4% Of Online Gamblers Won Over 5-Year Period: Study

A new study released this month has provided more evidence of what was already widely known—only a small percentage of online gamblers withdraw more money than they deposit into platforms.

The study from the University of California San Diego Rady School of Management analyzed a “financial panel dataset provided by an anonymous company” and found that just 4% of online bettors withdrew more than they spent over a five-year period (2019-23).

Researchers were able to track spending with online gambling brands such as DraftKings, FanDuel, Bet365, BetMGM and many others.

Researchers constructed a panel of 717,724 anonymous consumers who used “cards” regularly for necessary expenses and discretionary spending. The study was among Americans but researchers didn’t provide any other information on gambler location.

The study couldn’t distinguish between daily fantasy sports (DFS), online casino and traditional online sports betting activities among the merchants. Losses from online lottery gambling, promoted by a dozen states, weren't accounted for in the consumer data.

Online sports betting is sanctioned and promoted by more than 30 states, while online casino gambling is in fewer than 10 states.

Venmo and PayPal deposits into online gambling platforms were also beyond what the study could observe. Furthermore, the study couldn’t observe account balances on the online gambling platforms.

It’s also unclear how many of the 4% of purportedly “winning” players deposited once, got lucky initially, and then withdrew to never or seldomly play again within the five year-period. It’s common knowledge that if you gamble long enough you will lose money, and the more you gamble the more money you lose.

Researchers provided commentary on the reportedly widespread industry practice of limiting online sports bettors who found short-term success, suggesting that the practice also reduces the percentage of online bettors who win. Limits or not, virtually all bettors lose in the long run.

“Of the more than 700,000 gamblers that we studied, 96% percent appeared to lose money to online gambling,” said Kenneth C. Wilbur, professor of marketing and analytics at the Rady School and co-author of the study. “Only 4% made money from online betting. That is by design. Online gambling platforms often ban or throttle frequent winners’ accounts.”

The study didn’t discuss how betting apps are designed to be addictive, such as through push notifications and pushing parlays which trigger the gambling near-miss effect.

Researchers didn’t study problem gambling in the paper, but they made note of “existing literature” and said that their analysis is relevant for policy making around online betting.

According to the National Council on Problem Gambling, roughly 30% of online bettors experience problems with their gambling. GamblingHarm.org estimates this addiction figure to be high as 40-50% based on other polling data. A recent study out of Connecticut found that half of betting industry revenue comes from the top 2% of the most severely addicted players.

Because problem gambling can take years to develop, the five-year period analyzed in the UC San Diego study wouldn’t capture losses from all problems gamblers.

Bottom line: This was another study showing that online betting is a long-term losing endeavor for virtually every person who plays, with harm being done to a huge share of bettors.

Image via Pixabay.