Gambling Cognitive Biases

Cognitive biases in gambling represent a consistent tendency to deviate from rational judgment when making decisions. These poor decision-making behaviors are often influenced by subjective factors like emotions and beliefs, which may override more logical thinking. With online sports betting and casino gaming becoming legal and existing legal gambling activities like lottery and horse racing becoming more popular, it is crucial to be aware of these biases and how they can lead to problem gambling habits.

The cognitive theory of gambling suggests that cognitive biases often play a significant role in the types of addictive behaviors that can lead to a gambling disorder. With distorted beliefs and perceptions about their ability to predict potential outcomes based on irrational cognitive biases, gambling addicts are prone to making betting mistakes, including wagering with money they can't afford to lose. Identifying problem gambling behavior is an important first step towards correcting it.

Common Cognitive Biases in Gambling

Common cognitive biases revolve around illusions of luck, control, and expertise. Each bias on this list can have an adverse effect on decision-making and self-control if it is not dealt with.

Recency Bias

Recency bias refers to a tendency for people to weigh recent events or experiences more heavily than ones that came before. This cognitive psychology applies to other forums besides gambling; it is natural to think that a great meal you just ate is the best you've ever had or that a thrilling sporting event is the best you've ever seen because it is fresh in your mind.

From a gambling perspective, this bias can have negative consequences. Sports bettors may ignore a team's flaws when analyzing a game just because that team is a winning steak. Or they may become overconfident in their own abilities while on a hot streak, leading to more reckless decisions and bet sizing.

Randomness Bias

Also known as the "gambler's fallacy", randomness bias is an irrational belief that past events may influence future events in games of chance. For instance, imagine a roulette wheel that has had seven straight spins land on red numbers. Due to this hot streak, some players will use the gambler's fallacy to convince themselves that they should bet big on red on the next spin. Others might decide to bet on black because it is "due" after seven straight spins landing on red.

In reality, every spin on a standard double zero American roulette wheel has an 18 in 38 (47.37%) chance of landing on red, an 18 in 38 chance of landing on black, and a 2 in 38 (5.27%) chance of landing on one of the zeroes. Past results have no impact whatsoever on future outcomes in games of chance.

Optimism Bias

Optimism bias occurs when an individual places unrealistic optimism into a particular outcome, overestimating the odds of success and underestimating the odds of failure. For example, lottery players play the Powerball lotto despite the staggering 292.2 million to 1 odds against winning and are optimistic that they might actually win.

Some sports bettors are optimistic that they can outsmart the sportsbooks with their knowledge as fans of certain teams or leagues. Even when things are going wrong, the optimism bias leads these gamblers to believe their lucky streak is right around the corner.

Confirmation Bias

Confirmation bias occurs when people seek out information that supports or confirms their existing beliefs while ignoring evidence to the contrary. This cognitive bias is also common outside of the gambling world; thanks to the internet and social media, it has never been easier to find like-minded individuals who share your viewpoints.

When it comes to sports gambling, confirmation bias is often used to ignore red flags or warning signs. Sports bettors leaning towards betting on a team may focus on statistics that favor their side or experts who agree with them, conveniently ignoring risk indicators. This leads to irrational decisions that aren't based on all the available evidence.

Outcome Bias

Also known as being results-oriented, outcome bias refers to the tendency to grade the quality of a bet or decision based on its outcome rather than the process. This happens in everyday life as well. People tend to assume a job interview went poorly if they don't get the job or went well if they do when, in reality, there are always more factors than just the job interview that go into the decision.

When used in sports betting or other forms of gambling, this cognitive bias may override rational beliefs and real statistics due to the results. For example, a risky bet with poor odds, like a big multi-team parlay, is mathematically a losing play in the long run. However, a gambler who wins with one might be encouraged by the outcome to continue playing despite their low win percentage.

Hindsight Bias

Hindsight bias is the belief that something will happen after it has already occurred. For example, while handicapping a horse race, a bettor might consider five or six horses in the field before making their final selection. When one of the horses they had briefly considered goes on to win the race instead of their top choice, they may believe that they "knew all along" that that horse would win.

The hindsight bias strikes in sports gambling when a bettor fails to bet on a team they "knew would win" after the fact. This mindset can lead to overconfidence in an individual's abilities to pick winners or a tendency to bet on too many games out of fear of missing out again.

Attentional Bias

Attentional bias occurs when someone has a selective focus on some things while ignoring others. Slot machines tend to feed into addictive behaviors by taking advantage of this bias. For example, on a $2 spin, you may win $0.50 and have your attention drawn to the win with sound effects and bright colors, drawing your attention away from the fact that you actually had a net loss of $1.50 on that spin.

Gambling addicts often have an attentional bias towards the stimuli provided by gambling while paying less attention to their finances or other important obligations. Being able to see the complete picture when engaging in gambling is important for self-control.

Fading Affect Bias

Like recall bias, fading affect bias is a tendency for people to remember past events in a more positive light than they actually were. Put another way, the negative consequences and feelings associated with a negative event in the past fade more in our minds than the positive feelings tied to a positive event do.

For example, a gambler may be able to remember the details of an unlucky sports betting loss from years ago, but the pain from that loss is likely gone due to the fading affect bias. On the flip side, it may be easier to recall the thrill and positive feelings of a big win in the past. This emotion-driven bias can paint an unrealistic picture of an individual's relationship with gambling.

The Clustering Illusion

Also known as having a "hot hand" or a "hot streak," the clustering illusion refers to a gambler's tendency to mistakenly see random "lucky streaks" or "clusters" as non-random events. This is a specific version of the gambler's fallacy, which creates an illusion of order in a random series of individual events.

Many gamblers have unrealistic optimism that a winning streak will continue indefinitely despite past results having no bearing on the next event. They may bet far more on the same outcome than they would under different circumstances, even though the odds are the same as they always are.

The Illusion of Control

The control illusion is an illogical belief that individuals have more control over a random situation than they actually do. For example, a shooter in craps might think that their dice-throwing technique gives them a better chance to win than they have while another player is rolling.

In sports betting, a bettor with the illusion of control might assume they have a clear advantage when betting on their favorite team because they know the players well. This illogical bias ignores how well the best sportsbook knows both teams. It also ignores the impact of randomness and luck that play a role in the outcome of every sporting event.

The Gambling Cognitive Distortions Scale

Developed by researchers Namrata Raylu and Tian Po Oei in 2004, the Gambling Related Cognitions Scale (GRCS) assesses five gambling-related cognitions:

• Illusion of Control — How much control a gambler believes they have over the outcome of random events.

• Predictive Control — How well a gambler thinks they can predict future events' outcomes based on past results or patterns.

• Interpretative Bias — How a gambler interprets gambling-related stimuli, such as a near-miss on a slot machine.

• Gambling Expectancy — How much a gambler anticipates favorable results and rewards from gambling.

• Perceived Inability to Quit Gambling — A gambler's belief that they don't have the ability to stop or limit their gambling behavior.

The GRCS gives professionals and researchers helpful insight into the cognitive distortions of problem gamblers. For example, someone who illogically believes that they can accurately predict the outcome of sports betting events (predictive control) and expects to win in the long run (gambling expectancy) is more likely to be a problem gambler than someone who just plays for fun on a controlled budget knowing they are likely to lose over time.

How Cognitive Behavioral Therapy (CBT) Helps

Cognitive Behavioral Therapy (CBT) is a therapeutic approach to helping problem gamblers gain self-control and reframe their mindset. Therapists work with their clients to help them identify the distorted thoughts and flawed cognitive biases that contribute to their gambling addiction. Through understanding and analyzing these dangerous cognitive behaviors, problem gamblers can ideally learn new thought processes based around logic and rational beliefs.

CBT also aims to help clients gain self-control over their gambling addiction. By reframing gambling in a more accurate light and teaching problem gamblers techniques on how to avoid triggers and resist temptation, CBT can help successful clients break free from the negative cognitive biases that led to the gambling addiction in the first place.

Responsible Gambling Resources

Online sports betting and online casino gambling can be fun forms of entertainment when they are enjoyed responsibly. The most important aspects of responsible gambling are self-control, betting within your means, and betting only with money you can comfortably afford to lose. If you ever feel like you are not in control and may have a gambling addiction, please don't hesitate to reach out for help. These national resources are available 24/7 with all different stages of gambling problems:

• Call: 1-800-GAMBLER

• Text: 800GAM

• Live Chat: National Council on Problem Gambling