Academic researches and online gambling industry leaders agree in their conclusions that the market should be regulated so consumer protection can be ensured. Current situation leaves room for unhealthy exploitation of human behaviour traits.
Public Health Risks Cause Concerns
Academic researchers Saksham Singh and Anirudh Tagat take a behaviouristic point of view on online gambling in India in a recently published analysis. The authors reach the conclusion that the only way to ensure consumer protection is by implementing strong regulatory mechanisms that feature legal clarity.
Indian Constitution leaves gambling regulation to the states, and the archaic colonial-era Public Gaming Act of 1867 provides the general framework on national level. What follows is a labyrinth of local regulations that is often too difficult to interpret. When going virtual and online, realms that didn’t exist when most of the gambling legislation was coined, all regulation on the matter is rendered simply toothless. The legislator has only taken care to state (in the Income Tax Act) that both legal and illegal activities are to be taxed, but the fiscal effect of this measure is not guaranteed with the prevalence of offshore platforms.
Such a no-check environment, according to the authors of the behavioural analysis, makes online gambling operators prone to misusing the inherent weaknesses of human nature and behaviour patterns. According to the St Petersburg paradox defined by decision theorist Nicholas Bernoulli, people generally tend to overestimate their miniature chances to win. The statistically infinitesimal probability to get the million-dollar prize from the lottery looks quite substantial in the eyes of the better.
The so-called “Gambler’s Fallacy” is another phenomenon that lures players affecting their decision-making capabilities. Out of any six random spins of the roulette wheel, we could expect three black and three red results. But if the roulette has already gone five times and produced five black numbers, we would think the probability for having a red on the sixth time is very high. Here, however, our brain is misleading us, and the chances for the little ball scoring red or black are again fifty-fifty.
Some Platforms Make “Good” Use of Behavioral Psychology Insights
Saksham and Anirudh explain how online casinos designs and user interfaces are often made in such a way as to trick the player’s brain into placing more and more bets. Attractive graphic layouts with bright lights and colors are used together with a vast array of ‘nudges’ and an easy registration process requiring just a phone number.
Nudges, by principle, are supposed to help the decision maker to make decisions in their best interest. Many platforms, however, use methods which are better described as ‘sludges’ – dark patterns that influence the decision makers’ judgment in a harmful to him or her way.
Tricks can be based on inducing dopamine hits similar to those we get when we receive a lot of ‘likes’ on social media. This is achieved with a barrage of shiny offers highlighting big discounts and huge prize pots of millions of rupees.
Another frequent approach is making the user fear of missing out something (FOMO). Platforms highlight the number of players online, prompt video call and chat options and send alerts to play with friends.
Methods of creating a sense of urgency by pointing out the little remaining time for a betting option to expire or the limited available seats in a game are also often used.
Saksham Singh’s interests lie with behavioral economics. He is part of the Centre for Social and Behavior Change at the Ashoka University. Anirudh Tagat works at the Department of Economics at the Monk Prayogshala Research Institute in Mumbai.
Industry Also Says It’s Time for Regulation
Similar conclusions on the need for regulating the Indian gambling market are expressed by leading casino affiliate Consumer protection and the need to eliminate or at least limit undesirable effects are listed among the key reasons for the gambling market to be regulated.
Adequate legislative measures can force online wager businesses to guarantee consumer protection and encourage responsible gambling. Safety nets like speed-of-play limits and bans on false wins and reverse withdrawal are just some of the examples of suitable measures.
The sheer size of the desi online gaming market: $ 2.8 billion (roughly ₹ 20,500 crore) according to figures from the 2021 Indian edition of the Deloitte Technology, Media, and Telecommunications Predictions report, means that it should not be neglected by the regulator, not just in terms of taxation, but in view of consumer protection as well.