Online Gambling Behavior: The Impacts of Cumulative Outcomes, Recent Outcomes, and Prior Use

• Published in: Information systems research 2014-09, Vol.25 (3), p.511-527
• Main Authors: Ma, Xiao, Kim, Seung Hyun, Kim, Sung S.
• Format: Article
• Language: English
• Subjects: Betting; Casinos; Computer & video games; Datasets; Decision making; decision making under uncertainty; Gambling; Gambling industry; Heuristic; Heuristics; hierarchical analysis; Hypotheses; Impact analysis; Information storage and retrieval systems; Information technology; Internet; Legalized gambling; Longitudinal studies; multilevel analysis; Multilevel models; Net losses; Online entertainment; Online gambling; online user behavior; panel data; repeated behavior; Studies; User behavior; Websites
• ISSN: 1047-7047; 1526-5536
• DOI: 10.1287/isre.2014.0517

The objective of this work is to examine various psychological forces underlying the behavior of people’s online gambling, an increasingly popular form of entertainment in the gaming industry. Drawing on extant theories, we first developed a model of how cumulative outcomes, recent outcomes, and prior use affect online gambling behavior differently. We empirically tested the model using longitudinal panel data collected over eight months from 22,304 actual users of a gambling website. The results of a multilevel panel data analysis strongly supported our hypotheses. First, consistent with gambling theory, individuals' online gambling was found to increase with any increase in a cumulative net gain or cumulative net loss. Second, as the availability heuristic prescribes, a recent loss reduced online gambling, whereas a recent gain increased it. Third, consistent with the literature on repeated behavior, regular use and extended use moderated the relationship between current and subsequent gambling. Taken together, the present study clarifies how people react differently to immediate and cumulative outcomes and also how regular use and extended use facilitate routine behavior in the context of online gambling. In general, our findings suggest that the three perspectives, i.e., gambling theory, the availability heuristic, and repeated behavior, should be taken into account to understand online gambling, which is in essence a series of risk-taking attempts with the potential of eventually becoming routine behavior. This study is expected to offer valuable insights into other types of online games that could engage people in risking real or cyber money and, at the same time, could be easily enmeshed with everyday life (e.g., fantasy sports, online virtual worlds).