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Nag, nag, nag: The psychology of horse-race betting

All forms of gambling lie on a luckskill dimension. Neither games of pure skill nor games of pure chance are particularly attractive to serious gamblers. Games of chance (like lotteries) offer no significant edge to serious gamblers and are unlikely to be gambled upon. While games of skill provide a significant edge for the gambler, serious gamblers need more than an edge – they need an opponent who can be exploited. Serious gamblers gravitate towards types of gambling that provide an appropriate mix of chance and skill. This is one of the reasons why sports betting – and in particular horse-race betting – is so popular for gamblers. In the most recent British Gambling Prevalence Survey published in 2011, the results indicated that betting on horse-races in the past year had slightly decreased to 16% (down from 17% in the 2007 survey) with men (21%) being more likely than women (13%) to have bet on horse-races. The survey also showed that 7% of the sample had gambled on horse-races in the past week. The survey also indicated that horse-race bettors were more likely to be classed as ‘high spenders’ compared to most other types of gambler.

The edge available in horse-race gambling can be sufficient to fully support professional gamblers as they bring their wide range of knowledge to the activity. There is the complex interplay of factors that contributes to the final outcome of the race. There is the form of the horse, the length of the race, the reputation of the jockey, trainer and stable, breeding, weight, the conditions of the racetrack, etc. From this mix of information the horse-race bettor will, broadly speaking, do one of two things. Either they try to select a winner, or they try to select a horse that offers the best odds in terms of its true chances. Assessing these odds (i.e., handicapping), is done by developing ratings based on the available information. Precisely how all these factors can be combined to select a horse is a matter about which most gamblers disagree, but it is reasonable to assume that many punters believe that their knowledge of these factors gives them an edge over other punters that they are competing against.

Individuals clearly differ in how they use complex information to select horses. There has been some interesting research on the psychology of handicapping particularly in whether good handicappers are more intelligent. For instance, American psychologists, Dr. Steve Ceci and Dr. Jeffrey Liker studied a group of experienced horse-race gamblers all of who had been serious gamblers for over eight years and who attended racetracks most days. In a paper that had published in the Journal of Experimental Psychology, they divided the gamblers into experts and non-experts on the basis of predicting the favourite and the rank order according to odds of the three most favoured horses. Expert gamblers were those who correctly picked the favourite in at least nine out of ten races and correctly picked the top three horses in rank order in at least five out of ten races. In contrast, the best of the non-experts correctly identified the favourite in only five out of ten races, and selected the top three in only two of the ten races. The two groups were then given a number of intelligence quotient (IQ) tests. Ceci and Liker predicted that the experts would have higher IQs on the basis of their handicapping ability but was very surprised to find no difference at all between the two groups’ intelligence levels.

When the psychologists did some follow-up interviewing, they found that one of the best handicappers was a construction worker with a low IQ (of 85). He managed to pick the top horse in terms of post-time odds 100% of the time and picked the top three horses in correct order in five out of ten races. They also highlighted the case of a high IQ lawyer who picked the top horse only 30% of the time and got the rank ordering of the top three horses correct only once. One of the things concluded was that there is probably more than one type of intelligence and that the IQ test that was used may not have measured the types of skill needed in the handicapping of horses. At least Ceci and Liker’s findings give some hope to us all!

Psychologists have also shown that gamblers (including those who bet on horse racing) can be very biased in their thinking. The occasional punter expects to lose but this isn’t the case for serious gamblers. Each bet is part of a pattern of bets that the gambler expects to yield a positive return overall. To the gambler, winning bets confirm that their system is successful. However, losing bets do not convince gamblers that their system is a failure. Gamblers may explain losing bets as an error in implementing their system or to factors beyond their control. In essence, (and as I have shown in some of my own research studies) many gamblers attribute wins to their skilful gambling but explain away losses as something due to external factors or the environment that they gamble in. On a psychological level, the serious gambler is able to maintain their belief that they have a winning system despite mounting losses through biased evaluations of the outcomes. Since winning is central to the gambler’s self-concept and self-esteem, they cannot quit while losing as this would invalidate the core of the self-concept and initiate intense negative effects (such as depression).

Although horse-race gamblers treat their pastime as a skilful activity, it has been estimated that at least 40% of the relevant information that determines the winner of a race is not accessible to any gamblers. Furthermore, despite years of practice, frequent gamblers may still be very poor at assessing the chances of different horses.

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

Further reading

Ceci, S. J., & Liker, J. K. (1986). A day at the races: A study of IQ, expertise, and cognitive complexity. Journal of Experimental Psychology: General, 115, 255-266.

Griffiths, M.D. (1994). The role of cognitive bias and skill in fruit machine gambling. British Journal of Psychology, 85, 351-369.

Griffiths, M.D. (2010). The psychology of sports betting: What should affiliates know? i-Gaming Business Affiliate, August/September, 46-47.

Griffiths, M.D. (2011). Mobile sportsbetting: A view from the social sciences. i-Gaming Business, 69, 64-65.

Parke, A., Griffiths, M.D. & Irwing, P. (2004). Personality traits in pathological gambling: Sensation seeking, deferment of gratification and competitiveness as risk factors, Addiction Research and Theory, 12, 201-212.

Parke, J., Griffiths, M.D. & Parke, A. (2007). Positive thinking among slot machine gamblers: A case of maladaptive coping? International Journal of Mental Health and Addiction, 5, 39-52.

Wardle, H., Moody, A., Spence, S., Orford, J., Volberg, R., Jotangia, D., Griffiths, M., Hussey, D. & Dobbie, F. (2011). British Gambling Prevalence Survey 2010. London: The Stationery Office.

Wardle, H., Sproston, K., Orford, J., Erens, B., Griffiths, M.D., Constantine, R. & Pigott, S. (2007). The British Gambling Prevalence Survey 2007. London: The Stationery Office

The beliefs are falling: The illusion of control in gambling

For the professional gambler, being in control of the situation is paramount. However, one of the psychological ploys that the gaming industry likes to exploit is the fact that gamblers often perceive they have more control than they have in actuality. Probably one of the most single influential contributions to the psychology of gambling was Ellen Langer’s series of experiments on the illusion of control in the 1970s. Her theories were based on the observations that some people treat chance events as controllable. For instance, it isn’t uncommon for dealers and croupiers who experience runs of bad luck to lose their job. Back in the 1960s, sociologists studying craps players noticed those throwing the dice behaved as if they were controlling the outcome of the toss. Typically, craps players threw the dice softly for low numbers and hard for high numbers. In a follow-up experimental investigation, psychologists showed that when playing with dice, people bet less money and were less confident if asked to bet after someone else had thrown the dice rather than throwing it themselves, even though the probability of success was the same in both situations. Ellen Langer argued that these behaviours are totally rational if gamblers believed their game was a game of skill.

The “illusion of control” was defined by Langer as being “an expectancy of a personal success inappropriately higher than the objective probability would warrant.” Put simply, gamblers think they have more chance of winning than they actually do. She tested for this in a series of experimental studies that supported her original idea (that under some circumstances, gamblers will produce skill orientations towards chance events). Langer’s experiments convincingly showed that players bet more when playing cards against a ‘nervous’ competitor than against a ‘confident’ one. She also demonstrated that players would sell previously bought lottery tickets for a higher price if they had picked the numbers themselves as opposed to having them picked by someone else. Her other groundbreaking experiments showed that certain factors such as the nature of the competition, the familiarity of the task, and the degree of personal involvement influence the belief that skill is a controlling force, stimulates the illusion of control, and produces skill orientations. In a later study involving the prediction of ‘heads’ or ‘tails’ after a coin was tossed, she also showed that early wins during chance games induced a skill orientation even though the activity was totally chance determined.

Many regular gamblers (such as roulette players) passionately believe their game is skill-based, and offer explanations of why they failed to win when their number doesn’t come up. Such beliefs have been tested experimentally by US psychologist Thomas Gilovich in a study of the biased evaluations in gambling behaviour. In three studies using people who bet on football games, Gilovich demonstrated that gamblers transformed their losses into ‘near wins‘. Gamblers pinpointed random or ‘fluke’ events that contributed to a loss but were unaffected by identical events that contributed to a win. I’m sure you can all think of instances like this when watching football. When your team loses, it’s not uncommon to berate the referee for a dodgy penalty decision or deride the linesman because he failed to spot an offside. You may end up blaming your team’s loss on one particular event. Had your team won with the dodgy decision going your team’s way, you would probably rationalise it and say your team would have won anyway because of their superior playing ability and skill. Gilovich also reported that gamblers spent more time discussing their losses and discounting them. For example, after a loss, a lot of time may be spent analysing a small incident of a few seconds duration even though the game lasted 90 minutes. What’s more, we make ourselves feel better by blaming the loss on something or someone external. Interestingly, exactly the same effects have been found in gambling activities in which losses could not easily be explained away (such as Gilovich’s experiments using computerised bingo gambling).

Many psychologists have consistently highlighted the irrational perceptions people produce while gambling. Many studies have evaluated the cognitive activities of gamblers while they play on slot machines or roulette using the ‘thinking aloud’ method. This basically involves getting gamblers to think aloud while they are gambling. Typical results have shown that erroneous and irrational perceptions of the gambling activity far outnumber the logical and rational perceptions. In these situations, gamblers attribute their success to personal factors such as skill whereas external factors (like bad luck) account for losses. For instance, in my own research on slot machine gamblers, I found that when slots players were winning they would attribute their success to their playing strategy and skill. When they lost it was because of something external in the gambling environment. For example, someone had put them off by talking to them or watching them while gambling. Similar findings have reproduced by psychological experiments in Canada, Australia and the USA (including some of my own). The illusion of control is just one of the many ways in which a gambler distorts the perceptions of their gambling. These are sufficient enough to show that psychological factors can influence the way in which people gamble and continue to gamble.

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

Further reading

Coventry, K. & Norman, A. (1998). Arousal, erroneous verbalizations and the illusion of control during a computer generated task. British Journal of Psychology, 89, 629-645.

Gilovich, T. (1983). Biased evaluation and persistence in gambling. Journal of Personality and Social Psychology, 44, 1110-1126.

Gilovich, T. & Douglas, C. (1986). Biased evaluations of randomly determined gambling outcomes. Journal of Experimental Social Psychology, 22, 228-241.

Griffiths, M.D. (1994). The role of cognitive bias and skill in fruit machine gambling. British Journal of Psychology, 85, 351-369.

Griffiths, M.D. (2011). Gambling, luck and superstition: A brief psychological overview. Casino and Gaming International, 7(2), 75-80.

Griffiths, M.D. (2013). Is ‘loss of control’ always a consequence of addiction? Frontiers in Psychiatry, 4, 36. doi: 10.3389/fpsyt.2013.00036

Griffiths, M.D. & Wood, R.T.A. (2001). The psychology of lottery gambling. International Gambling Studies, 1, 27-44.

Henslin, J. (1967) Craps and magic. American Journal of Sociology, 73, 316-330.

Langer, E. J. (1975). The illusion of control. Journal of Personality and Social Psychology, 32, 311-328.

Langer, E.J. & Roth, J. (1975). The effect of sequence outcome in a chance task on the illusion of control. Journal of Personality and Social Psychology, 32, 951-955.

Rogers, P. (1988). The cognitive psychology of lottery gambling: a theoretical review. Journal of Gambling Studies, 14, 111-134.

Rogers, P. & Webley, P. (2001). It could be us! Cognitive and social psychological factors in UK National Lottery play. Applied Psychology: An International Review, 50, 181-199.

Taylor, S. E. (1989). Positive illusions: Creative self-deception and the healthy mind. New York: Basic Books.

Wagenaar, W. A. (1988). Paradoxes in Gambling Behaviour. London: Erlbaum.