Skip to main page content
U.S. flag

An official website of the United States government

Dot gov

The .gov means it’s official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

Https

The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Access keys NCBI Homepage MyNCBI Homepage Main Content Main Navigation
Review
. 2022 Apr 28;19(9):5391.
doi: 10.3390/ijerph19095391.

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

Philip W S Newall  1 , Leonardo Weiss-Cohen  2
Affiliations
Review

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

Philip W S Newall et al. Int J Environ Res Public Health. .

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.

Keywords: betting; financial markets; gambling; traders; trading.

PubMed Disclaimer

Conflict of interest statement

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.

References

    1. Schwed F. Where Are the Customers’ Yachts? Simon & Schuster; New York, NY, USA: 1940.
    1. Sharpe W.F. Capital asset prices: A theory of market equilibrium under conditions of risk. J. Financ. 1964;19:425–442.
    1. Fama E.F. Efficient Capital Markets: A Review of Theory and Empirical Work. J. Financ. 1970;25:383–417. doi: 10.2307/2325486. - DOI
    1. Thaler R.H., editor. Advances in Behavioral Finance. Russell Sage Foundation; New York, NY, USA: 1993.
    1. Stracca L. Behavioral finance and asset prices: Where do we stand? J. Econ. Psychol. 2004;25:373–405.