What could Robinhood learn from gambling about gambling addiction


Cam Adair was so deep in his addiction to video games, he almost killed him.

“I was young. I probably played 16 hours a day, all day, every day. I dropped out of high school twice, pretended to be busy and cheated on my family. I got to the point where I wrote suicide. It was kind of that night when I realized I had to make a change. “

Today, after years of consulting, Adair is alive and well and the founder Cessation of the game.

Alex Kearns, a 20-year-old customer of the Robinhood shopping app, was not so lucky. He took his own life last summer after believing he had caused a loss of $ 730,000 Robin Hood.

His parents blame the investment company directly, pointing out that Kearns has repeatedly tried to seek help on the customer support line, but without success. The Kearns family has since filed an unlawful death lawsuit against Robinhood.

At a home financial services committee hearing, Robinhood CEO Vlad Tenev said: “Mr. Kearns’ move has been a deep concern for me and the company as a whole, and we have promised to take a number of very aggressive steps to make our products options safer for our customers. . “

Lawmakers are asking tough questions about platform fairness and application attractiveness

“Does an individual retailer’s share of the gambling market?” asked U.S. representative Bill Huizenga, R-Mich., at a hearing Thursday.

The audible response from those personally interested in avoiding bad gambling and burdensome, costly regulation was a resounding “No”.

Tenev challenged Robinhead’s gamification, saying: “We know the investment is serious and we are investing in all educational tools and customer support to help people on their investment path.”

“I believe the vast majority of retailers are made up of people who save to fulfill their dreams,” said Ken Griffin, CEO of Citadel Hedge Fund.

“Investors can participate in the market just as incentives can participate,” said Reddit trader Keith Gill, who pushed GameStopthe potential rose from $ 18 around the New Year to more than $ 480 later in January.

But gambling addiction experts strongly disagree. “Investing whether it’s on the stock market, you know hedge funds, dealing in derivatives or anything else, is that this is actually a form of gambling,” said Mark Griffiths, a professor of behavioral addiction at the University of Nottingham Trent in the UK.

And investing is starting to look more and more like gambling and video games. For example, the video game Space Shooters gives away free treasures. Sports gambling platform FanDuel offers free bet insurance, and Robinhood gives away free shares.

“When I look, for example, at video game players and someone who plays slot machines, behaving psychologically, they behave in almost exactly the same way. The only difference is that video game players use points to keep the score, while gamblers, using kind of how much they won and lost, they use the way they hold the results, ”Griffiths said.

He has studied addictive behaviors for years and works as a consultant in companies like Hold on, a UK-based gaming company that co-owns BetMGM MGM resorts. Entain is launching a comprehensive initiative to tackle video games and sports.

Entain and other casinos like MGM and Caesar are recognized in the industry for their leading role in the gambling problem. But gambling regulators require companies to take responsibility for initiatives against problematic gambling to varying degrees.

“The gambling industry has realized that troubled gamblers are not good for your long-term business because they have a short lifespan,” Griffiths said.

Bookmakers see that this improves the result in the long run, but it can also prevent expensive regulation.

In the UK, regulators now require gambling companies to use data they collect about their players to identify damage markers, such as significant changes in betting behavior. Informed user consent technology provides specific feedback to help players make decisions that are more favorable to them.

“What you see from investing in gambling to gaming, are these industries really trying to learn from each other,” Adair said. One of the biggest ways they have achieved this is by increasing accessibility, making it easier to engage with their products and easily spending money. “

For Adair who travels the world to talk to students and parents about the dangers of addictive behavior, education is crucial. “I think we need to pay a lot more attention to this.”

Data Disclosure: CNBC’s parent Comcast and NBC Sports are investors in FanDuel.


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