Research: Word the Warning Properly to Prevent Excessive Losses

The approach to warning gamblers may actually help with excessive gambling, a recently published study in the peer-reviewed journal Psychology of Addictive Behaviours found out. Dr Philip Newall, a postdoctoral research fellow at the Experimental Gambling Research Laboratory at CQUniversity in Sydney, Australia, based on a 2,000 sample of UK gamblers, concluded that if warning signs outline potential losses rather than winnings, gamblers would be more cautious with their spending.

Positive Spin on the Wording

It is common practice within the gambling industry to use warning signs with a positive spin on the wording, like for example, outlining the average payout in percentage, instead of highlighting the amount a gambling machine retains. Such a positive spin, the “return-to-player” approach, besides using the psychological influence of the bigger number, creates false expectations, Dr Newall claims based on his research findings.

The wording in the warning signs influence gamblers in the way they perceive the likelihood of winning, and Dr Newall who is currently living in Australia, is urging state-based gambling regulators to implement requirements for warning label contents.

“Across the group, only 40 per cent of those surveyed correctly understood the mathematical meaning of the return-to-player message, compared to 66 per cent understanding the house-edge message”.

Dr Philip Newall, Experimental Gambling Research Laboratory, CQUniversity

The warning where the average amount a gambling machine retains, the “house-edge” approach, should become a standard requirement if the country wants to deal with the issue of skyrocketing spending on pokies post-coronavirus since the August re-openings, Dr Newell outlined.

House-Edge and Volatility Labels More Effective

The understanding of return-to-player messages was further enhanced by an additional volatility explanation that the statistical average is based on the long-term and may not materialize in a short period of gambling, impacting on player confidence, the study also found out.

Dr Newall noted the findings of the study based on a UK sample were similar to smaller Australian studies, as well as a recent Federal Court of Australia ruling, where return-to-player information on poker machines was ruled to be confusing to gamblers, prompting a review of labeling requirements in Victoria, the only state which currently requires warning labels on pokies.

“The findings illustrate what everyone already knew, that the current warning labels are confusing, possibly deliberately confusing, the way they present the glass as half-full – or even 90 per cent full!”

Dr Philip Newall, Experimental Gambling Research Laboratory, CQUniversity

While the rest of the states must provide return-to-player information in a written form upon request, none of the states, including Victoria use the house-edge approach to label the machines, and Dr Newall believes a national move towards the house-edge message would help protect a large proportion of excessive gamblers.

For 2018-19 Victorian residents lost a record AU$2.7 billion at the pokies, up AU$3.4 million compared to the prior year, according to the Victorian Commission for Gambling and Liquor Regulation (VCGLR). According to Australian Gambling Statistics for 2017-18, the total loss per year is AU$12.5 billion, while in the UK is £1.8 billion, almost 4 times lower.

When it comes to gambling losses, Australians are the worst in the world and this will not change unless the industry shows honesty, concluded Dr Newall, who used to be a professional gambler and poker player before turning to gambling research.

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