A new study suggests most gamblers are responsible enough to take smaller risks after a big loss, while also reducing their exposure when betting with ‘house money’.
A survey of over 5k horserace bettors drawn from Finland’s former horse betting monopoly Fintoto – since unified along with Finland’s two other gaming monopolies under the Veikkaus brand – has poked holes in the prevailing wisdom that gamblers are prone to ‘chasing losses’ to compensate for a recent losing wager.
The survey, which was conducted by the University of Eastern Finland Business School and published in Management Science, found that “bettors become more cautious after losses,” according to co-author Niko Suhonen. The findings run contrary to earlier studies involving increased risky behavior following losses by investors in the financial and housing markets.
The bettors in the survey were also likely to increase the size of their wagers following a winning bet, but the size of these followup bets didn’t exceed the amount recently won. In other words, bettors were keen to bet with ‘house money’ so long as they weren’t jeopardizing their original bankroll.
Suhonen claimed that losing horserace bettors were driven by a desire to close out their wagering session by at least breaking even at the end of the day. In this, they had a notable advantage over their stock-trading counterparts in that they could “reduce their bets while choosing odds of their preference.”
The researchers claim the study results help “illustrate the psychological burden caused by earlier losses” and suggest this could help stock investors keep a cooler head when faced with a plunging stock price.
Of course, the Fintoto bettors’ behavior would differ greatly from problem gamblers, whose brains have been shown to have difficulty assessing and adapting to risky situations, in part because they have trouble anticipating monetary rewards.
PROBLEMS DON’T MAKE PEOPLE HAPPY, APPARENTLY
Meanwhile, a new study has broken absolutely no new ground with its shocking revelation that problem gamblers are less happy than people who are able to control their gambling behavior.
Researchers at the Lancaster University Management School and the University of Sheffield surveyed 10k UK adults on how happy they felt based on a scale of one to ten. The average score was 7.95, while self-identified problem gamblers scored an average of 6.25.
The researchers might have saved their time, effort and money, given that earlier studies have already shown that problem gamblers are also far more likely to have problems with substance abuse and their brains produce less endorphins than control groups. Still, at least now the researchers are free to study how much wood that a woodchuck could chuck, you know, if a woodchuck could chuck wood.