How bookies make your money

I'm excited to announce that my research on UK  soccer/football gambling advertising, "How bookies make your money", has now been published in the journal Judgment and Decision Making (link to press release; link to article pdf). The research documents patterns in the specific bets that bookies advertise to consumers on TV and in their shop windows. Advertised bets tend to have very high expected losses for consumers, but bookies appear to advertise specific representative events that may bias people toward thinking that these bets are better-value than they really are. I think this research is a nice example of how individuals can be "nudged" in ways that do not increase their welfare.

Although data for this article were collected over the 2014 World Cup, I have informally observed that the frequency of relevant TV advertising saw a large increase during the 2014/2015 football season, with several other bookies starting to advertise special bets before/during matches.

Abstract:

UK bookies (bookmakers) herd geographically in less-affluent areas. The present work shows that UK bookies also herd with the special bets that they advertise to consumers, both in their shop window advertising and on TV adverts as shown to millions of viewers. I report an observational study of betting adverts over the 2014 soccer World Cup. Bet types vary in complexity, with complex types having the highest expected losses. Bookies herded on a common strategy of advertising special bets on two levels: by almost exclusively advertising complex bet types with high expected losses, and by advertising representative events within a given complex bet type. This evidence is most consistent with bookies’ advertising targeting a representativeness heuristic amongst bettors. Bookies may know how to nudge bettors toward larger losses.