Giving away your personal information has become normal to the point of seeming inconsequential, but in for-profit gambling it is anything but.
Gym memberships, content subscriptions, theme park entry, and so many other leisure activities require a significant amount of personal information just to get started. Gambling in the digital era is no different.
But concerns are growing about just how much personal data gambling companies gain—and how they use it—from the start of each customer relationship.
Once a new customer is registered and begins playing, gambling companies gain access to real-time insights about their behavior, preferences, wins, and losses each time they place a bet. Gamblers themselves often do not understand how, when, or by what means their data is harvested.
The Harm Reduction Journal makes two startling conclusions about the effect of targeted offers and incentives on the health of gambling customers.
Stimulation of risk-taking. Inducements to bet are associated with feelings of greater control over betting outcomes and stimulate greater risk-taking.
Normalization of gambling behavior. Targeted promotion of betting products through sports-based commentary and sports programming normalizes gambling behavior.
Big data is defined by the three Vs: variety, volume, and velocity. Thanks to rapid growth, stimulated by the legalization of sports betting in 2018 and a relative absence of federal data privacy regulation, gambling companies of all stripes have abundant and growing access to data that is both wide and deep.
Fresh insights about how customers respond to their interventions are readily available to gambling companies. From advertising campaigns and venue design to wager and incentive offers, these insights give gambling companies an increasingly larger advantage over bettors across all gambling markets.
When used in combination with increasingly more sophisticated predictive technologies, bettors stand to lose far more than they gain.
Data analysis and machine learning algorithms enable gambling companies to detect bettor patterns and behaviors. With these insights, they create new games, tweak existing ones, and anticipate declining popularity—all to attract new customers and keep existing ones coming back.
The tech market is rising to meet the growing need for increasingly more sophisticated data processing systems and predictive technologies in the gaming industry. With multi-million dollar budgets to invest in product improvements and political influence, gambling companies are locking in their control over customer data for years to come.
The knowledge of gambling companies extends far beyond their proprietary data. If there is something beyond their immediate reach that they want to know—How big is your mortgage? Where do your kids go to school? Do you have student loans?—there are third-party data companies selling a variety of customer data. Gambling companies in turn use purchased data to tailor advertising and target or re-target people based on their demographics.
One disturbing theme has emerged in for-profit gambling: economic interests have far greater power in legal and regulatory environments than consumer safety.
Gaming regulations are historically made at the state level, however, the gambling industry's influence at the federal level is growing through campaign donations and lobbying efforts. Gambling companies, anticipating future federal regulatory involvement, are making preemptive efforts to curtail federal regulations that might restrict their growth down the line.
Consumer advocacy groups have made some small wins. Bettor data holds the possibility of helping identify problem gambling, and in 2023, New Jersey became the first state to require operators to comb user data for signs of problematic play. While there is no overarching federal data protection law in the U.S., many states are hard at work on bills related to data security improvements and usage restrictions.
Bettor data is disproportionately used to the advantage of the house, and there doesn’t appear to be any reason why this trend should slow down anytime soon. While gambling company profits soar, so do calls to state gambling helplines across the nation.
If the impossible odds of data-driven targeting affect you or someone you care about, use our free, confidential helpline. You can call 1-833-BETOVER (238-6837) or text 402-806-7344 to connect with our Helpline Specialist Justin Antons (MA, LIMHP, LADC, CDGC). The Nebraska Problem Gamblers Assistance Program (NPGAP) provides support services to Nebraskans and their families.
Sources
https://www.opensecrets.org/industries/indus?ind=N07#:~:text=Although%20many%20gaming%20regulations%20are,campaign%20donations%20and%20lobbying%20efforts.