The Gamblification of Investing: How a New Generation of Investors Is Being Born to Lose

Philip W S Newall; Leonardo Weiss-Cohen

doi:10.3390/ijerph19095391

The Gamblification of Investing: How a New Generation of Investors Is Being Born to Lose

Philip W S Newall^*
, Leonardo Weiss-Cohen

^*Corresponding author for this work

School of Psychological Science

Research output: Contribution to journal › Article (Academic Journal) › peer-review

42 Citations (Scopus)

566 Downloads (Pure)

Abstract

Investing and gambling share key features, in that both involve risk, the coming together of two or more people, and both are voluntary activities. However, investing is generally a much better way than gambling for the average person to make long-run profits. This paper reviews evidence on two types of “gamblified” investment products where this advantage does not hold for investing: high-frequency stock trading and high-risk derivatives. This review defines a gamblified investment product as one that leads most investors to lose, that attracts people at risk of experiencing gambling-related harm, and that utilizes product design principles from gambling (either by encouraging a high frequency of use or by providing the allure of big lottery-like wins). The gamblification of investing produces novel challenges for the regulation of both financial markets and gambling.

Original language	English
Article number	5391
Number of pages	10
Journal	International Journal of Environmental Research and Public Health
Volume	19
Issue number	9
DOIs	https://doi.org/10.3390/ijerph19095391
Publication status	Published - 28 Apr 2022

Bibliographical note

Funding Information:
Conflicts of Interest: Philip Newall is a member of the Advisory Board for Safer Gambling—an advisory group of the Gambling Commission in Great Britain, and in 2020 was a special advisor to the House of Lords Select Committee Enquiry on the Social and Economic Impact of the Gambling Industry. In the last five years, Philip Newall has contributed to research projects funded by Clean Up Gambling, GambleAware, Gambling Research Australia, NSW Responsible Gambling Fund, and the Victorian Responsible Gambling Foundation. Philip Newall has received travel and accommodation funding from the Spanish Federation of Rehabilitated Gamblers, and received open access fee grant income from Gambling Research Exchange Ontario. Leonardo Weiss-Cohen has received open access fee grant income from Gambling Research Exchange Ontario.

Publisher Copyright:
© 2022 by the authors. Licensee MDPI, Basel, Switzerland.

Keywords

trading
gambling
betting
financial markets
traders

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abstract = "Investing and gambling share key features, in that both involve risk, the coming together of two or more people, and both are voluntary activities. However, investing is generally a much better way than gambling for the average person to make long-run profits. This paper reviews evidence on two types of “gamblified” investment products where this advantage does not hold for investing: high-frequency stock trading and high-risk derivatives. This review defines a gamblified investment product as one that leads most investors to lose, that attracts people at risk of experiencing gambling-related harm, and that utilizes product design principles from gambling (either by encouraging a high frequency of use or by providing the allure of big lottery-like wins). The gamblification of investing produces novel challenges for the regulation of both financial markets and gambling.",

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N2 - Investing and gambling share key features, in that both involve risk, the coming together of two or more people, and both are voluntary activities. However, investing is generally a much better way than gambling for the average person to make long-run profits. This paper reviews evidence on two types of “gamblified” investment products where this advantage does not hold for investing: high-frequency stock trading and high-risk derivatives. This review defines a gamblified investment product as one that leads most investors to lose, that attracts people at risk of experiencing gambling-related harm, and that utilizes product design principles from gambling (either by encouraging a high frequency of use or by providing the allure of big lottery-like wins). The gamblification of investing produces novel challenges for the regulation of both financial markets and gambling.

AB - Investing and gambling share key features, in that both involve risk, the coming together of two or more people, and both are voluntary activities. However, investing is generally a much better way than gambling for the average person to make long-run profits. This paper reviews evidence on two types of “gamblified” investment products where this advantage does not hold for investing: high-frequency stock trading and high-risk derivatives. This review defines a gamblified investment product as one that leads most investors to lose, that attracts people at risk of experiencing gambling-related harm, and that utilizes product design principles from gambling (either by encouraging a high frequency of use or by providing the allure of big lottery-like wins). The gamblification of investing produces novel challenges for the regulation of both financial markets and gambling.

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ER -

The Gamblification of Investing: How a New Generation of Investors Is Being Born to Lose

Abstract

Bibliographical note

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