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Bonus bawl: Are online gambling promotions socially responsible?

Many online gaming sites use a wide variety of promotions as a way of attracting new clientele and/or as a way of generating repeat patronage. Such promotions include welcome bonuses, initial deposit bonuses, retention bonuses, re-activation of account bonuses, and VIP bonuses. Here are a few I have come across online:

  • Players receive a 10% cash bonus on an initial deposit of $20 or more (however, the bonus and deposit combined must have a 15 times rollover. A ‘rollover’ refers to the amount of times an online gambler must wager a certain amount during a promotion)
  • Players receive a 100% match-up bonus on deposits (up to $225) (however, the bonus and deposit combined must have a 12 times rollover)
  • Players receive $100 free on initial deposit (however, the bonus and deposit combined must have a 20 times rollover)
  • Players receive 100% deposit bonus of up to $200 (however, the bonus and deposit combined must have a 40 times rollover)
  • Players receive 100% first deposit bonus up to £50 in free chips and players must deposit a minimum of £10 (however, bonus must have a 15 times rollover)

The issue here is to what extent the use of promotional ‘hooks’ to generate new custom or maintain repeat patronage can be regarded as a socially responsible strategy. Previous writings about advertising and marketing from a social responsibility perspective have noted that it is entirely appropriate for the gaming industry to advertise and market their products as long as it conforms to the relevant codes of compliance, is fact-based, does not oversell winning, and is not aimed at (or feature) minors.

Dr. Jonathan Parke and I have noted that in gambling there is a fine line between customer enhancement and customer exploitation particularly when it comes to facilitating new clientele and repeat patronage. Given the political sensitivities around the liberalization of gambling, the perception of what others think about a particular practice are sometimes given more weight than what it actually means in practice. However, irrespective of whether something is introduced in a socially responsible way and/or introduced into an environment with an embedded socially responsible infrastructure, there is always the possibility of a ‘PR own goal’ that may do more financial damage in the long run to the online gaming operator.

Given there is little empirical research on the effect of bonuses on vulnerable and susceptible gamblers, the implications relating to social responsibility are, at best, speculative. There are some academic writings on the use of bonus promotions in offline gambling environments but these are based on observational anecdotes rather than empirical research. For instance, Dr. Parke and I noted that the frequency of bonuses in offline gambling environments varies (depending the establishment) but can occur hourly, daily, weekly, or seasonally. We reported that such bonuses are often used to entice the consumer in several retail environments. What make them especially appealing in a gambling environment are the obvious similarities of the structural characteristics of such bonuses and gambling events in general (e.g., risk, uncertainty, interval-ratio reinforcement etc.). Furthermore, the appeal is strengthened since gamblers feel they are “getting something for nothing”.

We also distinguished between two fundamentally different forms of bonus – the ‘general bonus’ and the ‘proportional bonus’. These different types of bonus may have different implications in terms of social responsibility. General bonuses are those offers that are provided irrespective of the type of player (e.g., an occasional gambler is as equally entitled to the bonus as a ‘heavy’ gambler). Proportional bonuses are those offers that depend on how long and/or frequently the player gambles with a particular gaming establishment. This means that ‘heavy’ gamblers would receive disproportionately more bonuses than an irregular player. Given that a significant proportion of the ‘heaviest’ gamblers (sometimes referred to as ‘VIP gamblers’) may be problem gamblers, it raises questions whether rewarding people the more they spend is the most socially responsible strategy.

In relation to the use of promotional bonuses, there are two basic issues that arise. The first one is whether bonuses should be offered by online gaming companies if they are perceived by some to be ideologically incompatible with being socially responsible. The second is whether some types of bonus are less socially responsible than others. In the absence of empirical evidence, it could be argued that general bonuses that target potential adult online gamblers irrespective of play frequency and/or type, are acceptable within online gaming environments that have a good social responsibility infrastructure. However, bonuses that reward the biggest spenders could be argued to be much less socially responsible. Although this model is well accepted in most commercial environments (i.e., loyalty reward schemes), gambling is a commercial activity that can result in problems for the heaviest gamblers.

Applying these views to promotional bonuses in online gaming environments would mean that some bonuses appear generally acceptable from a social responsibility perspective (e.g., a $10 tokens, 100% welcome bonuses, and possibly re-activation offers) whereas others may be considered less socially responsible and potentially exploitative (e.g., retention offers, VIP offers). It may be the case that other socially responsible measures implemented by an online gaming company (such as the use of a behavioural tracking tool like mentor and PlayScan) may help mitigate the potential exploitation of problem gamblers, however, empirical research is needed to confirm such speculation.

Dr Mark Griffiths, Professor of Gambling Studies, International Gaming Research Unit, Nottingham Trent University, Nottingham, UK

Further reading

Griffiths, M.D. (2001). Good practice in the gaming industry: Some thoughts and recommendations. Panorama (European State Lotteries and Toto Association), 7, 10-11.

Griffiths, M.D. (2005).  Does advertising of gambling increase gambling addiction? International Journal of Mental Health and Addiction, 3(2), 15-25.

Griffiths, M.D. (2008). ‘Foot in the door’: Player enhancement or player exploitation? World Online Gambling Law Report, 7 (7), 15-16.

Griffiths, M.D. (2012). Internet gambling, player protection and social responsibility. In R. Williams, R. Wood & J. Parke (Ed.), Routledge Handbook of Internet Gambling (pp.227-249). London: Routledge.

Griffiths, M.D. & Parke, J. (2002). The social impact of internet gambling. Social Science Computer Review, 20, 312-320.

Griffiths, M.D. & Parke, J. (2003). The environmental psychology of gambling. In G. Reith (Ed.), Gambling: Who wins? Who Loses? pp. 277-292. New York: Prometheus Books.

Griffiths, M.D., Wood, R.T.A. & Parke, J. (2009). Social responsibility tools in online gambling: A survey of attitudes and behaviour among Internet gamblers. CyberPsychology and Behavior, 12, 413-421.

Gambling online, social responsibility and ‘foot-in the-door’ practices

Bill Gates arrives at the port to heaven and hell. Petrus says “You see Bill, we don’t know what to do with you. You may choose heaven or hell”. Bill peeks in heaven and sees a couple of old boring men sitting around at a table. Bill takes a look in hell and sees really beautiful women, sex, drugs, rock and roll, and most of all, gambling. Bill says “I am a gambling man, I want to go to hell!” Once in hell, Bill is immediately thrown into the fire. Bill says “Hey, what the hell is this, I saw all the gambling, women, and sex?” The devil says ‘That was just a demo version.”

Hopefully this opening joke highlights that online gamblers need to be aware that commercial operators often use subtle psychological ploys to get them to part with their money. For the online gambling industry, it also raises issues around social responsibility and the extent to which operators should be using such tactics.

One of the most common ways that gamblers can be facilitated to gamble online is when they try out games in the ‘demo’, ‘practice’ or ‘free play’ mode. At one level, most would argue that playing for points rather than money is little more than innocuous fun and ‘good value’ to the player. Furthermore, playing games for free online is akin to ‘skill schools’ that exist offline, such as learning poker or blackjack in a casino. Offline, there are many constraints to ‘learning to play’ as the free opportunities may only be available on certain days and at certain times. On internet gambling sites there is a lot of scope for players to practice games for free before they play with real money. However, gaming operators need to realise that in terms of their social responsibility, games – even the ‘demo’ versions – need to be fair to players. Despite the undoubted positives, there are other not so positive aspects that have been identified in the scientific literature.

The use of ‘greater than chance’ win probabilities during ‘demo’ games is one example of the many tried and tested psychological ‘foot-in-the-door’ techniques used widely in the commercial sector. Some research carried out by psychologists at the University of Laval in Canada showed it was significantly more commonplace to win while ‘gambling’ on the first few goes on a ‘demo’ or ‘free play’ game. They also reported that it was commonplace for gamblers to have extended winning streaks during prolonged periods while playing the ‘demo’ version. Obviously, once gamblers to play for real, the odds of winning may be considerably reduced. Related to this are the urban myths that develop around online gambling. For instance, a very common myth is that a gambler’s first bet after opening an online account is very often a winning one.

There is now a growing number of studies highlighting that playing for free online is popular among teenagers. ‘Money free’ gambling appears to play an important role for adolescents in conceptualising and experiencing Internet gambling. In the 2009 British study of gambling among nearly 9000 adolescents aged 11-to 15-years, Ipsos MORI reported that just over a quarter of them had played in ‘money-free mode’ on internet sites in the week preceding the survey. Further analysis of these data by researchers at Salford University showed that gambling in the money-free mode was the single most important predictor of whether the child had gambled for money, and one of the most important predictors of children’s problem gambling. However, the possibility and extent to which money-free gambling is responsible for real gambling participation and gambling-related risk and harm needs further research.

Dr Mark Griffiths, Professor of Gambling Studies, International Gaming Research Unit, Nottingham Trent University, Nottingham, UK

Further reading

Forrest, D. K, McHale, I  & Parke, J. (2009). Appendix 5: Full report of statistical regression analysis. In Ipsos MORI (2009)British Survey of Children, the National Lottery and  Gambling 2008-09: Report of a quantitative survey. London: National Lottery Commission.

Griffiths, M.D. & Parke, J. (2010). Adolescent gambling on the Internet: A review. International Journal of Adolescent Medicine and Health, 22, 59-75.

King, D.L., Delfabbro, P.H. & Griffiths, M.D. (2010). The convergence of gambling and digital media: Implications for gambling in young people. Journal of Gambling Studies, 26, 175-187.

Sevigny, S., Cloutier, M., Pelletier, M. & Ladouceur, R. (2005). Internet gambling: Misleading payout rates during the “demo” period. Computers In Human Behavior, 21, 153-158.

 

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