“Losses disguised as wins” lead people to overestimate gambling wins

“Losses disguised as wins” (LDWs) are a common feature in electronic gambling machines (EGMs). LDWs occur when a net gambling loss (e.g., wagering $1 and receiving a payout of 75 cents) is celebrated with sounds and animations in a manner similar to true a win. LDWs may be a harmful EGM feature. Research suggests that LDWs may lead people to overestimate the number of wins they experience when gambling.

In this study, the researchers aimed to support previous research on LDWs in a large sample of 940 Australian adults. Participants watched a video of 10 different wagers being made on an online slot machine game. They were assigned to either a control condition in which they saw only true wins and losses, or an LDW condition in which they saw three LDWs along with true wins and losses.

The researchers found that participants in the LDW condition overestimated the number of wins compared to participants in the control condition. This effect was found in people at low and high risks of gambling harm. These results suggest that LDWs may cause people to believe they are winning money when they are losing. Therefore, to minimize gambling harms, the LDW feature can be regulated. LDWs are not an essential feature of EGMs. Gambling policy makers can use these findings to highlight the importance of removing or decreasing the presence of LDWs in EGMs.

See the two-page plain language article summary Losses disguised as wins” lead people to overestimate gambling wins: An Australian study with a large online sample in Greo's Evidence Centre.