“Cash Out lets you take profit early if your bet is coming in, or get some of your stake back if your bet is going against you – all before the event you’re betting on is over. Cash Out offers are made in real time on your current bets, based on live market prices. Whenever you are ready to Cash Out, simply hit the yellow button. Cash out is available on singles and multiples, on a wide range of sports, including football, tennis, horse racing, and many more! You can Cash Out of bets pre-play, in-play, and between legs” (Definition of ‘cash out’ betting on Betfair website, 2017).
Most European sports betting operators now feature ‘cash out’ functionalities in their online platforms. This means that bettors can withdraw their bets before the event bet upon has concluded, obtaining a smaller but guaranteed return if the outcome of the bet is going their way, or, conversely, cutting down the monetary impact of a foreseeable loss. The ‘cash out’ functionality has rapidly become popular among sports bettors that bet in-play (i.e., during the game on things such as soccer matches and horse races) as a way of maximising value on the bets they have made.
Industry voices such as David O’Reilly, from Colossus Bets, have identified four major benefits of cash out features for bookmakers: (i) reducing the volatility of the operator’s revenue; (ii) increasing the recycling of player returns, with more players banking smaller amounts; (iii) enabling players to avoid their ‘near miss’ frustration; and (iv) improving the player engagement with the platform by introducing a mechanism that promotes constant checking. However, for sports bettors, cashing out strategies might typically involve cutting down the profit while being ahead but rarely reducing the loss when going behind. In this regard, cashing out does not appear to differ greatly from other new internet-based betting forms (e.g. so-called ‘exotic’ or multiple bets), which have been found to possess, in general, higher expected losses for gamblers and greater profit margins for operators.
However, beyond the feature’s financial rationale, cash out affects the nature of sports betting in more meaningful ways. It is, arguably, a game-changer, that leads (along with other features such as ‘edit my acca’ features in which specific bets can be removed from ‘accumulator’ bets) to the transformation of sports betting from a discontinuous to a continuous form of gambling. Here, our contention is that cash out is a key component of the contemporary bettor-bookmaker interaction, and that the widespread adoption by devoted sports bettors merits a closer look into the implications of such an interaction from a problem gambling perspective. Such an examination also suggests that regulators and policymakers need to think about how to protect gambling consumers from the potential harm caused by this new type of betting.
Structural characteristics have been proposed as a determining factor that can influence problem gambling behaviour. Structural characteristics are those associated with the design of a gambling product that shape the way gamblers interact with it. Typical structural characteristics include, but are not limited to, bet frequency, bet duration, event frequency, near misses, stake size, jackpot size, probability of winning, and interface design (e.g., the use of music and colour stimuli in the design of slot machines).
The internet has altered significantly the structural characteristics of gambling and sports betting more specifically. For example, in a number of European countries, the football (soccer) pools used to comprise bets placed during a weekday on the outcome of a game played typically on a Saturday or Sunday (i.e., a once a week wager). This reward delay was a major protective factor against excessive gambling, which on a psychobiological level has been theorised as an imbalance in an individual’s dopamine receptors, and therefore, highly sensitive to shorter bet reward periods. Betting via the internet has reduced such delays in receiving rewards from gambling, thus modifying a major structural characteristic of betting from once a week to (in some instances) every few minutes.
In parallel to the increased uptake of Internet betting in many jurisdictions, a second dynamic, namely globalisation, has further widened the possibilities of betting across countries, sports, and time zones, ultimately transforming sports betting into a 24/7 activity where the bookmaker never closes the shop any day during the year. For the first time, if a gambler has a craving to bet, the market is able to respond to that demand anytime and anywhere via a range of Wi-Fi enabled portable devices (e.g., smartphone, tablets, laptops, etc.). Virtual sports have expanded the availability of betting options even more, eliminating the need to bet on real world sport events.
Although the time between bets (i.e., bet frequency) was effectively reduced to near zero, the time within bets (i.e., bet duration) changed little until cash out functionality was first introduced by the gaming operator William Hill in December 2012. With cash out features, sports betting has become a potentially continuous gambling activity, one that resembles the playing mechanics the stock market. As with investing in stocks, bet values in in-play sports betting are re-calculated seamlessly. The outcome of a sport event might not be as relevant for many bettors as the value their bet will acquire in the next few seconds, even if that bet turns out to be erroneous at the end of the game. As in stock market investing, betting becomes continuous because non-actions also qualify as actions in themselves. Every single second that a bettor decides not to cash out, a new bet takes place. Eventually, cash out features introduce the notion that it is the bet itself the commodity that is being traded in the sports betting market. This new continuous type of sports betting raises questions concerning the gambling-related harm that could be associated with it. It also suggests that the kinds of regulation found widely in the stock market investment sector might have some utility if applied to this new form of gambling.
From a marketing perspective, cash out functionality is often advertised as a control-enhancing mechanism for bettors. Given that cashing out is typically presented in television advertisements as a risk-free operation, the product is likely to be perceived as reimbursable if the client is not happy with it, arguably promoting less planned gambling behaviours. Some gaming operators use the alternative name of “edit my bet” to refer to cash out, focusing on the capacity of bettors to correct later possible errors of judgement. The problem is that (and as happens in stock market investing), cashing out is only possible at the current value of the stock (which may be inferior to the purchasing price). Additionally, and contrary to what happens in stock market investing, betting operators automatically devalue the bet price immediately after the purchase. For example, a bookmaker will typically offer to cash out for $0.95 or similar a $1 bet placed one second ago, a price devaluation unmotivated by any new information or event actually affecting the predicted value of such a bet.
Beyond its most apparent attributes, we have demonstrated that cash out within in-play gambling is a pivotal feature that has been introduced by the sports betting industry to transform sports betting from what was traditionally a discontinuous form of gambling into a continuous one. It is contended that, although cashing out presupposes more engaged gamblers that feel more in control of their bets, the emotionally charged context in which it is often used and the structural attributes of the product itself might actually make some bettors lose control over their gambling wagers. Consequently, gambling policymakers and regulators should be cognizant of the challenges of this transformation of sports betting and consider the implications for the protection of gambling consumers.
[Note: This article was co-written with Dr. Hibai Lopez-Gonzalez]
Dr. Mark Griffiths, Professor of Behavioural Addiction, International Gaming Research Unit, Nottingham Trent University, Nottingham, UK
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A nine-year old boy walks into a shop and buys a packet of potato chips. An eight-year old girl walks into the same shop and buys a chocolate bar. Nothing particularly unusual except this particular packet of potato chips poses the question “Is there a spicy £100,000 inside?” in big letters on the front of the packet with the added rider “1000’s of real £5 notes to be won!” The bar of chocolate offers “£1 million in cash prizes – win instantly. Look inside to see if your a winner!!”. The boy opens up the bag of crisps but it contains nothing but crisps. He is very disappointed. The little girl opens up the chocolate bar and sees the all to familiar phrase “Sorry. You haven’t won this time but keep trying. Remember there’s £1 million in cash prizes to be won”. She too is very disappointed. Both of them decide to buy the product again to see if their luck will change. It doesn’t. This time a different chocolate bar says “Sorry this is not a winning bar. Better luck next time!” The most they are likely to win is another packet of crisps or some more chocolates.
This scenario describes a typical instant win product (whereby a consumer buys a particular product with the chance of instantly winning something else of financial value). This type of instant-win marketing has been around for some time and is not particularly new but it is the younger generation that is being targeted. In a different environment, it could be argued that these two children are “chasing” their losses in the same way a gambler chases theirs. All over the world, this type of marketing is becoming more prevalent with big multi-national companies also employing its use to increase sales (e.g., MacDonalds).
In gambling situations after losing money, gamblers often gamble again straight away or return another day in order to get even. This is commonly referred to as “chasing” losses. Chasing is symptomatic of problem gambling and is often characterized by unrealistic optimism on the gambler’s part. All bets are made in an effort to recoup their losses. The result is that instead of “cutting their losses” gamblers get deeper into debt pre-occupying themselves with gambling, determined that a big win will repay their loans and solve all their problems. Although not on this scale, the scenario outlined above appears to be a chasing-like experience akin to that found in gambling. To children, this type of behaviour appears to be a gambling-type experience and is similar to other gambling pre-cursors that I have highlighted in some of my papers such as the playing of marbles, card flipping, and sports card playing. For instance, in sports card playing, it is not uncommon for adolescents to keep buying packs of cards to get their favorite baseball or football star. Products like crisps and chocolate are popular and appeal not only to the young but to adults too. However, the fact that such promotions are often coupled with the appearance of teenage idols (e.g., famous pop groups or top soccer sporting heroes) suggests that it is younger people that are being aimed for.
Manufacturers of instant-win products claim that people buy their products because customers want them. They further claim that the appeal of a promotion is secondary to the appeal of the product. This may well be true with most people but instant-win promotions obviously increase sales otherwise so many companies would not resort to it in the first place. It would appear that most people have no problem on moral (or other) grounds with companies who use this type of promotion. However, there are those (such as those who work in the area of youth gambling) who wonder whether this type of promotion exploits the vulnerable in some way (i.e., children and adolescents). The question to ask is whether young children and adolescents are actually engaging in a form of gambling by buying these types of products.
Gambling is normally defined as the staking of money (or something of financial value) on the uncertain outcome of a future event. Technically, instant-win promotions are not a form of gambling. This is because (by law) manufacturers are required to state that “no purchase is necessary”. This whole practice it is little more than a lottery except that in very small letters at the bottom of the packet there is the added phrase “No purchase necessary – see back for details”. However, very few people would know this unless they bought the product in the first place, and secondly, the likelihood is that a vast majority will not do this anyway – particularly children and adolescents.
The small print usually reads “No purchase necessary. Should you wish to enter this promotion without purchasing a promotional pack, please send your name and address clearly printed on a plain piece of paper. If you are under 18, please ask a parent or guardian to sign your entry. An independently supervised draw will be made on your behalf, and should you be a winner, a prize will be sent to you within 28 days”. I have tried writing to companies to ascertain how many people utilize this route but (to date) I have been unsuccessful in gaining any further information. It is highly likely that very few people write to the companies concerned. There is a high likelihood that the companies in question have the empirical evidence but unfortunately it is not in the public domain. If it is assumed that the number of people who actually write to the companies for their names to be put into an independently supervised draw is very low, it can be argued that to all intents and purposes that people who buy such products are engaged in a form of gambling.
Since the introduction of the UK National Lottery and instant scratchcards in the mid-1990s, a “something-for-nothing” culture appears to have developed where people want to win big prizes on lots of different things. Children themselves are growing up in an environment where gambling is endemic. Having examined a variety of instant-win promotions, I am in little doubt that they should be viewed as gambling pre-cursors in that they are gambling-like experiences without being a form of gambling with which anyone can identify. It is unlikely that great numbers of children will develop a problem with this activity, but there is the potential concern that a small minority will. Research has consistently shown that the earlier that a child starts to gamble the more likely they are to develop a gambling problem.
Evidence that instant-win products are problematic to young children is mostly anecdotal. For instance, a number of years ago, I appeared on a UK daytime television programme with a mother and her two children (aged nine and ten years of age) who literally spent all their disposable income on instant-win promotions. These two children had spent hundreds of pounds of their pocket money in the hope of winning the elusive prizes offered but never won more than another bag of potato chips. The mother claimed they had “the gambling bug” and was “terrified they will have problems when they grow up”. She claimed she had done her utmost to stop them using their pocket money in this way but as soon as her back was turned they were off to the local corner shop to buy instant-win products. This wasn’t just restricted to products they enjoyed anyway. For instance, when they went to the supermarket to shop the children just fill up the shopping trolley with anything that has an instant-win promotion including tins of cat food – even though they didn’t have a cat!
Harsh critics of instant-win promotions might advocate a complete banning of these types of marketing endeavors. However, this is impractical if not somewhat over the top. What is more, there is no empirical evidence (to date) that there is a problem. However, this does not mean that such practices should not be monitored. Instant-win marketing appears to be on the increase and it may be that young children are particularly vulnerable to this type of promotion if anecdotal case study accounts are anything to go by.
Dr Mark Griffiths, Professor of Gambling Studies, International Gaming Research Unit, Nottingham Trent University, Nottingham, UK
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