Could Cashless Payments Increase Problem Gambling?

As cashless payments grow, researchers are studying the potential effects on problem gamblers. Keith Whyte of the National Council on Problem Gambling said “frictionless” payment options may send at-risk gamblers into the problem-gambler category.

Could Cashless Payments Increase Problem Gambling?

In 2008, researchers at the University of Arizona published a list of the 10 most germ-ridden workplaces. According to the study, teachers and day care workers have the dirtiest jobs, dealing day in and day out with rug rats and runny noses.

Perhaps surprisingly, the No. 2 spot is occupied by cashiers and bank tellers. That’s right—people who handle coins and bills have a germier job than garbage collectors and healthcare workers (two other professions that made the Top 10).

Kids and cash are rich sources of germs. But in most industries, dirty money has been supplanted by credit cards, e-wallets and other cashless payment options. The drive toward cash-free transactions has accelerated in the Covid-19 age, including in the once cash-dependent casino industry.

“Gaming is sort of the last stronghold of cash,” said Keith Whyte (l.), of the National Council on Problem Gambling (NCPG), in an interview with GGB News. “Our concern is that a lot of states and companies are rushing to expand cashless payments without really studying or even thinking about the potential downside”—i.e., whether cashless payments could increase the incidence of problem gambling.

Too Easy to Spend

To everyone who did their holiday shopping online, it seems obvious that payment solutions like PayPal, Apple Pay and Google Pay make it easier to spend—and possibly overspend. PayPal, for instance, requires a one-time set-up, which links the payment solution to a bank account. Then it’s just a matter of pulling the trigger, again and again and again. While shoppers know there’s a reckoning ahead, somehow the ease of the transaction makes spending seem—well, irresistible.

Common sense suggests that, as cashless technologies become more commonplace and easier to use, they could heighten the risk of problem gambling. But there’s very little research to back up that assumption. In 2020, the International Gaming Institute (IGI) at the University of Nevada Las Vegas launched the IGI Payments Collaborative to analyze the industry shift to cashless wagering.

The collaborative, along with payment technology and software providers Sightline Payments and Global Payments Gaming Solutions, have joined forces to provide “a scientific, data-driven foundation for policymakers and regulators to make sound decisions in the future.”

“Prior to Covid, there were a lot of concerns expressed about how cashless systems in the gaming environment would affect responsible gambling and/or problem gambling,” Alan Feldman, distinguished fellow in Responsible Gaming at IGI, told GGB News. “I was one of those people expressing concern, and I think the concerns are very well-founded.

“But the reality is, there are very few facts or evidence that anyone can point to, so nothing can be proven out. At the Gaming Institute, it’s incumbent upon us to do something rather than wait for a jurisdiction to come to us and says, ‘Help us understand it.’”

To date, Feldman said, the vast majority of player-data research has been based on laboratory studies, in which researchers create computer-simulated games, stake a certain amount of faux cash to study participants, and then watch them as they play. Not exactly a real-world sample. A notable exception is a five-year Harvard Medical School study, funded by U.K.-based online gaming giant GVC, that was established in 2019. GVC turned over reams of actual player data for analysis from its sports betting, online gambling and poker operations to the school’s Division of Addiction. Sightline and Global Payments will do the same at IGI.

“You have to start with the basics,” said Feldman. “Who’s using these systems? How are they using them? How often are they using them? How much are they actually transacting? What’s the decline percentage? On a panel recently, one panelist said that, of all ATM transactions in casinos, 50 percent are declined due to insufficient funds. Well, it took one phone call to determine that that’s not even close.

“We need publishable data you can point to and say, ‘This is the reality.’ Absent that, these conversations spin off into political speak, and that’s not a good way to create public policy.”

From ‘At-Risk’ to Endangered?

The vast majority of American gamblers enjoy the pastime recreationally and responsibly. For the estimated 2 percent of players who have a problem, easier, quicker and so-called “frictionless” access to cash may be perilous.

“The menus and features that makes cashless gambling exciting for consumers and lucrative for the industry are the very same features that can push gamblers into problems: removing barriers, easing the speed and size of transactions,” said Whyte. “It’s like substance abuse—eventually, it takes more and more to achieve that high. Though people may have underlying psychological problems, money is what fuels the addiction. With access to more money, they can use it much faster. That fuels the flame.”

In fact, White said, readily available cash sources “shift at-risk gamblers into the problem-gambler category.”

The coronavirus outbreak has pointed up the potential dangers of using cash and increased the demand for cashless systems. Earlier this month, Nevada regulators approved the first carded cashless model for slot play in casinos, from industry giant IGT.

Bill Miller (l.), president and CEO of the American Gaming Association, said last year that advancing digital payments was a top priority of the AGA.

“It aligns with gaming’s role as a modern, 21st Century industry and bolsters our already rigorous regulatory and responsible gaming measures,” he said. “The Covid-19 pandemic made it all the more important to advance our efforts to provide customers with the payment choice they are more comfortable with and have increasingly come to expect in their daily lives.”

It’s a potential rush to implement these systems that concerns Whyte.

“When they remove the daily limit on debit transactions as well as the limit on number of transactions a day, you can swipe your card theoretically every five seconds. We’re now seeing innovations in what they call cashless markers, like applying for a credit. It’s given to you on cell phone. It’s like writing a bad check. These are radical changes in gaming payments, but there is no study on the potential impact on problem gambling.”

Building in Safeguards

The problem has probably received the most study and attention in Australia, famous as the world capital of gambling losses.

According to the 35th edition of Australian Gambling Statistics, published in December 2019, Australians bet more than $242 billion in 2017-18. Of that, they lost almost $25 billion—the equivalent of more than $1,200 for every man, woman and child in the country.

Tim Costello, of the Australian Alliance for Gambling Reform said, “For every person directly experiencing gambling harm, it is estimated that at least six more people connected to those people experience some impact. We’re talking about an issue that affects an extraordinary number of Australians.”

Sally Gainsbury (l.), associate professor co-director of the Gambling Treatment and Research Clinic at the University of Sydney, agrees that cashless gambling may make it easier for people to spend beyond their budgets.

“Existing research shows that people who pay with digital methods tend to spend more than when paying with cash,” Gainsbury wrote in an email to GGB News. “There is reduced awareness of how much money is being spent, and the psychological salience of digital payments are lower than cash without the clear physical indicators of funds being depleted.”

She called it “highly problematic, given that the impulsivity is a core feature of gambling problems.”

But there’s a potential upside to cashless technologies, which can track spending in detail, identify problem gambling patterns as they emerge, and serve as an early-warning system for players who get in over their heads. It’s the responsibility of technology providers and gaming operators to build in these safeguards and use them.

“Cashless gambling payment systems must respond to the increased risk of overspending,” Gainsbury said. “Credit cards should not be used for gambling, as this can lead to gambling with money that individuals do not have, creating debt. Delays should be implemented into any system to create friction and allow people to take the time needed to take a break … to remove them from making impulsive and emotionally-driven decisions, rather than rational decisions.”

In a 2020 paper, Gainsbury and clinic co-director Alex Blaszczynski said cashless payment systems should:

  • Incorporate mandatory age verification requirements
  • Delay the use of deposits for gambling, to protect gamblers in “an emotionally volatile state”
  • Set limits on funds that can be transferred to a gambling account
  • Ensure that self-exclusion registries apply across venues
  • Allow customers to set customizable limits on time and money spent, and “incentivize” their use
  • Delay applications to increase limits
  • Record all digital transactions and give players a clear graphic display of their net wins and losses
  • Alert casino staff when interventions are called for

With “correct, evidence-based and tested harm-minimization protocols,” Gainsbury said, cashless gambling systems could “improve health and safety related to gambling, including reducing risks of gambling problems.”

In her view, the systems that can be perceived as a problem also contains their own solution. As Whyte observed, “Payment modernization offers a mix of risk and benefit.”

To read the Gainsbury-Blaszczynski report, go to

Articles by Author: Marjorie Preston

Marjorie Preston is a staff writer for Global Gaming Business. She is a writer, editor, author and expat Pennsylvanian who now considers herself a New Jerseyan. Based on Brigantine Island north of Atlantic City, Preston has been writing about the gaming industry since 2007, when she joined the staff of Global Gaming Business as managing editor of Casino Connection.