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A new measure of risk-taking in gambling

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  • Tuomo Kainulainen

Abstract

This study uses a simple metric to assess the degree of risk an individual player takes on while gambling. The player’s average potential gross win per bet placed captures both the amount of money put at risk and the volatility of returns, each of which will be correlated with risk of gambling harm. To illustrate the potential usefulness of this metric, the study analyses individual account data relating to online bets on horse racing. Analysing total stakes, the traditional indicator of risk taking, and applying ordinary least squares regression, the greatest risk takers appear to be males in their mid-fifties. Using the new metric and applying quantile regression to allow a focus on heavier bettors, the highest risk takers are shown as substantially younger, males around 30. Choice of metric and estimation method therefore matter and the approach proposed here could be used by operators to identify which online players take greatest risks.

Suggested Citation

  • Tuomo Kainulainen, 2019. "A new measure of risk-taking in gambling," International Gambling Studies, Taylor & Francis Journals, vol. 19(1), pages 167-182, January.
    • Handle: RePEc:taf:intgms:v:19:y:2019:i:1:p:167-182
    DOI: 10.1080/14459795.2018.1526312
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    Cited by:

    1. Oliver J Scholten & David Zendle & James A Walker, 2020. "Inside the decentralised casino: A longitudinal study of actual cryptocurrency gambling transactions," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-18, October.

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