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The prize and lows: What is the effect of winning large jackpots on human behaviour?

Over the last two decades I have written a lot of research papers about the structural characteristics of gambling and their effect on subsequent human behaviour. One of the most basic structural characteristics that may determine whether someone gambles on a particular type of game in the first place is the size of the jackpot that a game has to offer. Most of the research in this area has been carried out on lottery gambling as this form of gambling tends to have the largest jackpots. However, there is no reason to assume that these general findings should not be any different in other types of gambling such as winning a million dollars on a slot machine.

As I have noted in some of my previous blogs, structural characteristics in gambling are typically those features of a game that are responsible for reinforcement, may satisfy gamblers’ needs and may (for some ‘vulnerable’ players) facilitate excessive gambling. Such features include the event frequency of the game, jackpot size, stake size, the probability of winning, and the use of ‘near misses’ and other ‘illusion of control’ elements. By identifying particular structural characteristics it is possible for researchers (and the gaming industry) to see how needs are identified, to see how information about gambling is perceived, and to see how thoughts about gambling are influenced.

Showing the existence of such relationships has great practical importance as potentially ‘risky’ forms of gambling can be identified. Furthermore, by identifying particular structural characteristics it may be possible to understand more about gambling motivations and behaviour, which can have useful clinical, academic and commercial implications. It has been widely accepted that structural characteristics have a role in the acquisition, development, and maintenance of gambling behaviour. However, it would appear that the role of structural characteristics has become even more significant within the past decade and has led to increased empirical research on structural gaming features.

One of the main reasons that people gamble is that it provides the chance of winning money. But does winning large amounts of money actually make people happy? People often dream about winning large life changing amounts of money on games like a national lottery. The winners hopefully look forward to a long life of everlasting happiness although studies have found that lottery winners are euphoric very briefly before they settle back to their normal level of happiness or unhappiness. This is because happiness is relative. There is a popular belief by some psychologists that in the long run, winning large amounts of money on gambling activities will not make someone happy. Researchers who study happiness say that everyone has a certain level of happiness that stays relatively constant but can be changed by particular events that make the person happy or sad.

Thankfully, this change only lasts for a short period of time. For instance, if someone is a generally happy person and a close relative dies, research shows that after a few months or so, the person will go back to the same happiness level that they were previously. However, this works the other way too. If a person is not very happy in their day-to-day life, they could win a large amount of money gambling and they would probably be happy for a couple months but then they would ‘level out’ and go back to life at their normal unhappiness level.

Back in 1978, research by Dr. Phillip Brickman and his colleagues in the Journal of Personality and Social Psychology compared a sample of 22 major lottery winners with 22 controls and also with a group of 29 paralysed accident victims. They found that major lottery winners were no happier than control groups. Another 1994 study by Dr. G. Eckblad and Dr. A. von der Lippe (in the Journal of Gambling Studies) investigated 261 Norwegian lottery winners who had won more than one million Norwegian Krone (approximately £100,000). There were few typical emotional reactions to winning apart from moderate happiness and relief. Their gambling was modest both before and after winning the lottery and their experiences with winning were almost all positive. The researchers reported that their quality of life was stable or had improved. They concluded that their results support earlier research by Dr. Roy Kaplan (also published in the Journal of Gambling Studies) who found that that lottery winners are not gamblers, but self-controlled realists.

One of the infamous questions in social science is whether money makes people happy. In 2001, Dr. Jonathan Gardner and Dr. Andrew Oswald carried out a longitudinal study on the psychologicalhealth and reported happiness of approximately 9,000 randomly chosen people. Their research reported that those whoreceived financial windfalls (i.e., by large gambling wins or receiving an inheritance) hadhigher mental wellbeing in the following year. In another longitudinal data study on a random sample of Britons who received medium-sized lottery wins of between £1000 and £120,000, the same authors compared lottery winners with two control groups (one with no gambling wins and the other with small gambling wins). They reported that big lottery winners went on to exhibit significantly better psychological health. Two years after a lottery win there was an improvement in mental wellbeing using the General Health Questionnaire. Other data (published in 2009) have also been analysed by Dr. Benedict Apouey and Dr. Andrew Clark who also found increased health benefits among lottery winners when compared to non-lottery winners. However, they also showed that lottery winners also drank and smoked more socially than non-lottery winners. Similar findings that lottery winners have better health indicators have also been reported by other researchers (such as Dr. Mikael Lindahl in a 2005 issue of the Journal of Human Resources).

On a more practical day-to-day level, most of the research on big winners has shown that their lives are much better as a result of their life changing wins but there are always a few winners who find other problems occur as a result of their instant wealth. They may give up their jobs and move to a more luxurious house in another area. This can lead to a loss of close friends from both the local neighbourhood and from their workplace. There can also be family tensions and arguments over the money and there is always the chance that winners will be bombarded with requests for money from every kind of cause or charity. There are also case reports in the literature of people become depressed after winning life-changing amounts of money (such as a 2002 study by Dr. S. Nissle and Dr. T. Bschor in the International Journal of Psychiatry in Clinical Practice), although these are presumably the exception as no researcher(s) would get case reports published showing people were happier after winning a large amount of money! However, despite potential problems, most of the psychological research (perhaps unsurprisingly) indicates that winners are glad they won.

Interestingly, one large study by Dr. Richard Arvey and his colleagues (published in a 2004 issue of the Journal of Psychology) of 1,163 lottery winners in the USA showed that the vast majority of lottery winners (63%) carried on working in the same job after their big win, with a further 11% carrying on working part-time in the same job after their big win. The mean average amount won by those who carried on working was 2.59 million US dollars. This appears to show that winning the lottery does not necessarily lead to a changing of lifestyle for the vast majority of winners although smaller scale studies have tended to show that the majority of lottery winners give up work following a big win of over $1 million US dollars.

There are also those groups of people who will view the acquisition of instant wealth as ‘undeserved’. Basically, when people win large amounts of money through gambling, other people around treat them differently even if the winners do not move neighbourhood or carry on in their job. This can lead to envy and resentment not just from people who know the winners but also from those in the locality of where the winners may move to. However, most gaming operators have an experienced team of people to help winners adjust to their new life and to minimize potential problems.

Research into the effects of high jackpots on human behaviour has been relatively sparse. The research that has been carried out suggests that huge jackpot winners do not suffer negatively as a result of winning. There is little research that indicates that high jackpot cause people to develop problems unless the large jackpot is combined with other structural features such as high event frequencies.

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

Further reading

Apouey, B. & Clark, A.E. (2009). Winning Big but Feeling no Better? TheEffect of Lottery Prizes on Physical andMental Health. Fondazione Eni Enrico Mattei Working Papers (Paper 357). Berkeley Electronic Press.

Arvey, R.D., Harpaz, I. & Liao, H. (2004). Work centrality and post-award work behavior of lottery winners. Journal of Psychology, 138, 404-420.

Brickman, P., Coates, D. & Janoff-Bulman, R. (1978). Lottery winners and accident victims: Is happiness relative? Journal of Personality and Social Psychology, 36, 917-927.

Eckblad, G.F. & von der Lippe, A.L. (1994). Norwegian lottery winners: Cautious realists. Journal of Gambling Studies, 10, 305-322.

Gardner, J. & Oswald, A.J. (2001). Does money buy happiness? A longitudinal study using data on windfalls. Warwick University Mimeograph.

Gardner, J. & Oswald, A.J. (2007). Money and mental well-being: A longitudinal study of medium-sized lottery wins. Journal of Health Economics, 26, 49-60.

Griffiths, M.D. (2009). The lottery of life after a jackpot win. Western Mail, November 11, p.16.

Griffiths, M.D. (2010). The effect of winning large jackpots on human behaviour. Casino and Gaming International, 6(4), 77-80.

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

Imbens, G. W., Rubin, D. B., & Sacerdote, B. I. (2001). Estimating the effect of unearnedincome on labor earnings, savings, and consumption: Evidence from a survey of lotteryplayers. American Economic Review, 91,778-794.

Kaplan, H. R. (1985). Lottery winners and work commitment: A behavioral test of theAmerican work ethic. Journal of the Institute for Socioeconomic Studies, 10,82-94

Kaplan, H.R. (1987). Lottery winners: The myth and reality. Journal of Gambling Studies, 3, 168-178.

Lindahl, M. (2005). Estimating the effect of income on health and mortality using lottery prizes as an exogenous source of variation in income. Journal of Human Resources, 40, 144-168.

Nissle, S. & Bschor, T. (2002). Winning the jackpot and depression: Money cannot buy happiness. International Journal of Psychiatry in Clinical Practice, 6, 181-186.

Parke, J. & Griffiths, M.D. (2007). The role of structural characteristics in gambling. In G. Smith, D. Hodgins & R. Williams (Eds.), Research and Measurement Issues in Gambling Studies. pp.211-243. New York: Elsevier.

Stake and chips: Gambling spend and the psychology of interpretation

Although a number of researchers in the field have stated that data about expenditure on gambling is important to collect when doing prevalence surveys, getting accurate and reliable data is not easy to do. The question ‘How much do you spend on gambling?’ appears simple to answer but can be interpreted in many different ways. For instance, consider the following scenario used by Professor Alex Blaszczynski and colleagues at the University of Sydney:

“You recently decided to gamble $120 on your favourite form of gambling. You initially won $60 but then following a bad run of luck, lost $100. Feeling tired, you decided to leave and return home”

When participants in the study were given this scenario above, and asked “How much did you spend on gambling?” they made a number of different interpretations. There are four basic interpretations that ‘spend’ could relate to:

  • Stake: This refers to the amount staked (i.e. the amount bet on an individual event, such as a football match, a fixed odds betting terminal or a lottery ticket).
  • Outlay: This refers to the sum of multiple bets risked during a whole gambling session.
  • Turnover: This refers to the total amount gambled, including any re-invested winnings.
  • Net expenditure: This refers to the amount gambled minus any winnings.

In this particular study, approximately two-thirds of the participants (64%), answered $40 (i.e., net expenditure) in the scenario above [i.e., $120-($120+$60-$100)]. Around one-sixth of the participants (17%) answered $120 (i.e., stake). A small number of participants answered $160. Here the participants reasoned the spend was equal to $120+$100-$60. Alternatively some answered $100 that equated to the amount lost. Finally, a very small number of participants (n=5) answered $180 (i.e., turnover), where the participants reasoned that spend was equal to investment plus winnings.

There are also issues surrounding what constitutes an individual session (especially if the person gambling goes to the toilet or has a snack or drink between or during a gambling episode). What this simple study shows is that questions relating to expenditure need to be very precise. Blaszczynski and his colleagues argued that the most relevant estimate of gambling expenditure is net expenditure, as it reflects the actual amount of money the gambler has gambled, and also represents the true cost of gambling to the individual. In the 2007 British Gambling Prevalence Survey (BGPS), participants who had spent money on gambling in the past seven days were first asked for each activity that they had gambled on. “Overall, in the last seven days did you win or lose money?” To this particular question the gamblers could either answer that they lost, won, broke even, or were still awaiting the result. If gamblers had lost money they were asked how much, and were asked to tick one of six boxes indicating the total amount lost. Similarly, if gamblers had won money they were asked how much, and could tick one of six boxes indicating the total amount won. They were also asked to what extent the previous week’s gambling activity had been typical.

The results relating to net expenditure were interesting and perhaps somewhat predictable based on what has been reported in previous literature. Gamblers appeared to over-estimate how much they had won in the previous week, meaning that net expenditure was ‘positive’ on many of the gambling activities (i.e. on these activities, gamblers claimed to have won more than they had lost). A similar finding was also reported in the previous [1999] BGPS. Given that all sectors of the gaming industry make ‘considerable profits’, the results in the BGPS study clearly show that many gamblers do not appear to be making a realistic assessment of their previous week’s spending.

However, this does not necessarily mean that they are ‘lying’, as there is a lot of evidence that gamblers over-estimate winnings and under-estimate losses, due to cognitive biases and heuristics like the ‘fixation on absolute frequency bias’ (using absolute rather than relative frequency as measure of success), concrete information bias (when concrete information such as that based on vivid memories or conspicuous incidents dominates abstract information such as computations or statistical data), and/or flexible attributions (the tendency to attribute successes to one’s own skill and failures to other influences). In short, winning experiences tend to be recalled far more easily than losses (unless the losses are very substantial and have a major detrimental effect on the day-to-day functioning of the individual).

Remembering wins and discounting losses is a consistent finding in the gambling literature. This is more likely to occur on those gambling activities that are played several days a week, rather than those activities that are engaged in once a week such as the National Lottery Draw and the football pools. It is in these latter activities that participants are more likely to have accurate recall of wins and losses, as the weekly outlay is usually identical every week (e.g. buying two lottery tickets every week or being part of a lottery syndicate). The results in the 2007 BGPS do indeed seem to indicate this is the case, with activities such as the National Lottery Draw, and the football pools, reporting weekly net losses.

Furthermore, there are other more general effects (like social desirability) that may be skewing the results in a more socially positive direction. There is also the general observation that people tend to overestimate positive outcomes and underestimate negative ones that has been applied to the psychology of gambling. Most of the positive net expenditures were fairly modest, but on those gambling activities where skill has the potential to be used, the net expenditures were much greater (e.g. online poker as part of online gambling, blackjack as part of casino table games). The results showing that the smaller the number of participants gambling on the particular activity, the greater the overall net win claimed, highlights the fact that individual variability was likely to be more pronounced among lower numbers of participants. It is also likely that some of the activities do indeed include gamblers who genuinely win more than they lose (online poker being a good example). However, the number of people doing this regularly is likely to be relatively small, as there are always more losers than winners in such activities.

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

Further reading

Blaszczynski, A., Dumlao, V. & Lange, M. (1997). How much do you spend gambling? Ambiguities in survey question items. Journal of Gambling Studies, 13, 237-252.

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

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

Wagenaar, W. (1988). Paradoxes of Gambling Behaviour. Hove: Lawrence Erlbaum Associates.

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.