A new study has highlighted the potential harms for cryptocurrency investors when gambling online, with cryptocasinos posing even greater risks.
Researchers from the University of Bristol and the University of East London have conducted the first-of-its-kind study into the intersection of cryptocurrency investing and gambling, and the findings demonstrate the need for reform.
Maira Andrade, a student at the University of East London and the lead author of the paper, said: “Crypto gambling sees numerous emerging cryptocurrency risks, including the lack of regulation, risk of fraud, and extreme price volatility, added to the already known risks of gambling.”
Cryptocurrencies were first used for online gambling around a decade ago, and there are now 780 online casinos, sports books, bingos and poker rooms which accept these digital assets. This new generation of operators run 24/7, and are largely unregulated – meaning they provide a unique set of risks to existing online gamblers, such as potential access for underage users and in countries where online gambling is illegal.
The research paper cites evidence that cryptocurrency trading is strongly associated with increased gambling activity and high-risk stock trading. Cryptocurrency investors have been observed to display behaviours seen in gamblers, for example chasing losses and trading compulsively.
Cryptocasinos therefore present a double danger, as they allow gamblers to bet on a range of sophisticated online gambling products such as online slots and in-play sports bets, using cryptocurrencies as the source of funds.
Cryptocurrencies are notoriously volatile – for instance Bitcoin prices have fallen by more than half six times since 2017. Gambling online with cryptocurrency assets therefore presents exaggerated risk, as this form of currency is already prone to huge fluctuations in value.
Lead author Dr Philip Newall, lecturer at the University of Bristol’s School of Psychological Science, said: “Crypto gambling websites lie outside the current government review of online gambling, and yet two of these companies currently have their logos shown on English Premier League shirts”.
The research highlights how more than 70% of cryptocasinos did not provide links to gambling or age filtering software in their pages, and close to two-thirds (62.5%) did not offer self-assessment tests. In comparison, the majority of conventional online operators offer some form of limit setting tool, provide twice as much cooling-off period protection, and offer voluntary self-exclusion.
Cryptocasinos may be easily accessible and increasingly popular, but they lack the support that 95% of conventional operators provide. More than a third (37.5%) of cryptocasinos failed to offer any safer gambling tools for users, and their advertisement through high-profile celebrities and global sports teams has highlighted a need for more regulation.
Dr Newall added: “Younger and at-risk individuals could be the groups most impacted by online crypto gambling. At the moment there is a huge amount that we don’t know, and the landscape is changing rapidly.”
Last year the University of Bristol launched the Bristol Hub for Gambling Harms Research to lead pioneering multidisciplinary research into the wide-reaching effects of gambling harms.
Paper
‘Cryptocurrencies as Gamblified Financial Assets and Cryptocasinos: novel risks for a public health approach to gambling’ in Risks by Maira Andrade and Philip W.S. Newall
