Episode Transcript
[00:00:01] Speaker A: Welcome to iGB podcast iGaming Checkup with Dr. Eyal. Brought to you by iGB in partnership with RubyPlay. I am Dr. Eyal. I've been passionate about games and the people that makes them for many years. Humans have been playing games of chance even before we could write. So what is going on here?
Why gambling games are so central to our experience as a species, and why something as simple as a slot machine is also the hardest game to make sure, there are plenty of igaming podcasts out there covering industry trends and headlines, but this isn't just more of the same. We are here to challenge assumptions, invite sideways thinkers and industry outsiders, and explore the complexity of an ever evolving, fascinating and innovative space. If you are ready to think differently about igaming, you are in the right place. Let's go.
Okay. Hey, so this is iGB podcast igaming checkup with Dr. Eyal. I'm here with Dr. Kasra Ghaharian.
Yeah, nice to. Nice to have you here.
[00:01:12] Speaker B: Thanks for having me. It's nice to meet you.
[00:01:14] Speaker A: Yeah.
So what we'll be discussing in this episode, really, actually I really want to do this. I give you an offer you cannot refuse.
Yeah. So the thing is. Yeah, from the Godfather, but really like when we're looking at players and seriously now, right, like what motivate players and what the role that we, you know, we play as game designers or producers or really as an industry.
So when we look at, you know, the reasons that players play, like, players play to play, do they play to win?
You know, like, what is this unique to igaming, those motivations?
Is there any ethical or moral considerations that we need to take and yeah, like, for me, I'd like to start like looking at the work that you've been doing.
You know, many panels when I come and I say players play to play not to win. Actually, they play to play not to win. Everyone looks really, really surprised. So I thought from a data perspective, you know, like if you look at players behavior from, from. From where your perch.
When you look at the data, for example, do you see, you know, players that tend to say, churn or change their behavior after they have a really large win? Or do you see that, you know, players that like, they, they say even that the level of a session or the level of, of a complete, complete behavior. Like would you say a player completely disappear when, when, when they win? Or what do you see in general with. With players over. Over their lifetime?
[00:02:57] Speaker B: Yeah, I think, you know, there's a couple of like, I guess nuggets of information that at least I've gleaned from some of the work we've done.
You know, typically there are the players that gamble a lot, they play a lot of, and you know, they usually account for a smaller percentage of the player base or you know, we've looked at bank data, as I said, so they make up a smaller proportion of that, that population as well. And you know, it's typically about 5%, maybe 10% of a population is really highly engaged. Like these people gamble maybe daily or weekly and they're doing so for long periods of time. You know, they're gambling all year.
Whereas you know, the rest of the population, they seem to maybe are more casual if you want to describe them that way. They're betting less frequently, lower volumes and that kind of thing. So I guess you can tell maybe motivations are different between just those kind of variables.
More recently we've done some work with, it might not be so interesting to this podcast audience, but we've done some work with land based slot machine data where we've been looking at what is the determining factors that make people stay in a casino or on a machine.
And it's quite interesting that you know, we have I think win loss in there like the position of a player, how much they won or how much they've lost a prior session or during a session. And it doesn't seem to explain that much why someone would leave a casino or stay at the casino.
So to your point, if we look at that, maybe it isn't about winning and losing, maybe it is just about playing. Because if it is about winning and losing, then you would expect that variable to have large explanatory power and potentially not seeing that massive explanatory power from that variable.
[00:04:48] Speaker A: So yeah, what I would expect from a game design perspective is really that the win event itself, it's, it's a part of the, of a whole orchestra of experience rather than just the win, the win event.
And I find it surprising that people find this surprising. I thought why are the players are there in the first place? They're there for, for an experience rather than, you know, like a financial, financial outcome. Like, you know, you, you in your past, you were playing poker, right? So when you a good poker player then you're there for a financial outcome. But 90% of players are not good poker players. They are there for an experience and, and they're there chasing a certain, a certain, you know, like a, even a meaningful experience. And in a way you are the, the better poker Player, the slot machine for those players who are chasing, you know, chasing those rare events, those, those runner. Runners that will give him that, that real meaningful, meaningful moment where. Yeah like when, when at the end of the day they are not really there to win money at the end probably if you look at the bankroll over time, you'll see that it's actually slowly decreasing just like a slot player. So I find that very non surprising. But there's a guy named John Hopson, he wrote a post in a journal called Gamasutra about 20, 24 years ago.
He talked about the, you know, the behavioral game design, like the random reward schedules. And he talked about the work of B.F. Skinner.
[00:06:29] Speaker B: Right.
[00:06:29] Speaker A: And I remember like at the time when it came out it was like, it was, it just blew up. Like the games up to that point were not the same as the games from that article henceforth. And now when I look on games, a successful game, casual games, I would say that show me a good game, I will show you the slot machine inside it. It might not be a slot machine. Just like I said earlier, like as a poker player, a good poker player at the table, you are the slot machine for the, for the players around you.
Every good game that creates that experience, the players, they play to play, not to win and the win event doesn't actually change their behavior.
And I was kind of wondering like, have you ever looked, when you look at igaming data, have you ever looked at data from other industries for casual players, for social players in other gaming, do you see any similarities in the data and players behavior?
[00:07:31] Speaker B: Yeah, we've looked at like payments data before and you know, from that you don't really, you don't see any gaming behavior or playing behavior. From that you're just seeing deposits and withdrawals. But even from that you can kind of glean in some insights, right?
You can see how frequently they're depositing. Did they, they cancel a withdrawal?
That's a weird one. You know, they've asked for the money but they're like oh no, wait a second, I actually want to keep that money on, on the system.
So that's all weird ones I think like I don't know, going back to your point about poker and you know, why people play, I guess this isn't really grounded in any kind of academic research I've done. But yeah, I guess like there is that motivation to just experience something. And I think, you know, when I play poker, yeah, some of the time it wasn't about the money. I used to love multi Table tournaments. And that is more about, it's like playing a sport, you know, it was like more competitive. So that was about more of the experience.
I also think like risk taking is something that's interesting. Not risk taking in terms of like gambling and money, but just risk taking in general. I think that's maybe something that humans, it just feeds into some human psyche, right, that we want to take risk, we kind of enjoy it a little bit. So um, any game that kind of feeds on that kind of risk taking component is probably going to be engaging as well, right?
[00:08:57] Speaker A: No, I absolutely, absolutely agree. But at the core of it, the risk taking has to align with a random reward schedule with, with, with the fact that when you actually do an action, you don't know what you're getting back. And, and, and again, when you look at the B.F. skinner and that, that article, the behavioral game design and the design of pretty much all modern games nowadays, they're all the successful one. At least, you know, there's probably plenty that are less successful. When your kids are playing, you know, Roblox or something, that's what they're experiencing. You know, they're experiencing that random reward schedule when they do actions and they don't quite know what they're going to get in return. And that, that risk taking is what keeps you going. But you see, like for me, one look at my career as a product person, as a game designer, a real point was reading the work of Natasha Dow Schüll, the book called Addiction by Design.
And one thing that really dawned on me reading, reading some of the research there is that really players do connect to this experience in a way that really means something to them. Like it's, it's, it's they get into this zone of play that really puts them away from distractions, from maybe problems that they have. They really are in this zone. And for that to happen you really need that, you really need that like random remote that, that randomness happening.
And I find that like, you know, this is something that is quite meaningful and it's, it's quite funny. Like our technician James earlier when, when we talked, he, he told me, you know, we, I had a recording earlier today and everything went wrong. Everything went wrong. And therefore this recording has to work out quite well. And I was thinking this is really interesting because this is exactly at the core of our experience. I, I call it the transitivity of luck or we experience that we possess and as we, as we possess luck, engaging with, with games, with games of, of chance, gambling games and games in General, but games that measure a level of luck becomes quite meaningful.
[00:11:28] Speaker B: Okay, I guess like randomness as well is just probably interesting to us because we, you know, you have your routine or your daily routine.
Um, you wouldn't want a game that's the same every time, I guess. So like the randomness probably is intriguing that, in that, in that aspect as well.
I don't know, there's probably something to the randomness, right?
[00:11:52] Speaker A: I think that, yeah, like we, we, we try to find, we try to find patterns in everything, right? Like, I mean when, when you look at data, you try to find patterns, right?
Now if you look at, if you look at any kind of input, you'll try to find patterns. That's just what we do. That's what our brain does without thinking.
And then randomness keeps you going indefinitely. There's always going to be a reason to find a pattern and you're always going to get very close to the feeling of seeing a pattern, but there's never going to be a pattern quite there.
[00:12:28] Speaker B: So as a designer, so I'm going to ask you a question. Yeah, yeah. So as a designer, so like what if you're looking at, is there like data driven design? So what kind of like outcomes are you looking at in the data to inform design?
[00:12:44] Speaker A: So we, we really look at, we look at things like retention and the number of the size of the sessions and how frequently players come back to play a game.
And the thing is that you really try to get to this abstraction of what indicators tells you that this is a good game and then try to understand what it is in that flow of the game that made it so, and then try to create variants on that. But there is a lot of data driving those decisions.
But at the same time there's a strong element of art like you, you don't quite, you don't quite know to how to explain things. You, you've got the data, you've got the mathematics that drives the, the, the combinatorics element of, of, of any, you know, of any game.
[00:13:35] Speaker B: I guess to my point earlier, it's like, yeah, you have these objective measures, right, but you've got nothing telling you like enjoyment or anything like that. That's why I wonder, I wonder like, you know, you know, when I watch a Netflix movie, right, I can give it a thumbs up, thumbs down. I like it.
Are you seeing the same stuff in igaming?
[00:13:58] Speaker A: Absolutely. Like you, you see that first of all, you see that good games are sticky. Like they tend to be, they tend to, to resonate with many, many players, there's something about them resonate with many players and they transcend the, transcend different regions and they transcend the, you know, they transcend sometimes even demographics. Right.
And bad games, usually they sink quite fast. But, and that's the big bats. Like you can have a bad game with a change of arts that becomes a good game and a good game with a change of art that becomes a bad game. And then you're saying, okay, so there's the science that guides you and then there's also the arts and the intuition.
But I was kind of wondering like saying that how do you find the data with players behavior in terms of the deposits and engagement?
How do you find the changing between different regions? Is this something that you see any kind of difference? Or do you see this is something universal?
[00:15:04] Speaker B: I mean I've done analyses on like a US data set, a UK dataset. I think we've done a recent one on a Polish dataset. So we've done like similar analyses there. And you do see the similar, similar things. Like I was saying, you see like highly engaged players, like high rollers, maybe people who are at a certain risk of harm. Then you have your more casual betters as well. And you kind of see those same patterns across the board, I think. And you know, even other studies outside of our lab like that have done similar analyses. You always kind of see this same structure along the population. So yeah, I think there are similarities in terms of engagement, but at a granular level, I can't really speak to that.
[00:15:52] Speaker A: And do you think that when you look at the data sets or are you able to take into account things like the normal wealth distribution? Because you can say, well, this player, super engaged, you know, he might at least have come, but actually this player is a multimillionaire and for, for them to get that kind of meaningful excitement for the experience, they, they really need to engage like, and then, and then you end up having a high roller.
Whereas it might be that in terms of, in terms of, you know, like a utility or net worth, there might be another player playing 1,000th of that. And they are actually the players at harm and they are the players that actually are, you know, so have you ever considered that that vertical.
[00:16:43] Speaker B: Yeah, we, yeah, certainly. I mean that's been, you know, I think a long time criticism, limitation of the, you know, the, the data that was being analyzed from the different operators. There was no kind of view into the individual's financial situation, which is a big limiting factor. Like you said, you know, $100 bet to one person could be completely different from $100 bet to, to another person.
So yeah, we've had the benefit to work with some really interesting open banking data sets specifically from the United Kingdom.
We, we formed a relationship with a department of trust, Charles Curry and I don't know if you or your listeners are familiar with him, but he, he worked with him on some data analysis on open banking data in the uk.
More recently we did an analysis of a million customers who have shared this bank data and it, with that bank data you can obviously income, you can see if they're paying a mortgage, you can see if they're using buy now, pay later products or payday loans. So you get a much more individual financial view of a customer and you see their gambling activity, you don't see what games they're playing, you know, or you know, if they're playing a slot machine for so long or how much each bet is. But you do see deposits to different gambling merchants.
So I mean to summarize some of the findings, we found with that, you know, generally speaking again you get these really highly engaged gamblers and typically they skew younger, maybe more male.
Income isn't really, it's seems to be a bit more scattered amongst the, the highly engaged group.
One thing we have looked at is the new 150 pound thresholds in the UK for soft financial checks.
We were interested in exploring that because you know, that, that the, the motivation behind that risk check is to, you know, prevent financial harms amongst gamblers. So we were interested in terms of, okay, what kind of people are hitting these 150 pound thresholds? Do they all look the same? Are their engagements level the same? Are there? Is the income distribution consistent between those people?
And it was quite interesting. I think we found basically that of the people who hit these 150 pound thresholds, you kind of see two groups of people. So one, yeah, maybe they're warranting a check because we looked at their leisure spending, you know, so not just their gambling spending, their dining, their going to movies, purchasing sporting events or all of those things. So for one group who hit these 150 pound thresholds, almost I think greater than 90% of their leisure spend was on gambling. But then there was another group where gambling only accounted for maybe 20, 30% of their leisure spend. So, so it seemed as though gambling was more part of a, you know, just holistic leisure spend. These people like to spend money on lots of different things as well as gambling.
So that was interesting and that's the power of open banking data and financial transaction data is that you can start to add objective context to what these gamblers are doing. So I think it's really powerful and I, I'm looking forward to see how it advances, you know, palm prevention in the space.
[00:20:09] Speaker A: And do you think like for you from talking with operators, do you think that the incentives are set up correctly speaking from a supplier point of view, like for us as RubyPlay, we do believe that we don't want to see players come to harm. We think it's actually a bad idea. What we want is players really having a meaningful experience at the budget that they can afford over long periods of time. It's better for them to have a habit that will still see them enjoying this in 10 years time, 15 years time than to just like blow up a budget might have been not a very large budget, but more than they can afford and then churn.
So, so I think that in many ways the incentives are aligned such that for us as an industry we do want to protect players even though it seems counterintuitive because you know, you, or at least that's the outside view of the industry is that we just want to get as much money as we can as quickly as we can and to bring players to extinction as quickly as we can or the players wallet to extinction. So I mean what do you think about the incentives in your experience? And we're talking with different people in the industry.
[00:21:26] Speaker B: I think the industry does have a challenge in terms of that narrative.
You know, I've heard it thrown around a lot and I'm going to be quite candid here that you know, yeah, we want a responsible gambler. We want, we want a customer to be with us for a long time.
I don't know if I've seen like kind of hard data on whether that's like a solid business strategy because from at least, at least from what I've seen, the gambling industry seems highly reliant on a small proportion of customers.
I, maybe, maybe 10% of customers contribute to the large majority of gambling revenues.
And how, how, how sustainable those customers? I don't know, I haven't, haven't done any longitudinal analysis but I think that I, you know, it makes sense though what you're saying.
Yeah, without a doubt kind of makes sense. I, I guess I'm just saying I haven't seen kind of any hard evidence as to, as to whether that's going to be a sustainable business model.
[00:22:22] Speaker A: See but coming from myself, from, from designing casual games, designing social Games designing, you know, all kinds of games. Over my career, it seems to always be the case. Like you always have about 10% of players driving 80% of the revenue. You have like the, the VIPs.
And to me, it feels like we, we have, we have those, those systems, you know, those, those machines, little machines, entertainment machines that give people certain experiences.
And when you talk about I gaming, I even heard in some of your, in some of your interviews, there's this element of controversy, you know, like when, when you, like, when it's like nobody seems to be very concerned about say, you know, like, like a Match three game done by, by King.
But there would be concern about a slot machine running in a regulated environment where at the end of the day you would see very similar behaviors, very similar drivers of the revenues, very similar players group behaving in similar ways, and I would argue even the players experiencing similar experiences.
So what's your experience in general when, you know, when that, that controversial element of, of, of igaming as an academic.
[00:23:49] Speaker B: In terms of like the like. So we call it the Pareto rule, right, where there's, you know, 20% of something contributes to 80% of the revenue. I think that that kind of rule surfaces across various facets of light.
I guess to my point earlier, I think it's a, I think it's a challenge that the gambling industry might need to solve because, you know, they're getting squeezed and squeezed by regulators in certain jurisdictions. So I'm just wondering at what point is that that squeeze going to be too hard to maintain, that, that, that small fraction of customers, because if there's continued regulatory pressure, that's going to cut into the, the margins and so forth. So I don't know, it's interesting, but.
[00:24:33] Speaker A: The thing is, like, how much of it comes from, again, for what I say, the idea that there's something in igaming that gets this kind of a bad. Yeah, like in an interview I heard you saying that you went to visit a different state and you talk with some friends where there is no igaming industry there. And then when you was, when you were saying that you work within the igaming that they looked at you a little bit funny, you know, so, so I mean, how much of it you feel is, you know, like, is it, is it actually a limiting factor for you as an academic trying to do this kind of research when you try to create those connections and work with large institutions?
[00:25:21] Speaker B: I don't think it's been a limiting factor for us, you know, at the Institute Here, International Gaming Institute, we have a.
I don't.
It's been around a lot longer than I've been here. I think I've been here like, you know, five years. I've been director of research now for one year. But the, the institute's been here for like 30, 35 years.
Really @ the forefront in terms of providing thought leadership on all, all aspects of the, the global gambling sector.
So I ben. I benefit from the Institute's reputation in that respect.
[00:25:53] Speaker A: That's branding.
[00:25:54] Speaker B: Yeah. A lot of people know about unlv, so that's always a nice thing to open with.
But, you know, I think, you know, more recently with the work we, we're doing around AI, that's been really positively received, I think, you know, yeah, Safer gambling, Responsible gambling is part of that initiative, but it's more about balancing AI innovation opportunities with what the challenges are, with what the risks are.
We definitely see it as a more comprehensive approach to solving these problems. So I think that's how we successfully frame a lot of our research projects is it's not like the AI research hub. It's not just about gambling harms, it's about how can we leverage this technology for all of the benefit that it's going to provide. Because I'm a bit of an AI optimist, I think there's massive benefits to have with that technology, but I also understand that there's concerns around, you know, algorithmic bias, workforce displacement, all of these things.
And I think it's just important to study it holistically, not just have a bias towards one certain angle. So I say that's how we maybe approach things and maybe that's how we get more positive reviews, if you will.
[00:27:12] Speaker A: But, you know, like, when, when we look at the industry and, you know, prevention of how much, how much of it, you know, is about player education. Like, I heard you speak about this in the past as well, and I find this quite, quite interesting, like from the player perspective themselves. Like, you know, how do we, how do we get players to engage with, with, with gambling games in a way that is healthier, in a way that is more sustainable?
[00:27:40] Speaker B: Yeah. You know, I think it's been a long, a bit of a long commentary now on like, RG tool use, how there's not like, great adoption of these tools. I think there's, there's some interesting things going on in the States with how, you know, the sportsbook is starting to pitch these tools. There's some really cool, like, advertisements, I think, I can't remember which one it is. So I'm not going to name the names, but they're doing some really cool like, RG tool use adverts where they're kind of putting a comedic spin on it, making it a bit more accessible.
But I think, like, to me, a real challenge with RG tools in general is that they're like siloed to like a single operator. Right? So, okay, I can set a deposit limit on this one sportsbook.
It doesn't kind of, it doesn't kind of feed into this kind of mental accounting. I need of all of my spending activities that I do on a daily basis. And this is going to go back to banking and why I think it's important there. But I think, I think we need more kind of like financial literacy. I think that's going to be a really important aspect of all this, is what does gambling look like in terms of all of my other financial obligations and all of my other financial spending? I think that's going to be a lot more powerful. And I know kindbridge are really trying to lead this initiative where they're trying to like, you know, really focus on financial literacy, financial health as a way to kind of have this real, like, you know, preventative measure that comes right before any gambling harms take place later down the line.
So I think education around those things early on is really important because, yeah, I don't know, these RG tools on websites and things, they just seem to be challenging in terms of getting user adoption.
[00:29:29] Speaker A: But the thing is, you know, like, let me be controversial, right? Like, you know, Warren Buffett famously installed a slot machine in his house for, you know, and, and he used to give his kids the allowance. And then they went and played the slot machine. Initially, they played it quite enthusiastically and at some point they realized, wait a minute, maybe this is not a very good idea. And it's like how he exposed his kids to the idea of, you know, engaging with some, with, with the gambling experience in a soft way.
And I'm thinking, you know, like, maybe by the point that you actually try to create this literacy about financial management, about gambling and all that habits have been created in a way that is very, very hard to change. You know, it's like you've got like the, I once heard you say, like comparing alcohol consumption and gaming. And I think that if you look at the American approach, you will wait till you're 21, you will not touch alcohol, and then people completely lose it. Actually, it's the same, very similar in Australia, but it's just the age of 18. I once been to somebody's 18th party and it was like a complete disaster when Europe, where I live now, it's more common to, even for 12 year olds, for young kids to taste a little bit of red wine with dinner here and then, and all of a sudden when they get to an age where they do it on their own, it's just, it's not a big deal, you know, they don't, they don't go out and completely, you know, lose, lose. So I'm wondering like, how do you, how do you get.
[00:31:03] Speaker B: My, my colleague Alan Feldman, he's, he's, he's often spoke, I think for the past year or two at least he's often spoked about the role of parents in terms of, you know, harm prevention, gambling risk and educating their children about gambling from an early age. Because to your point about alcohol. Right. We have conversations with our kids about alcohol, maybe introduce them, you know, have, have a sip or whatever.
But I don't know if a lot of parents do the same things with gambling.
Yeah, yeah, I think I remember, you know, placing a bet on the grand national, you know, or you know, my mom helped me place it on the grand national. But there wasn't a deep conversation in terms of, you know, what the risk might be or whatever it was playing.
[00:31:52] Speaker A: Poker with the kids.
[00:31:53] Speaker B: You know, this is a fine thing to do. You can just, you know, do it like. So yeah, maybe that does need to be a bit more. But you know, when it was drink, it was like, oh, don't drink too much.
[00:32:02] Speaker A: Like, you know, don't, don't, don't go in, not now.
[00:32:08] Speaker B: Yeah, but you know, I, I think I. To your point, I think that's important like because I, I think, you know, if you look at people's who get into problems, they have like misconceptions about winning. They don't understand probability. So maybe if they did have that understanding going into the activity, they'd be able to regulate their spending or whatever a bit better because they'd actually understand the mechanics and the probability, how winning works and that kind of thing.
[00:32:35] Speaker A: Yeah, I think that looking at data is super important, giving us more of an insight.
I think it's really interesting when you say, like I look at the data but I don't really see motivation.
But I also think that sometimes for me as a game designer, I look at the data and all I try to do is to create the mental intuition around motivation. So it's quite interesting there.
And yes, thanks for taking your time and discussing those topics with me.
[00:33:13] Speaker B: Yeah, no, it's my pleasure. Thank you for having me on.
Look forward to speaking with you again soon.
[00:33:21] Speaker A: Thanks. Kasra thanks for tuning in to this episode of iGB podcast igaming Checkup with Dr. Eyal. There's plenty more to come, so stay with us for more eye opening, thought provoking, and stigma challenging conversations that dig deeper into the world of igaming.
