Submission Title
Applying Diverse Cognitive Theories of Gambling to Daily Fantasy Sports Expenditures
Session Title
Session 3-2-B: Understanding Daily Fantasy Sports from the Inside: Results from the Division on Addiction – DraftKings Research Collaborative
Presentation Type
Event
Location
Caesars Palace, Las Vegas, Nevada
Start Date
30-5-2019 11:00 AM
End Date
30-5-2019 12:25 PM
Disciplines
Behavioral Economics | Cognition and Perception | Sports Sciences
Abstract
Abstract: Researchers have proposed several theories in an attempt to explain the thought processes behind a gambler’s continued use of a gambling product. These include prospect theory (break even effect and house money effect), the availability heuristic, and the early big-win effect. While these theories have remained popular in conventional wisdom, they have undergone only limited empirical testing in natural gambling environments. Following a conceptual model for explaining weekly expenditures in online sports betting, we examine the individual effects of these theoretical processes on weekly expenditures in daily fantasy sports. We tracked the weekly betting behavior of three cohorts of subscribers to the website DraftKings. Using multi-level modeling, we examined the effects of players’ cumulative and recent (past-week) wins and losses on the total entry fees they place during a given week. We also examined the effect of experiencing an “early big-win” (defined as the largest quotients we derived from players’ biggest win and biggest entry fee during their first eight weeks of play) on weekly entry fees.
Implications: Understanding the impacts of cognitive theories on daily fantasy sports behavior can help stakeholders to craft better responsible gambling policies for daily fantasy sports players. Future research can also examine whether certain cognitive processes are associated with development of gambling-related problems.
Keywords
daily fantasy sports, cognitive theories, gambling, behavioral economics
Funding Sources
This work was supported through a contract with DraftKings. DraftKings did not have any involvement in the research itself.
Competing Interests
The Division on Addiction and affiliated faculty have received funding in the past three years from DraftKings, the Foundation for Advancing Alcohol Responsibility (FAAR), The Healing Lodge of the Seven Nations via NIH and Indian Health Services (IHS), NIH, the Integrated Centre on Addiction Prevention and Treatment of the Tung Wah Group of Hospitals, which receives funding from The Hong Kong Jockey Club Charities Trust, the Massachusetts Gaming Commission, the Massachusetts Department of Public Health, National Center for Responsible Gaming, the New Mexico Responsible Gaming Association, the British Columbia Lottery Corporation, and GVC Services, Ltd.
Applying Diverse Cognitive Theories of Gambling to Daily Fantasy Sports Expenditures
Caesars Palace, Las Vegas, Nevada
Abstract: Researchers have proposed several theories in an attempt to explain the thought processes behind a gambler’s continued use of a gambling product. These include prospect theory (break even effect and house money effect), the availability heuristic, and the early big-win effect. While these theories have remained popular in conventional wisdom, they have undergone only limited empirical testing in natural gambling environments. Following a conceptual model for explaining weekly expenditures in online sports betting, we examine the individual effects of these theoretical processes on weekly expenditures in daily fantasy sports. We tracked the weekly betting behavior of three cohorts of subscribers to the website DraftKings. Using multi-level modeling, we examined the effects of players’ cumulative and recent (past-week) wins and losses on the total entry fees they place during a given week. We also examined the effect of experiencing an “early big-win” (defined as the largest quotients we derived from players’ biggest win and biggest entry fee during their first eight weeks of play) on weekly entry fees.
Implications: Understanding the impacts of cognitive theories on daily fantasy sports behavior can help stakeholders to craft better responsible gambling policies for daily fantasy sports players. Future research can also examine whether certain cognitive processes are associated with development of gambling-related problems.
Comments
We request that this paper be placed on a panel with other DFS papers by Nelson, LaPlante, and Martin.