Financial inducements in gambling marketing: An information disclosure proposal to inform gamblers of their true economic value

Abstract

Financial inducements such as free bets are frequently-used gambling marketing offers which temporarily improve a gambler’s usual pattern of risk and potential return. Previous research has shown that there are up to 15 distinct types of financial inducements in common use, and that gamblers frequently misunderstand inducements’ play-through requirements and other complex terms and conditions. The Australian government has therefore recently banned play-through requirements for inducements shown to new customers, and the Great British regulator the Gambling Commission is considering similar consumer protection approaches. The present work describes an alternative and yet potentially complementary approach based on disclosing financial inducements’ true economic value to gamblers. This approach can be motivated by the fact that financial inducements are not intrinsically harmful, and an understanding of their value has been exploited for profit by some gamblers via techniques called “bonus hunting” and “matched betting”. Disclosure-based approaches can be designed to reflect the average losses implied by any play-through requirements, as well as any other terms and conditions which affect their economic value. Disclosure-based approaches for protecting consumers from the potential harms of financial inducements should be subject tofurther research and policy consideration.