Development

Future Harm-Minimization Policies with Gambling Behavior can Assist Low-Income Communities

Published on 05 December 2022

How does Gambling Really Work?

Gambling is a habit that comes in many different forms for different communities of individuals. For most individuals, gambling is a harmless pastime that causes them no real negative economic consequences. This, though, is not the case for everyone. The act of gambling can have serious social and economic consequences for unstable communities located in economically underserved regions.

Gambling relies on a psychological recovery tactic. Essentially, the act of gambling lies on a plane of infinite risk in which an individual takes the action with the hope of a positive outcome.

If there is a positive outcome, there is a change of position on the plane of risk to a lower position of risk due to reliance on surplus benefit from winning going forward. This can lead to loss aversion by the gambler with the added benefit or unconditional continuance of the act. If there is a negative outcome, then the position of the individual changes on the plane of risk to be of higher risk if they continue to take less-than-majority odds (odds that are less than 50%). The act of continuing to gamble comes from two fronts. The first is the ability to handle the harmful consequences of losing for the short-term joy of committing the act. Alternatively, the second is the need for recovery of lost alternative economic benefit by the gambler. This second front is especially relevant to distress low-income communities as they do not have the economic comfort to take on nonessential risks.

These two fronts fall into a broader understanding of the rapid response to decision-making associated with a specific psychological state, referred to more specifically as heuristics. Heuristics of a decision basically takes a shortcut to think by leaving out the individual’s analysis of the benefit and cost of taking a further associated action in the context of a situation. As a result, the decision to stop gambling or continue is made at split-second intervals which makes it nearly impossible for a change of mindset to occur before there is a significant negative outcome of the behavior. This is where the need for harm-minimization policies can create a significant change to the social and economic detriment caused by the heuristics of gambling situations.

Application of Harm-Minimization Policies

Harm-minimization policies is industry or government policies instituted within the gambling industry to minimize the risk of an individual’s short-term heuristic tendencies. Essentially, these policies limit the dimensions of the infinite risk plane during the short term and long term, lowering the overall risk of continued gambling after a negative outcome of a previous gamble or simply pushing avoidance of the act altogether. The goal of these policies is to assist low-income gamblers from losing further amounts of money when they take on increased risk due to the second front of recovery with gambling.

These policies have come to greater light in recent times, specifically due to the increase in social costs being experienced due to the act of gambling in a global setting. For context, over 2.1% of adults worldwide, in low-income communities, can state their economic state is associated with their gambling habits, and the UK alone has lost over $1.1 billion in social costs associated with gambling. As a result, the need for these policies has become apparent to politicians worldwide.

Two Forms of Harm-Minimization Policies

There are two forms of harm-minimization policies that can be implemented by industry or government leaders within the country or community of interest for these policies. These forms are referred to as primary intervention and secondary intervention. The use of the phrase intervention is due to these forms being inherently disruptive of the natural behavioral economics of the gambling industry which capitalizes on natural human behavior, such as heuristics or behavioral economic tendencies.

The primary intervention form of harm-minimization policy is the most direct in solving problems associated with excessive gambling in areas with low-income residents. Some examples of policies that are considered primary intervention in the gambling industry are the prohibition or removal of induced compliments which prolong the period of time that someone can sit at a table with limited funds, the limitation of promotions for gambling networks on the days that pension payments are given, and the requirement for the changing odds associated with a win or loss to be displayed on machines and screens located in the area which the gambling is taking place. These preventative actions change the depth of risk rather than changing the position of the individual. Consequently, this form of harm-minimization policy meets three goals which are the limitation of appeal factors for the start of gambling behavior, the recognition of decreasing odds when conducting the activity, and the protection of necessary paychecks for individual well-being. As a result, this policy specifically benefits those that fall into low-income communities since these are the individuals who economically benefit the most from the increase in their consumer surplus from the implementation of the previous policy.

The secondary intervention form of harm-minimization policy is not as direct as the primary intervention but it is effective in stopping behavioral habits associated with gambling over a long period of time. Within this form of intervention, there are a couple of key changes that happen both with the gambler and the environment that they are gambling with. The first of these is the change of the design of gambling machines to allow more time for processing a decision. This is done by slowing down the time between when the game can be clicked again or how long the animation goes on for. This counteracts the heuristic processes which result in excessive spending on gambling and lead to behavioral addiction. Another portion of this form of intervention is the removal of access to economic factors. This can be done with the removal of ATMs near the area of gambling. As a result of the loss of access to capital to push negative consequences, the behavioral processes associated with cost-benefit analysis roll into effect and can stop the individual from looking for more capital to continue their habits. Essentially, this allows for the individual to only bring the amount of money that they can afford to economically lose and not have access to get anymore, limiting the risk of that individual for economic detriment.

Conclusion

Overall, harm-minimization policies can create less risk for members of low-income communities when there exists a bad habit of gambling within the gambling industry surrounding the community. As a result of this minimized risk, it is more likely that prominent gamblers will change their habits or minimize their losses so that they are better off economically than when they started. These policies change the way that low-income communities operate over the long run and create more beneficial economic standing for these communities which have limited resources, giving these communities a good financial standing.