hear the winning noises. You're on the punt. You're not winning. What are you proposing? This is what you want to hear to snap you out of that addiction.
Unidentified speaker 2: Yep. Yeah, that hurts.
Unidentified speaker 1: Miserable. Space Invaders inspired. Sounds like your Digimon dying. I feel like that. And then there were a few of these as well. "You lose." We did sort of chat about actually saying things like, "You lose your family."
Dr. Gainsbury: When they got this machine and they made it have this sound every time a loss happened, surprisingly enough the regular players decided they didn't actually want to play this machine because every time they lost it made it much more salient to them. So these are the things that will help people when they're gambling, if they see these for what they are. But also the thing is when people gamble, particularly if it's a destination, you don't want to focus on that. You're focusing on the fun, you don't kind of want to have that negative thought. So it's a really tricky thing.
What we try and do is get people to say, "Well, if you're going to gamble, and you're able to, it's legal and it's affordable, we want to really make people intentional. Like, put the right amount of money in your pocket, stop when you've had enough." They're the things that we need to do. It's not about saying, "Well, don't do it." It's about saying be informed, understand how these companies work, and play to a level that you're comfortable with.
Zach: Yeah. I was going to say like, the being informed part I feel like it's... sorry, can you hear me still?
Dr. Gainsbury: Yes.
Zach: Okay. It made a weird sound for a moment. Speaking of negative slide sounds... I'm just thinking about the way that I'll track how much I've spent in a casino. Like I literally have to take out the cash and I have the cash and I have to put it down and I see the cash go away. I've never really used the apps much. I know that's becoming a bigger and bigger thing now. Like, every other podcast ad is a gambling app. I see it on the subway all the time in New York. It's just all around.
And once you hook up your card, you're never really handling cash. You don't have the experience of handing a dealer $200 and being like, "Okay, that's real money." So the apps seem like they have this extra sinister layer to them where it's built to make you forget that you're actually spending real money.
Dr. Gainsbury: 100%. And that's again by design. And there are definitely efforts to get cashless going in casinos as well, which again reduces the friction and the salience of handing the money, because once it goes onto a screen... we've worked with individuals who gamble online and one of the first comments they made was, "It doesn't seem like real money anymore. It's numbers on a screen, there's an extra zero, it just it's not salient," because you're not thinking of it in its equivalence of value of what else you could do with it. Now we are getting more used to digital transactions. So this is just going to be the way of the future.
What we need to do is inoculate people and build more friction into the system. So, similar to when you're shopping. For me, I always log out and so I have to log back in, and I don't auto-check any of those "go straight to cart" or "pay right now." I actually purposely keep the friction in the system which the online retailers are desperately trying to get rid of, because they want you just to click and then whoop, it's all done, my address is entered. "Would you like to save your card?" I don't do that on purpose. So by typing my card in, it does provide me that moment of pause to think about it.
So the same with gambling online. We're actually designing a tool at the moment at the University of Sydney called Betwell. And what it does is it grabs the account statements from all your different betting accounts and it brings them into one place. Because that's the other thing: if you're betting on different websites, you've got no way of tracking how much you're spending. You don't get a receipt. So we're building it in. We've got a dashboard where people can see what their spend is. Are they up? Are they down? Because again, gambling has this different mentality. It's not like buying a toaster or a pair of fluffy slippers that, you know, a box will arrive and you go, "Oh, yeah, that's right. I did that and now I've got it, and do I return it or keep it?"
When you gamble, it's just gone. There's no visual symbol. There's no boxes piling up or embarrassment because the postman's coming to your door with more boxes. It's just completely hidden. So by bringing together all your betting statements and making a visual dashboard where people can actually see your trends over time, you know, this is how much you bet, this is how much you won, but this is how much you lost. And that also includes the less visible things, like you said, the house money. So, "I won $500, I'm so great." If you spent it all, does that really count? Like, did you win $500? What does that mean for you if you never took it out of your betting account?
Zach: Yeah, your memories start to be manipulated in a positive way in a casino where you're quickly forgetting your losses and then you're telling your friends like, "I just won $700 on craps," even though you've already lost $500 of it.
Dr. Gainsbury: Exactly. Exactly.
Zach: It is a really good point about having the dashboard. You've mentioned this before, because I've listened to more than a few of your podcast appearances leading up to this one, but you've spoken about how in other industries it would be insane to not have a spreadsheet of how much you spent. Like if you went to the grocery store and you asked for a receipt and they were like, "No, we're not going to give you an itemized thing. We're not going to tell you how much the chicken is. We're just going to give you one big number at the end, and the rest is just in a black box. Or we'll tell you how much the tomato sauce was and the chicken, oh, we're not going to give you a total, but here's the numbers. You go and work it out." Because most betting platforms are like, "Oh yeah, sure. Here's your bet, line by line by line." But they don't show you the bottom line.
Dr. Gainsbury: No. And you would never shop there again. You'd be like, "Yeah, this is the last time I go into this place." But it would be unacceptable.
Zach: I guess by the way that it's just been presented to us in the gambling sphere, it's just an accepted thing that you'll have no clear, coherent breakdown of how much you've lost or how much you've won. And there's no sort of way to track any of that.
Dr. Gainsbury: That's right. And that's why we designed this tool, because we recognize again that it's not about quitting gambling for a lot of people. It's about having this more intentional gambling. So if you want to bet, fine. We're not here to tell you what to do. But make sure you know what you're doing, because if you're not... we ask people, we've done this a couple of different times. We ask people how much are they betting. And typically this has been done in what's called prevalence studies, where the state will roll out a survey across a representative sample and they'll ask everyone how much they're betting and how often they bet, and they set policy based on this.
There's a big problem in the sense that people don't know how much they're betting. So they just make an estimate. And often, this happens across different retailers. Like I couldn't tell you exactly how much I spent on groceries or coffees last month, but I could give you a ballpark. I can work out... I mean, coffee is pretty expensive in Australia, so you don't want to know, but I could work out how much I spend.
Zach: I'll take that exchange rate in Brooklyn. It's pretty rough here as well.
Dr. Gainsbury: So, I'll spend, you know, $4.50 on my soy cappuccino, and I do that X many times a week. So I can give you a ballpark. But with gambling, it varies so much because you can kind of bet a certain amount, but whether you win or you lose, did I gamble that away? It's really tricky to track. So we found on average people are inaccurate by over 100%. Which is a pretty substantial difference. And if you think that's what policies are based on, then that's fairly problematic.
So and then you also think, well, we tell people, "Set a limit" or "Be intentional." If they don't know how much they're betting, how are they supposed to set a limit or gamble responsibly if they are being manipulated such that they can't track their gambling? So, this is why this is a really crucial step of having some way to actually keep a track of your wins and your losses.
Zach: So, I'm presuming that casinos would never actually give people a visual dashboard in-house. It would have to be something on an app on your phone, like personally tracking it. Like, they track everything. Casinos would be able to do that easily, but you'd never walk up to a table... if I go play craps, they're never going to give me anything that would lose them money. So it's all on personal accountability essentially.
Dr. Gainsbury: It mostly is. Although, if you do play with a player's card, which is how they track you—and most people do because then you get your rewards and all these sort of things—typically you will be able to request a statement. But as I mentioned previously in our shopping discussion, it'll be an itemized statement. So, you'll have to kind of add it up.
However, in Australia, they're recognizing this and making lots of changes. So we are pushing towards cashless gambling. There's a move to try and encourage cashless gambling that would allow people to track. The casinos have now gone cashless often for money laundering protection purposes. So again, you can get an account statement with a summary, like a bank statement essentially. And then for online betting, it's now a legal requirement that each betting company has to by law send you a statement which has not only a clear summary but also a visual depiction of what your gambling looks like over the past six months.
So that's what our tool is using. It's using these emailed statements that individuals can then upload onto our platform and they can do all of those so that we bring them all together, as opposed to people having to look at all their different accounts or just ignoring them completely.
Zach: You mentioned teaching the math to people who have engaged with problematic gambling to sort of help them visualize what's actually going on. I could be completely wrong, but I thought I saw something this past week that said there was a study with two groups divided between people who learned the gambling math and people who didn't, and the outcomes were very similar. Is that correct? Like, how does learning the math help you lose or engage less in problematic gambling?
Dr. Gainsbury: No. So it doesn't... learning the math itself isn't helpful. And we've seen this repeatedly. You'll take students and give them a semester of betting specific probabilities versus some other kind of math-based learning, and it doesn't change their betting behavior. And that's because again, as humans we have what's called hot and cold cognition. So you can know something—like, I know that I'm probably not going to win the lottery, but I still buy a ticket because I hope that I will. And the same with betting.
So that's why when I say, you know, when it comes into treatment, this is just one part of the treatment. But we have to also unpack what is their motivation? People don't typically gamble to the point of causing problems in their life unless gambling is solving some sort of issue. So what is the motivation behind it? Are they using gambling as a way to escape from distressing emotions? Are they feeling stressed, and so when they feel stressed or depressed or anxious, then they gamble? Are they gambling with this kind of risk-taking? There often is this motivation of winning money. So there is an element of unpacking that, but it's not the only thing you do.
Essentially, what we have to do is get people to a point not so much where they're behaviorally just avoiding gambling—that's sort of the first step, let's just exclude you or stop you in some way because you're having control issues—but get you to the point where you no longer *want* to gamble. But to do that, we often have to figure out what is that motivation in the first place and how can we unpack that? Maybe resolve some other issues that are going on in your life.
The mathematical part is around decreasing motivation. And again, it's looking at the bigger picture than just the math models of, what is the design? How is it working? What are your cognitive biases? So that's a big part of it is learning not just, "Oh, this is a math model," but "This is what my brain is doing to trick me into thinking this way," or "These are my own personal tendencies." So it is more nuanced than just the mathematics.
Zach: You mentioned the hot and cold cognition. It's like thinking or acting based on emotion versus acting based on reasoning.
Dr. Gainsbury: That's right. And it's not just gambling. It's other areas. You know, if you're at work and a colleague has a birthday party and passes you a slice of chocolate cake, and you go, "Oh, do I eat the chocolate cake?" You know, it's do you put yourself in that situation where you're at a buffet? Like, personally, I avoid buffets because I know if I'm confronted with 15 different types of desserts, I'm probably not going to try all 15, but I might try three when I would normally only have one or none. So, it's about what situations do you put yourself in, learning what your personal values are, and reflecting on those.
That's the intentional part of: what do I want to achieve? If I want to go to Vegas for a weekend, and this is the money I've set aside because I'm going to have a bachelor party, like fine. We're not telling you not to do that, but think it through. If you want to gamble every week, great. Is it affordable? What are the consequences of that? What are the costs of it? So we want people to be acting intentionally and just thinking through the consequences. And that's what you need to do, is be making those intentional decisions. And that's what's eroded by the venues and the products. They try to override all of those other thoughts in your life.
Zach: The cognitive biases you mentioned... I brought up the house money effect, and I guess the "I'm due" effect, that would be optimism bias? What are some of the most common biases you see that overlap with gambling?
Dr. Gainsbury: Fundamental... there's a couple of fundamental ones that you can then have different biases that reinforce it. One is definitely "I'm more likely to win." And this can be that, you know, I'm due, I'm lucky. The gambler's fallacy, where it's "I haven't won a whole bunch in a row, so I'm due a win now." Or the hot streak, whereas I'm like, "I've won a lot, so I'm going to keep winning." So it's something that is essentially distorting for you in your mind your own personal likelihood of winning.
The second is what's called the independence of chance events. And this is really a failure to understand—and again, I don't want to say failure, and I'm purposely trying to avoid terms like erroneous biases or distorted cognitions. It's not you as a person. These are biases everybody has. It's human tendencies, it's how we survive, and the machines and the venues are manipulating these. So I do want to let people know that this is not some kind of failing of you to have these. These are very common.
But again, so the misunderstanding of independence of events. Thinking that it's going to be red because the last one, you know, we had three blacks in a row. Misunderstanding that the payout of the machine isn't 90 cents on the dollar, it's 90 cents over the lifetime of a machine. Again, these are very complicated math models to understand. So it's not a personal failure that you have not...
Zach: I mean, you spent five minutes explaining to me that 90% is not 90 cents on the dollar. So I'm like, wait, so you're telling me... I'm like...
Dr. Gainsbury: It's really complicated, and different machines have different ones. So that's the other one. Thinking like... misunderstanding the outcomes of winning, like how the outcomes are determined. So thinking—this is where you again might have some illusions of control—"If I wiggle it in this way, or if I do this sequence, you're going to influence the outcome." Or like in betting, thinking, "I've got really in-depth knowledge about the teams," or, "Oh, it's rainy, so I know the track's muddy and this horse does better." These are the kind of things thinking that you have some way of knowing the outcome that is enhanced in some sort of way.
First of all, even if there is some way specifically in betting to know, don't think for a second you're smarter than the betting companies who have teams of analysts and computer algorithms. And there is no way, unless you are one of a literal handful—less than 1% of savvy punters who've definitely been kicked off all the main sites—that you are able to out-predict the betting companies. They know all those details.
And the third one is again more around the personal things that you bring to it. And this is a lot of what we have to unpack with people, is what are you bringing? So you're not walking in the door as a random person. You've got all your own personal thoughts and things going on that's going to drive your behavior. So what's what we call the theory of winning. And this is very personal because it does go back to that first example you gave of, "I had that first multi-leg bet, I have these personal beliefs that are unique to me." That's my theory of winning. And that's what we really need to unpack for people.
Zach: Like every time I'll walk into a casino, it's like you tell yourself a story and you're only paying attention to the things that build up that story. And you're also, when I've been in casinos, it's been with like eight other guys that are also validating everything that you say. So it is interesting. I'm wondering, in your research, are you able to tell what predisposes people more to problematic gambling? Is it genetic? Is it environmental? Is it a combination of those things? Complete luck? Like, how do you determine that?
Dr. Gainsbury: It's a good question. So firstly, I'll define what I mean by problematic gambling, because the terms are thrown around a lot. There is a thing called a gambling disorder, which is a mental health diagnosis and it has specific inclusion diagnostic criteria. When we refer to problem gambling, it's not that diagnostic in a sense that you need a clinician, but it's around when the gambling has significant problems or significant deficits and disruptions to you and or the people around you.
So it's causing harm, and most likely these will be psychological. These are the first harms that start to occur. You start to get a little bit stressed, a bit preoccupied. As with most things, they start off a little bit slowly or at lower levels. It doesn't overnight typically become a full-blown problem. So people often miss the warning signs, feeling, "Oh well, I'm a bit stressed, I'm a bit anxious, I'm a bit preoccupied, but there's something else going on." There's always something else going on, so it's easy to not draw the lines.
But people start to lose their self-confidence, start to be preoccupied, but then if you're preoccupied, your relationships are suffering, your job is suffering. So then other problems will start to come up as well. So it was very reinforcing and cyclical. There's obviously financial repercussions. However, these often can be hidden at first as well, because the first things are not necessarily, "Oh, I can't pay my rent." You might just have less discretionary money. One of the signs that people typically don't notice is they're not saving anything. You might be working full-time, but you're not banking any money for a future purpose. So you're not saving for a house or putting away anything towards retirement. And this isn't a harm that you're necessarily recognizing or even agree that it is a harm, but if you miss out on compound interest and you're not doing this, it is a significant harm that is accruing, but you're just not realizing or acknowledging it.
So then you're not doing as many other things. This is when you start to gamble. You're gambling with friends, but you know they all go and do something else and you kind of hang back, or you gamble an extra day without them, or you start to be a little bit secretive because there are some peer effects like, "Oh, I'll just do it, they won't know." Or, "There's one buddy who I bet with a little bit on the side, but most people don't." So when you're starting to hide or downplay it or reduce it, that's a really important red flag for yourself that something's going on.
Zach: Cuz it seems like it's the easiest problem to hide, gambling. You alluded to this before, it just goes like addiction... like if you're drinking, if you have a friend that's a drunk or if you have a friend that's addicted to amphetamines or benzos or any other drug addictive behavior, there's physical signs. Even a sex addiction, like you have to spend time setting things up. Whereas you could be sitting next to your girlfriend on the couch and lose $800 and she'll have no idea and you're just sitting there watching Netflix.
Dr. Gainsbury: And unfortunately that happens all the time. It is incredibly common, and that's why the effects are... when we say gambling problems or gambling harms, it's not just the individual, it's the effects on the other people. We see around 30% of our clients are what we call significant others. These are the family and the friends who have been harmed in some manner by someone else's gambling.
So it's the relationship where you're just not sure why your partner's disconnected because they're not really listening to you or they're preoccupied. You think, "Oh, maybe it's work stress," and there probably *is* work stress because they're doing the same thing at work, so they're not getting as much stuff done. So it's really easy to misattribute it. People often maybe go to a doctor and say, "I'm just not really sleeping well or I'm feeling really stressed," and get some anxiety pills or some sleeping tablets which are totally not helpful. And then you're feeling stressed so you want to gamble, and then you're financially a little bit more in the hole so you want to gamble. "If I just get this big win, then I'll be able to pay it off."
So it's this real cycle that goes around and around, and then as it gets entrenched people are doing less social activities, less other activities, so then they've got less of a support network. So it gets really entrenched. But going back to your question of who's most vulnerable: there's no group or individual who's immune from it. So we can't say, "Oh, this is only young men." Young men are a pretty big risk group, won't lie about that. But anyone can engage with it.
There are some risk factors. If you do have another mental health problem or issues you're dealing with, you're just more vulnerable. And that's because you've got emotional dysregulation and stress, you've got reduced cognitive capacity. So we talk about the importance of these cognitions, and if you are already easily aroused or triggered or not thinking clearly because you've got something else going on, or you've got a mental health issue, then you're more vulnerable to falling prey to this design.
And the other ones, as I mentioned, is having an early big win, the learning environment. So if you grew up in an environment where gambling is normalized or you see these really positive effects and you don't see the negative effects, that's also a risk factor for people. Because it's what we call normalizing gambling such that you learn, "This is just something you do if you get stressed." So this is something that we have to be mindful of as well.
Zach: The young men aspect of being very susceptible to gambling. Do you think that's more connected to the act of gambling or where the advertisements tend to appear? Cuz as someone in podcasting, I see statistics, I know that even though more and more women are listening to podcasts every day, the majority are men. And when I listen to podcasts, every other ad now is for DraftKings or prize picks. Like it's insane. Same thing on YouTube. YouTube is predominantly men. If you see a gambling ad there, do you think it's more advertising, more like men are more susceptible, or a combination?
Dr. Gainsbury: It's definitely a combination. Men traditionally have bet more, but certainly for pokies it's now much more 50/50. And casino games tend to be more male-based, whereas more social or chance-based games like bingo tend to gravitate more towards women. Betting does seem to be a male-dominated activity. There's something that really plays into the competitive and achievement nature. Obviously, men are just watching sports more. So it's also aligned with the target audience of sports fans, or the natural hunting ground of a betting operator. They're what we call "easy prey." They're already interested in the sports and all the taglines that, "Oh, make your sports more interesting, jazz up your interest in sports."
Which is funny because now in Australia where we're a good decade on of going too far and trying to come back, we've now got anti-betting ads saying the game *is* fun, like, make the sports fun without the betting. It's highlighting the opposite of like, "No, no, the sports are what's engaging, you don't need the bets to make the sports fun." The sports are what you were interested in the first place. Keep it about the sports. Keep it about the fun, about the team.
Because there's also for sports, as much money as they're making from selling their betting rights, the athletes are getting... like in this awful position where they're constantly getting hate mail and death threats if they cause someone to lose a bet. It's a really serious problem. It's also damaging sports integrity. So there's lots of issues going around, but it is something that is aimed at a group that's already naturally interested in betting. And if you can tie in the social and the sport, so the advertising is obviously targeting this group, it's having this cyclical effect.
Zach: I can't imagine the pressure on a professional athlete. You know, guys talk in locker rooms before the game starts. They're aware of the lines even if they're not allowed to bet on them. Like, someone knowing that because they missed a kick or a free throw, they just did like a $100 million swing on the betting. It's an insane pressure, and everything is associated with the betting. When they're announcing the scores or the halftime shows, everything is associated. And I'm speaking more from the US. I know it sounds like Australia is more ahead in...
Dr. Gainsbury: Yes. Oh, don't get me wrong. We had that moment, but that happened for us in 2015 when we had betting operators on the sideline of the football game during... not even like during breaks in play, like at halftime. They were on the sideline calling the game, the commentators were calling the games, and that reached a community sentiment where there was a tipping point.
So that now, the regulators are trying to claw it back. We can't have ads during child-friendly hours. You can only have the gambling ads in the evening. You can't have those promoters part of the betting commentary team anymore. So there's still an inundation, and as you say it's really hard to regulate social media and online ads. But we are having this rebalancing effect where there's an... people, the community is really against it. Community sentiment is sort of 80% want gambling ads banned, even the bettors, because no one wants this stuff shoved down their throat.
But we're at a mature market, whereas the US, you've got more and more markets trying to compete for the same audience. So there's only more incentives for every operator to try and throw more and more and more money at the captive audience.
Zach: Yeah, I feel like, because you mentioned in Australia they have these anti-gambling ads of "the game is fun enough, you don't need to bet on it," I feel like the gambling pitch in America is almost like, "You have a drink while you watch a football game, have a bet. Like, throw 30 bucks on it, even if it's not a team that you care about, that's a way to care about it is that you throw a small bet and all of a sudden you're engaged for three hours."
So I don't know if we'll have an elastic effect in the US. I'm sure you know the gambling culture and the bubble is huge right now in America. So it's like something has to happen, the levee is going to break eventually. I don't know when that's going to be, but it seems like it's only getting bigger and bigger, and I think it'll go that way.
Dr. Gainsbury: It's sort of a joke we say that... and don't get me wrong, this differs wildly, you've got all the different states. I'm not making any sweeping statements, but it does seem like there's been a look at what happened in the UK and Australia that's now being clawed back, and gone, "Oh no, let's do that, but let's go bigger. Let's go harder on that." Because in a time when gambling generates significant revenue for states in terms of taxation... I can't imagine that the US sporting teams need more money, but the other one is the media companies.
One of the biggest stakeholders that has emerged in Australia is the media companies, who are selling the gambling ads for higher amounts than Steggles Chicken is paying to advertise their products. So it's one of the biggest fish that they can really charge the high premiums for. So the media companies, which are obviously very powerful lobby groups as well... the more different groups become involved and are getting a slice of the pie, the harder it's going to be to wind back this golden goose.
Despite the ironic thing being, the harms cost perspective will definitely outweigh state revenues and things like that, because loss of productivity, relationship breakdown, impact on personal and communities is a huge cost. Even suicide rates, things like this. But these are not the things that are attributed immediately.
Zach: What makes Americans so bad at regulating harm? Like I'm just thinking about Australia. I thought about gun rights. Like you have shootings in Australia and then there's an immediate response to, "All right, we should probably regulate guns." Gambling gets out of control, you pull gambling back. And this is a genuine question as someone who's observing America: what is the thing that you see where you're like, "This is out of control," or "This is driving it"? Like, what comes to mind with the difference in cultures?
Dr. Gainsbury: Well, I'm definitely going to stay in my lane with this one. I sort of stay on topic and within my area of expertise. And look, there are some people who've been working in the US for decades to really champion reducing gambling harm. The politics are way more complicated than I can even start to get my head around in terms of legislative change, and gambling companies and the way it's all set up.
And I think for me, at least in comparing it to Australia, there are a lot more systems in place to focus. We take more of what's called a public health approach, which is more like a precautionary principle. It's certainly not perfect, but there is more of a focus on what's the harm before something's allowed, as opposed to, "Well, let's just see what happens and what we need to do to fix it up afterwards, and it's sort of an individual's problem if something goes wrong." So a public health focus is really thinking holistically about what's the impact going forward, what are the vulnerable groups we need to protect and think of. So it's a different type of policy approach.
However, I will say in Australia there's much more of a focus again on this kind of ambulance at the bottom of the cliff where we've got treatment. And that's freely available. Every person in Australia has access in-person to treatment and online to treatment. There's no cost, there's Medicare. So that is really well supported. We have the ability to self-exclude. There are some things that are in place, but there's not a lot of things to stop the harm developing in the first place. And that's where I'm really trying to look at things of, if people are going to gamble, how can we give people the tools and resources and ideally redesign the systems and the products such that people are gambling in an informed, intentional way in the first place?
Zach: Do you find that the gambling apps are riskier than being in a physical casino?
Dr. Gainsbury: It's a good question. There are definitely some aspects that have unique factors that contribute compared to the casinos. And overall, the slots are still the number one cause of harm. They're so accessible. They're much more embedded into the culture. Internet gambling is obviously increasing, and so there's likely going to be a tipping point related to age and culture and a few different things. But pokies are really still the backbone of the Australian gambling industry, and I don't see that changing.
So I wouldn't say they're more risky in a sense. It's not like a dose effect where if you play online, you're more likely to have problems. That's just not the case. In fact, most people who play online don't have any problems at all. So pokies are potentially more problematic because of the way they're designed, and the venues are really antisocial and just all set up to allow people to continuously gamble.
However, the things that online make it tricky are that you are playing with this digital currency, there's less social factors, it's easier to hide. You know, it's quite unrestricted on what you're betting on. In Australia, we only have betting allowed legally, but if you go to an offshore site where you can access slots or casinos, these more continuous forms of gambling, it's really easy to sort of sit there, gamble 24/7. There's easy access, you don't have to think about driving to a venue. So there are features of it that make it riskier.
However, on the flip side, there's features that could make it safer because you could set it up such that you can identify people. At the university, my colleagues and I have developed algorithms that identify risk factors. So an operator could start to run these algorithms and ping customers and say, "Oh, you've got risk factors. Let's have a phone call. Let's have a check-in. Why don't you set yourself a limit?" So there's a lot more you can do to customize and personalize interventions much earlier on than when you're in a venue and you're literally relying on someone standing in the corner watching you and going, "Oh, okay. Maybe we should have a chat about this. Oh, you're fine, okay, don't worry about it then." So the personalization of interventions is much greater as a potential online as well.
Zach: So those pings would come to the gambler through a personal app. That wouldn't be through the casino.
Dr. Gainsbury: It could be either way. So at the moment in Australia, the operators are required to quote unquote identify someone who has a gambling problem. So they are required to be doing these monitoring and screening processes. And if that happens, they might do sort of a customer care call and check in with someone. And different operators have different levels at which they will do this and different algorithms that they're using, which is why at the university we're trying to come up with more standardized ones based on research and evidence as opposed to just relying on the operators to do this.
In Spain they're in the process of passing a law where the government is actually going to give the operators a set of parameters and tell them if any of the people tick these markers you have to do some sort of intervention. So it is often reliant on the operator rather than the individual in these identification cases, but often they're triggered such that they're only going to get pinged if they're really obviously displaying harms. Whereas what I would like to do is ping people earlier at the initial signs, before the problems develop. It's easy to get people back on track.
Zach: Are there any messages or phrases in particular that work better than others when you look at the pings? Like how do you decide what to actually say?
Dr. Gainsbury: That's a really good question. That's what I did my PhD on in 2010. With slot machines, we have some background building blocks of what works and what doesn't work as well. So things that work better are short messages that encourage people to think personally. So as opposed to some sort of random message, "Gamble safely," or "Think about your losses," it's encouraging people, "How much have you bet today?" or "Do you need a break?" Getting people to try and reflect, because they essentially need to be making their own decisions.
It could be a personalized notification letting people know, particularly if it's tied to a preset intention. "You said you wanted to gamble with $100, just letting you know you've gambled $80. Would you like to take a break?" So anything you can get to have people stop, think, and act in accordance with their intentions, that's where the messaging is going to be more effective. But again, it's going to have a lot of difference between different groups of people.
Zach: I imagine the messaging is a thin line to cross, because you mentioned the competitive mindset that people are in when they're gambling. If they get a message that is super negative, like "You should stop," or giving you a directive instead of reflecting, I could see myself going like, "Oh screw this. Because I got this message, I'm going to go even more now," rather than something that causes you to reflect on how much money you spent or something like that.
Dr. Gainsbury: That's right. We want to avoid fear-based messaging, judgmental messaging. It's really about non-judgmental action-focused. So don't say like "Gamble safely." What does that mean? Say, "Do you want a break?" Give people specific actions, simple actions.
We want to reduce friction. So, for example, don't send someone a message that says, "Do you want to set a deposit limit?" Send them, "Click here. We've filled out your deposit limit based on your betting history. It looks like you should bet about $100. Looks like you're betting less than $100. Click here to confirm this as your deposit limit." So something that's making it super easy for people.
At the end of the day, the easier things are for people, the more likely they are to do it. If you say to them, "We think it's $100, go find the page to set it," they're not going to do it. If you say, "Confirm," they'll confirm. Or, "We've opted in, click here if you want us to remove it." Even better. It's all about designing the system to make it as easy for people, because at the end of the day, people want to act in accordance with their intentions, but it's often just a step too far for them.
Zach: Going back to the apps versus being inside the physical casino. You made me think about the actual experience of being in the casino. And this is a total vibes-based assessment. This is not research-based obviously, but when I'm in a casino, it's obviously very stimulating. It's everything is pointing towards you placing your next bet. But when you go to a physical space, I'm also seeing the darkness of that. Like, I see the guy with the colostomy bag placing a bet on the slot machine, and I'm like, "Ooh, that is not a good place to be." So at least I have to go to a physical space.
And I know you said that the apps are not any more harmful than the physical casinos, but just based on my experience, it seems like that may take a turn sometime in the future. Cuz the apps are like, you can be on your couch and place a bet and you don't have to sit in filth. You're just by yourself. Whereas in a casino there's other markers of like, maybe I shouldn't be here right now, or I should probably leave.
Dr. Gainsbury: And I should qualify that when I'm saying the apps are not more harmful, this is kind of an average level based on research looking across apps. But there are some apps that are downright deceptive and nefarious. So we're not making an average and saying no app is less harmful than a casino, because there's so much variation. You've got casinos that are going to be bright and airy with natural light and lots of hosts and other activities, and you've got casinos that are dank and people with colostomy bags and giving you free beers all night long.
There's a lot of variation. And the same with online sites. Are you playing a poker game where there's a natural pace at it, or is it a poker game where you're allowed to multi-table on autoplay? It's the same product, arguably, but it's certainly not the same from a risk perspective.
So when we get to online, we're finding that the product is being less regulated because it's something that regulators haven't had to deal with before. You know, a poker game at a casino is kind of a poker game at a casino no matter where you go. But if you look at poker online, like I said, is it live action where you're looking at each other, or have you got avatars, or are you multi-tabling on autoplay? So we need to start getting much more nuanced into how our product is being delivered.
You might say lottery is relatively low harm. We don't have lotteries that are harmful. But if it's a lottery that's once a week and you have to physically go and buy a ticket, it's very different to a lottery that runs every 30 seconds. That's maybe not a lottery anymore! Oh, it's still a lottery draw! So it's the nature of how the product is provided. And that's where the risk level will vary substantially.
Zach: I wanted to ask you about that. The most nefarious sort of signals that gambling apps will give you to alter your attention and keep you gambling, keep you spending your money. You mentioned the time pressures, different things. Are those sort of the top cues that you see in the apps? What are the most nefarious ones that you've seen that keep people forgetting to check in with themselves?
Dr. Gainsbury: It's a really good question, and it's a very dynamic space. So I've been looking at internet gambling since 2008, and at that time I could probably list for you all the online casinos. It was relatively constrained. So it's definitely changed a lot, and it will continue to change, which is why this PhD student is looking into it. And the first thing they're going to do—working with some collaborators from Sheffield University in the UK—is do an audit and actually look at some of the major sites and what are the dark nudges, how prevalent and common are they.
So things we're looking for, one would be: is it a regulated site? We're actually going to compare regulated sites with unregulated sites, but that's something consumers should really be mindful of, because if a site's willing to break the law, then you've got to question yourself, what other laws are they going to break? So that for me would be a pretty good red flag.
And then what are the other cues? Time pressure is where you can place bets really quickly or you're given scarcity cues, "We're only going to give this promo to the first 50 people who take it up." Any signal that a casino is trying to make you make a rapid decision, that's really problematic, because that's fueling impulsive betting as opposed to intentional, considered betting. And that means they're trying to part you with your money anyway, like that's obvious, but how disassociated is the site trying to make you?
Anything where they're pushing bets to you. So if you're for example watching a football match and it's constantly saying, "Okay, bet on the next kick, bet on the next, are they going to go over the line?" Constantly throwing bets at you, but the bet disappears in 30 seconds. Again, these are specifically designed to erode decision-making. So you've got to be looking for these red flags where you're feeling a pressure to make a decision quickly, where there's some kind of limit or constraint placed upon you. Because that's really undermining any chance you have of being intentional and acting in accordance with your own preset values.
Zach: I mean that's insane. Like that's a totally predatory design. And we were comparing the gambling industry to being at a grocery store. It makes me think about instead of a grocery store, you had a liquor store. And because you had a history of purchasing there, your liquor store would text you, "Rough night? We've got a bottle waiting for you." People would recognize that immediately as a pretty messed up thing to text someone who might possibly be an alcoholic, or to send these nudges to keep someone drinking again. And it seems like we keep coming back to the place where it's like we've just accepted these things in gambling, or I don't know if it's an acceptance or we've been manipulated into accepting these things.
Dr. Gainsbury: Business practice, because there's so many... it's to me like bottled water. You buy a bottle of water, water is water typically, but they're making these claims, "Oh, this is bottled in France, or it's pure water, or it's got ionized minerals in it." It's all just water from your tap. In most parts of the world, the water is safe to drink from your tap. So they're essentially just selling you the same product.
Gambling is pretty similar. A bet's a bet. Where you bet it, the odds are pretty roughly the same. So they're trying to compete on other things, which is why you have these promotions and marketing and bonuses, and even things what we call loss leaders. "We'll get you hooked in with an easy win." The best thing ever if you have a good win when you first join us. That's perfect for the betting companies. That's a guaranteed customer. So they're happy to give you these free bets, but again, it scratches my head... it's so obvious to me that there's no free bet. No company in the world ever is giving something away for free. Like this isn't marketing. So I don't know why people think this is un- ...
Zach: Right. Like drug dealers. They give you a taste. They're like, "Yeah, the first one's free cuz I know you'll be back next weekend."
Dr. Gainsbury: 100%. And this is where also the tailored promotions: "Oh, you haven't bet in a while. Why don't you come back? We've got $50. No strings attached." Of course there's no strings attached... Oh, but then the terms and conditions are really unclear. "Well, you have to obviously match it with your own money, and obviously you can't withdraw it until you've turned it over five times, and didn't you read the fine print?" And then you kind of invest in, "Oh, well, I've already put some money in. I gotta get some more."
So muddy terms and conditions are another big red flag. But these are the things that, like you say, we've somehow accepted. People even see it as valuable. "Oh, I've got a free promotion," or "I need to bet a bit more so I reach my promotional status or get better value odds," when it's actually very much designed to lure people.
And at the end of the day, even if you go to a liquor store and you buy a six-pack or a bottle of something, at some point you could put it on the shelf. Or even if you're in the grocery store and they've convinced you to buy a 100-pack of tinned noodles, like you're probably not going to eat them, but they're still in the store. If you bet, that's it. That money is gone. It's not sitting there for you to do something else with or use it at a later point in time. And that's really the fundamental difference about gambling that we need to get across to people. That money is spent and it no longer exists. It's not sitting there waiting to maybe pay you back with a win. It's spent. It's gone.
Zach: And that's a good point. It's not just the liquor store sending you a text. It's like if the liquor store was able to make a bottle of whiskey apparate in front of you and then they go, "Buy this or it's going to be gone in 30 seconds," and then it just disappears and they're like, "Well that's it, you missed your chance," and then two hours later they would do that again. It does seem very sinister. It crosses the line for sure from just pure marketing to the darker elements that you mentioned of coercion, to the point where you're being so manipulated a normal person couldn't be held accountable to resist it. And it's getting to the point where it's so ingrained in our daily life.
Dr. Gainsbury: Well, that's a really good point and a really good question that is difficult to define research and policy-wise. It's almost, what's the subjective definition of where the line is between marketing, engaging mechanics, and coercion? And it's fairly subjective. What's acceptable marketing practice? If McDonald's can send you a promotion but a betting company can't—it's a legal company—it falls much more heavily on the regulators to really get into the nuance. And regulators might be regulators of something else, they might be new to gambling, they probably don't understand it as well as the operators. It's this cat-and-mouse game or regulatory catch-up to what the betting companies are doing. They're typically doing it as opposed to asking permission to do it, you know, doing it until someone tells them not to.
There's vague lines, and there are certainly lines... I'm sure there's somewhere saying, "Don't be coercive." I think that there's some voluntary guidelines in the US where they said something like, "You can't promise someone a win," or "Don't advertise a bet as risk-free." This isn't even in the legislation. This is a voluntary guideline that betting operators can follow: "Don't say it's risk-free." So there's so much that needs to be specified, and there's kind of murky disagreement of, "Well, that's just an engagement mechanic, that's not coercive." And there is some individual responsibility. So it's this really murky area of what are acceptable practices, and that's why we're trying to do this research to look into that. I think what you said was actually the right way of putting it: what would a reasonable person be unable to refuse? That's probably a good way of putting it.
Zach: I mean, I ask myself this question because I'm in podcasting, I think about ads and the way ads are presented, and that's a part of just the podcasting space. I think that ethical marketing is... they're always trying to manipulate you in some way to take a certain action, but I feel like I'm still in the driver's seat when I'm being marketed to. Like, I can always opt out. Now it's like there are so many examples, especially in gambling. Something that pops into my head is Sunbet is a company that was running augmented reality like winning free bets in real life using VR to go out on the street and basically collect bets like Pokémon Go, and you don't have to be 21 to do that.
And I'm like, if I was 16 years old and I'm growing up as a digital native with VR, my brain is being manipulated to not even be in the driver's seat anymore. I'm being farmed and trained to want to bet things through... not even on my phone. Now it's like real life. I'm walking around seeing things. So it does feel like that line between dark coercion and marketing, I don't even know if it exists anymore. It just feels like it's all blurring together.
Dr. Gainsbury: Yeah. And that's what we're going to try and look into and put together some taxonomies and frameworks so we can try and inform some of the policymakers internationally.
Zach: What have you thought recently about the underage exposure to wagering? At least in the US there have been stories about Roblox and kids being able to bet with Robux on the Roblox platform through third-party casinos, wagering with skins in Modern Warfare style Call of Duty games. How have you thought about the gambling companies essentially using loopholes to market wagering to kids who aren't 21?
Dr. Gainsbury: Again, if a gambling company is accepting skins or potentially even cryptocurrency or 7-Eleven cards as a form of currency, I'd put that in my red flags column as well as something to avoid in terms of legitimacy. This is happening, there's been some interesting exposés on it. It's happening in Australia, it's happening internationally.
There's a couple of different categories of it. There's loot boxes, which are considered by some to be a form of gambling themselves. This is when you are making these in-game purchases of $1, $10 for these surprise boxes where there's something in it, but you don't know if it's of value, and where you can cash those out, sell them for cash value. So that's a gambling mechanic that's within games.
There's social casino games, which is a free-play game that replicates a casino or a poker game and you get free chips, but when they run out you have to purchase more. There have been a number of lawsuits in the US around these being an illegal form of gambling because people are able to make these payments, but they don't pay out. So there hasn't been so much success on that. But that's certainly we've looked at as a stepping ground or a training ground, where people say, "I'm learning poker" or "I'm practicing."
The problem with that is, because they're just games, they're not regulated. So they have what we call inflated winning rates. They do increase people's perceived chances of winning. So they think, "I'm really good at these slot things. I should go and do it for real." And they have this inflated expectation. So that's quite problematic. And one thing that's happened is that a lot of those free-play games have actually now been purchased by real gambling manufacturers and operators. So the free-play games are actually versions of games you see in real online casinos or even land-based casinos. However, the odds aren't the same. So that's quite problematic if there is this expectation that you'll have this sort of play rate that will translate or some kind of skill improvement. There are now some rules about gambling operators not allowed to transition people directly from these free-play sites into their real money sites. But that's one potential problem.
And the third one you talk about is just outright illegal gambling where there are operators letting people play using some kind of proxy for currency, and they're placing bets so they can cash it out. That's just straight-out illegal gambling. So that's a whole another problem in and of itself.
Zach: I mean that's being onboarded in the US. I don't know if you've heard Cheddar, the app that's... they're marketing it as the TikTok of sports betting. Have you heard about that?
Dr. Gainsbury: These things are so problematic and I have to scratch my head as to why the state governments are allowing these to happen. And I certainly don't want to wade into areas that are outside of my expertise, but these ones that are so obviously proxies for gambling, I just fail to understand how these can be advertised and permitted in the ways that they seem to be. So yeah, I don't have a good answer for that.
Zach: Yeah. So it literally is a proxy for gambling. Cheddar, there's a sweepstakes loophole that at least exists in the US because it's being rolled out in 46 states. It's going to be available to people under 21 and you bet with a virtual currency, but you can use that currency to win cash-equivalent prizes. Do you have to buy the currency? I don't want to say yes or no. I'd have to look into that. Maybe I'll throw something on the screen in the YouTube version to confirm that for Cheddar. But I just know that you have a virtual currency that you can use to win prizes that have cash values, and they're marketing themselves to the TikTok of sports betting rather, where you're essentially just swiping through quick bets where you mentioned it's there for a second and it's gone. Like you have a chance to do something...
Dr. Gainsbury: That's a gambling mechanic, and that is really problematic where there are these proxies. For something to be legislated as gambling, typically it has to be a prize of real value, there has to be a chance-based element, but there does have to be a cash equivalent or something of value wagered in the first place. So that's where you get these sort of unclear areas where it's a skin, but if it's a skin that has a marketplace or an unofficial marketplace, there are these bits that get a bit murky.
But like you say, the mechanic itself is really problematic because it's exposing young people to the gambling mechanic. And if they're getting good at it or having this perception that this is fun or enjoyable, why am I going to keep playing with Cheddar? I'm going to go and get myself somewhere where I can really make some cheddar and try and transition to... and if I can't get on a legal site, then even worse I'm going to go to an offshore site, or I'm going to hack into someone's account or steal my parents' credit card or whatever it is. So it does create a real problem.
I was working on a campaign, and I think there have been some restrictions now as a result—this was years ago, sort of 2015, 2016 I was working on this—where those simulated casino games are restricted for people who are over 18. Now it's slightly problematic in that people just lie about their age on Facebook and the app stores. But at least it's giving this indication and signaling to parents, "This is restricted content."
So we do need to have whatever we can in place to try and restrict children definitely, but also ideally teens from these gambling proxies and simulators that are going to set them up. And it would work the same if you had a big win on one of these sites, particularly if there's some real money value. That could potentially have the same impact as having a big win in a real money casino. These are the sort of things that we don't know cuz it's so new, but theoretically these are definitely possibilities.
Zach: I guess I wouldn't be against having tools that expose kids to the mechanics of gambling early on so they could understand it. Like with drinking, there are parents that essentially allow their kids to have a beer at the table and then it's not like a wild thing when they get older and they're of age where they're going out of control. So I don't know if that will have a positive effect...
Dr. Gainsbury: It depends on how it's done, though. Because these games aren't set up to teach kids about an even balance of gambling. They're not designed to educate you on the mathematics. I agree, I actually do think that's really useful. I had this idea, and I worked with a student to build a mock game where it was almost like a virtual world and you're the casino operator. So it teaches them, the only way to make money is to set the game up so the customers always lose. That kind of level of educational games, obviously engaging and fun but showing them all sides of it, that's another story. But I'm pretty sure these fun games are only designed to be engaging and make it seem completely risk-free, fun, social, frivolous, and not something you need to put any thought into.
Zach: 100%. Like Roblox isn't peeling the gambling world back for kids to see the darkness. I'm more of the mind that most conspiracies can be explained by incompetence at a large scale, but it is hard to see all of the things that are happening, especially in the US right now, that are onboarding kids to wagering style things to not think like, this is just a business move to get more customers in the future. And I know it's a complete speculation, but it just feels like everything I see, it looks kid-ish. Like it looks like you're trying to attract kids to gamble. There's no other way to say it.
Dr. Gainsbury: Yeah. And it just really needs a shift in community sentiment and policy around this. I'm not saying go as far as we do towards something like tobacco, which is obviously a harmful product. There are ways that gambling can be an appropriate entertainment and part of a social life, but it just needs to be in a much more balanced, nuanced manner, and without these deceptive, coercive features. So there's a lot of aspects, which is why unfortunately we do have to design tools for individuals, because until we have these policies and systems changes, we do need to work with the individuals for them to be in control and take much stronger action because they're engaging in these sorts of products.
Zach: Do you have a big celebrity gambling culture in Australia? Like do you have a lot of your athletes or celebs partnering with gambling companies, because it's huge in the US.
Dr. Gainsbury: No, there are rules against this. If anything, we've got campaigns—from in two of the states, for example, where I am in New South Wales—where the sports athletes and the whole teams and organizations partner with the prevention office and go gamble-free and say, "Look, play the game, focus on the game, don't be distracted by the bet." So it's more common for people or for athletes to come out and say, "I had a gambling problem," and be publicly talking about what happens when this gets out of control. So we don't have this celebrity issue that you've got. It seems very much like what's happening in the US is they looked at what's happening in Australia and the UK and gone, "Ah, let's go the other way. Let's really go hard and double down on everything else."
Zach: Yeah. No, because I'm seeing more and more ads with athletes, music artists, just people who have an ability to influence millions of people with a single post, and they'll... I'm seeing more and more screenshots of bets on various different gambling apps.
Dr. Gainsbury: Influencers. Yeah.
Zach: Influencers. Yeah. And it's not apparent in the post...
Dr. Gainsbury: Yes.
Zach: ...that this person is partnered with a certain gambling app. And then I'll go and look it up and I'll be like, "Oh, Drake is sponsored by this company." And oftentimes, you just have to presume it is now.
Dr. Gainsbury: It is now. But the thing that I didn't realize is that oftentimes they're being bankrolled by the company to bet. So, not only are they being sponsored, but they're being thrown extra betting money. Like, "Here's 200k this month. Throw this on a game."
Zach: Live streamers do that on Kick a lot. And it's not super obvious. Like, the sponsorship is obvious, but it's not always obvious that they're being bankrolled by the app itself to place bets. So there's this very wild mismatch in stakes where the people you're seeing on Instagram placing bets, they're not risking their own net worth, but they're advertising you to do the same thing. I'm fine with a singer taking a gambling sponsorship, but I do think that it would make sense to disclose that you're being bankrolled for bets. It just seems like they're keeping the money, like it's a distortion because they may not be showing the losses, or if they are, they're probably not caring that much because it's not their money in the first place.
Dr. Gainsbury: So then what they're doing is depicting and normalizing, "Like, I just rolled $50,000 and I lost it. How hilarious is that?" You know, they're making that seem like that's not a big deal. And someone goes, "Oh okay, maybe I shouldn't be so upset when I lose my money. That was just so funny, haha." So it's completely distorting what's happening. And that's extremely problematic, particularly for young people who are very impressionable and who are looking up to these people. So again, in Australia there is more of a move to look at... we've got a much smaller market as well, so it's not happening to the scale it is, but looking to be more transparent on influencers, and to look into, do these need to be regulated specifically? Because it is a real area... you can regulate some form of advertising, but then there's all these gray areas that are unclear.
Zach: What is your outlook on the future of gambling harm? And obviously this will differ geographically because different places have different regulations, but are you optimistic or do you think we're screwed? Like, how do you see gambling interfacing with the world in the next 10, 20, 50 years?
Dr. Gainsbury: It's a good question. It definitely varies by jurisdiction. I just spent six months in Europe as part of a Winston Churchill fellowship, which is a really cool opportunity to travel and learn on this topic of how can we create digital harm reduction interventions for gambling. So, the UK, Spain, the Netherlands, France... looking, there's a lot of regulators who are very proactive in terms of working to focus on this harm reduction approach, looking at the products, looking at the advertising, looking from a consumer perspective of how to understand harms and really measure.
Certainly, for example, in the Nordic countries where there have been historically state-owned gambling operators and monopolies, that's been something that's been a real focus on making sure we're not doing harm. And it differs extraordinarily from places like the US where it seems like almost the reverse is, "Let's see how much money we can make on this."
So I do see hope in that sense because at some point, you know, all of these resources and this research is out there that can be imported and learned from. And there certainly are people in the US who are doing really good research and who are informing policy and policymakers, like Massachusetts is doing much more proactive efforts to focus on harm reduction. You've got really good stuff going on.
So I do think that the culture is quite important as to the individuals, and the communities essentially have to drive the concerns. If you go into Nordic countries—for example, there was an issue in Norway where the machines were getting too problematic. They took them all away. They just removed them all and installed new, sort of safer gambling machines and that was just fine. There was obviously discussion around it, but there wasn't a community uprising. In Australia similarly, gambling is very entrenched. I don't know what we're going to do about that, but there are some conversations, and the operators are seeing the conversations and starting to voluntarily put in some measures to stay ahead of regulation. Look, they're not going to be the most stringent in the world, but they're part of the conversation.
And so different jurisdictions are going in different directions. But I do think there is some movement towards consumers being aware of harm and risk. No one wants to gamble next to someone who's got a colostomy bag because they can't move from the machine. So there will be this kind of drive, but it's driven a lot by consumers themselves as to what they're willing to engage with, and the community sentiment to what the communities are going to make election issues. So that's going to be complicated obviously by everything else going on in the world. But I am optimistic. I've been working in this field, as I said, since 2004 and I've certainly seen huge changes happen in the products and the environment and the policies. So, I don't see why it wouldn't continue to be a very dynamic space.
Zach: And I also don't want to give the impression that I'm against recreational gambling. I think of gambling like smoking an occasional cigarette. Like if you can compartmentalize it to a point where it's an occasional fun thing, I don't think that's a problem. I've had fun gambling when I'm going to bachelor parties. I think of it as I'm hanging out with my friends. I'm lucky enough for it not to have been a problem in my life. It's been a fun social experience for me.
I just, being in the US and being I guess more aware than the average person of the advertising space, because I do pay attention in podcasting, I see certain shifts with advertisements that look like they're focused at kids, or the Robinhood app offering sports prediction markets. You mentioned compound interest before. I'm investing my money, and all of a sudden I have the opportunity to, instead of investing it in a stock, I'm going to wager it on a sports future bet. You'll see the same celebrities in the United States advertising a financial literacy program, and then also you'll see them appear on a DraftKings advertisement. And I'm just like, it feels like it's in a weird space, like we're in a very weird place where things can get out of control in the US. And I also think that recreational gambling in a non-harmful way is fine. So I just wanted to make that clear as we start to end off. Like I'm not against it. It just feels very weird right now in America.
Dr. Gainsbury: Yeah.
Zach: How do you think, to end off, how do you think AI will interface with gambling harm? Like, do you see that being an advantage for reducing gambling harm? Do you think casinos will use that to get over on human gamblers? How do you think that's going to play out with AI?
Dr. Gainsbury: Good question. And it is very timely. I actually have to give a talk on this in a couple of weeks' time. So, you're good to prompt me on my thinking on it. And I guess I'm sort of hesitating to put the talk together at the moment because I feel like it changes every week.
First thing that we're using AI for would be, as I mentioned, these algorithms that are based on machine learning. We've worked with an operator where we've got their customer data and we've worked on machine learning approaches to identify people who are having harms against people who don't have harms. So that's something, then we've developed these risk indicators that we can look at, and we can give these to operators. We're going to publish them so they're widely available for free, so that we can then have other operators start to identify people who are experiencing harm in their own customer bases. So that's one really useful thing, and that is going on in various places. I mentioned the Spanish government has done a similar thing.
The tricky part is the training data. In Spain they've used treatment data, which is problematic because people who are in treatment are not representative of the broader population of people who gamble, because less than 10% of people tend to get harmed. So the tricky part is getting an appropriate training data set and making sure you're detecting the right people and you're not missing too many people. And where do you set that line varies on what you do when you ping these people. Do you cut them off? Do you give them a phone call? Do you send them a message? So we have to be careful around where we set those parameters, but that's one use of AI.
Another conversation obviously is operators using AI for marketing and segmenting and offering promotions and bonuses. But I won't get into that too much, but we are very aware that that's happening, so people have to be mindful of what information they make available to operators.
We're using AI potentially for treatment. People are already using their LLMs, you know, ChatGPT and Gemini, for counseling, to talk about their personal problems. Which can be okay. There's some research out of UNLV actually has an AI-focused gambling research lab going on, which is really exciting. So they're looking at, are these models appropriate? And there are definitely some problems with them.
Another problem would be if someone tries to go to an LLM and say, "Tell me which bet to place." Because these things are just designed to tell you whatever you want. And they're going to try and please you. So it's problematic if the LLM... you know, people are using it to analyze stats or something to inform bets that would probably fuel excessive gambling. So we need to be really careful in that approach, and I would caution people against that as well.
But I have seen some teams who are creating AI-based gambling counseling chat. So if you can't access an in-person or an actual real-life counselor, these gambling apps have been developed with gambling-specific content to act as counselors and to be ring-fenced to hopefully avoid any problematic suggestions. So that's again another really helpful trend, whereas there is a difficulty accessing treatment in some jurisdictions, that these will be available 24/7 for people to chat with in a similar way as a person. So there's a few different ways that are being developed. We need to be really careful around ethical principles and data security and also data equity. But I think that there's, from an intervention point of view, some really positive options.
Zach: Well, Dr. Sally Gainsbury, thank you so much for joining me. Where can people follow you, keep up with your work? I'll link all this where people are listening and watching.
Dr. Gainsbury: Yeah. No, definitely LinkedIn. I always post all of my papers, thoughts, presentations, things on that. Dr. Sal Gainsbury or Sally Gainsbury, that's the main source. Also at the University of Sydney, there is a gambling research page. But LinkedIn is probably the best way and anyone can get in touch with me and send me a message as well. My email address is also available on the University of Sydney site. So very happy to engage with anyone who wants to learn a little bit more.
Zach: Well, thank you so much for the chat and the great preview of your AI talk coming up soon. I appreciate it.
Dr. Gainsbury: Thanks so much, Zach. It's a pleasure.