Pareto Distributions in Gambling: Is Most Spending Really Attributed to the “Vital Few”?
Session Title
Session 1-3-C: Lightning Talks
Presentation Type
Lightning Talk
Location
Park MGM, Las Vegas, NV
Start Date
23-5-2023 1:45 PM
End Date
23-5-2023 3:15 PM
Disciplines
Behavioral Economics | Cognitive Psychology | Social Statistics
Abstract
The extent to which certain subgroups of customers drive gambling revenue is a key area of interest for researchers and gambling operators alike. Interest in these areas has grown substantially in recent years, perhaps in part due to the expansion of online and land-based gambling in the United States (e.g., sports betting) and worldwide. However, we know little about the stability of customer revenue distributions. Understanding the stability of revenue distributions is an important step to more fully understanding the scope of risk for gambling harm to individuals over time. Research about the distribution of gambling activity and what percentage certain subgroups of gamblers are responsible for is mixed, with some studies showing a “Pareto” distribution (i.e., a small or “vital few”, or about 20% responsible for about 80% of activity, and a larger or “trivial many”, or about 80% responsible for the remaining 20% of activity), and others identifying different distributional forms. This lightning talk will explore how members of the “vital few” and “trivial many” groups might change or remain stable over time, and how both group membership and changes (or stability) in group membership might predict the risk of gambling-related problems.
A better understanding of the percentage of customers who contribute to the majority of gambling revenue is important for researchers so they can learn more about the characteristics of this group. Gambling operators can use this knowledge to enhance player safety and responsible gambling programs.
Keywords
gambling, economics of gambling, gambling wagers, revenue distributions, actual gambling data, quantitative analysis
Funding Sources
Entain PLC (formally GVC Holdings PLC), a sports betting and gambling company, provided primary funding for this research. All methodology development, analyses, results reporting and work on manuscripts in progress was conducted independently of Entain PLC. The author's employer (Division on Addiction) receives additional funding from a variety of federal, state, local, and private sources, as described at https://www.divisiononaddiction.org/funding-statement/.
Competing Interests
During the past five years, Dr. Eric R. Louderback has received research funding from a grant issued by the National Science Foundation (NSF), a government agency based in the United States. Dr. Louderback’s research has been financially supported by a Dean’s Research Fellowship from the University of Miami College of Arts & Sciences, who also provided funds to present at academic conferences. He has received travel support funds from the Hebrew University of Jerusalem to present research findings and has provided consulting services on player safety programs for Premier Lotteries Ireland. Dr. Louderback is a researcher at the Division on Addiction (Division) and all Division funders are listed on https://www.divisiononaddiction.org/funding-statement/.
Pareto Distributions in Gambling: Is Most Spending Really Attributed to the “Vital Few”?
Park MGM, Las Vegas, NV
The extent to which certain subgroups of customers drive gambling revenue is a key area of interest for researchers and gambling operators alike. Interest in these areas has grown substantially in recent years, perhaps in part due to the expansion of online and land-based gambling in the United States (e.g., sports betting) and worldwide. However, we know little about the stability of customer revenue distributions. Understanding the stability of revenue distributions is an important step to more fully understanding the scope of risk for gambling harm to individuals over time. Research about the distribution of gambling activity and what percentage certain subgroups of gamblers are responsible for is mixed, with some studies showing a “Pareto” distribution (i.e., a small or “vital few”, or about 20% responsible for about 80% of activity, and a larger or “trivial many”, or about 80% responsible for the remaining 20% of activity), and others identifying different distributional forms. This lightning talk will explore how members of the “vital few” and “trivial many” groups might change or remain stable over time, and how both group membership and changes (or stability) in group membership might predict the risk of gambling-related problems.
A better understanding of the percentage of customers who contribute to the majority of gambling revenue is important for researchers so they can learn more about the characteristics of this group. Gambling operators can use this knowledge to enhance player safety and responsible gambling programs.