#20: The Gen Z Gamble

I’ve sometimes heard a somewhat lazy assumption that the future of betting is at risk because Gen Z is more interested in gaming than betting.

But this could not be further from the truth. In fact, gaming is priming them to become one of the biggest gambling cohorts in history. 

So today, I want to dig a little deeper and explore not only how to engage this demographic but importantly, also how to protect them. Because my research shows that they’re the most at-risk generation due to the psychological and social drivers of their behaviour.

The Psychological and Social Factors That Could Make Gen Z The Most Prolific Gambling Cohort Ever (and the most at risk)

It’s interesting. Rather than gaming being a threat to iGaming, it’s actually a pathway.

There is, of course, the product-based pathway. Esports, for example, is a huge pathway for Gen-Z because it provides a bridge between gaming and gambling. But the conditioning starts far before then.

(For more about Esports betting, see my interview with one of the world’s biggest Esports betting experts Stepan Shulga >>)

There’s also a deeper pathway. One that starts far earlier in the “funnel”. Gaming is, in fact, priming this cohort to gamble with loot boxes, in-game purchases, and competitive play.

This has had an impact in a few different ways:

1. It has normalised gambling mechanics from an early age (Dad, can I have some Ultimate Team packs?)
   

2. They have developed high-reward sensitivity, have difficulty inhibiting impulsive responses, and exhibit dysfunctional metacognition in online gambling contexts

In fact, a 2023 study Mangat et al. (2023), shows that by the time they start gambling within Esports, they score higher on the problematic gambling scale.

Then, of course, we have the 800-pound gorilla in the room: social media. 

Gen Z is engaging heavily with content platforms like TikTok and Instagram. Plus streaming platforms like Kick and Twitch.

With social platform usage estimated to be between 4 and 10 hours per day and algorithms serving content that users interact with the most, their exposure to gambling content can increase dramatically compared to traditional channels. 

Then of course, leading this charge are influencers, who are the pop stars of today’s world.

I’ll speak more about that, but before I discuss the activation of this audience, I think it’s my responsibility to first speak about their protection of them.

Protecting Gen Z From Gambling Harm

Gen Z are what is best described as “micro gamblers”. They aren’t the type to place a £500 acca and wait a week for it to materialise. It’s small, often, and can quickly run into trouble.

There’s a significant preference to place bets on quick, real-time events, leading to more impulsivity.

Mix everything I’ve written about in the previous section: impulsivity, reward sensitivity, and social media influencers, and what do you get?

Ah yes, Betr with Jake Paul at the face of it.  

Now, I’m not digging Betr out; they’re just a convenient case study. From what I understand, they’ve taken good steps to protect this cohort from harm, such as proactively banning credit cards as a deposit method and limiting the amount that customers aged 21-25 can deposit monthly. 

But I’m using them as a good example of Gen Z behaviours wrapped into a gambling product.

I fear that the industry is moving a little bit too slowly on this. A few months back, I saw an article that the UKGC was giving “serious thought” to microbetting. 

So given an Australian study found “problem gambling” rates for 78% of people engaged in microbetting in 2022, then maybe we should have progressed a little bit beyond the “serious thought” stage.

But what’s the solution?

Well, here are a few ideas:

Real-time notifications and reminders. 

We’ve all heard of doom-scrolling, and “apparently”, Tiktok reminds you to take a break after an hour of doom-scrolling. But how about reminders for “doom betting” also?

Specifically, ones that notify you every so often of your activity. A pattern interrupt that prevents users from losing track.

Time-out periods.

Notification is the vanilla approach, but enforced breaks after a number of bets, or after a particular duration of betting would be the safer approach.

Gamified protection

There’s the gamification of betting, but can we reinforce the psychological reward system by incorporating responsible gambling features into the gambling experience? Sometimes, the carrot is better than the stick.

The Role of Influencers and Social Media in Gen Z Gambling

The key to activating this audience lies within influencers. And there’s no better case study than what Stake have done.

The macro influencer and the micro influencer. These play two critical but different roles in the conversion process. 

Macro Influencer

The role of the macro influencer is simple: they’re there to generate attention and brand recognition.

Everyone lost their minds when Stake announced the partnership with Drake. The goal was simple: to give them mainstream legitimacy in a market where crypto casinos were looked at as unorthodox.

He had a worldwide reach of millions, and some of his 6- and 7-figure bets went viral. He gave the brand street cred and helped reinforce its cool brand positioning. Strengthened by VIP experiences, concert tickets, and merch giveaways, the community around the product started to build.

Phase 1 complete.

Micro Influencer

But what Stake quickly realised is that while Drake gave them attention and a level of mainstream legitimacy, people don’t entirely trust the big boys.

They’re known for promoting anything so long as they’re given a few quid. Floyd Mayweather and Centra Tech, anyone?

Ultimately, while the big boys get attention, they’re not relatable. Nobody was looking at Drake's $1m bet on Argentina, thinking, “I’ll have a piece of that action!”

But this is where the micro-influencer comes into action.

They’re more trusted and far more relatable. They’re just like the viewing cohort. They’re also Gen Z’ers operating out of their bedroom in many cases.

I’ve written about it before, but the micro-influencer strategy that Stake adopted in India was key to their growing brand dominance in the region. 

It has also been reported that Kick began poaching Twitch gaming streamers, offering incentives, such as a creator fund. It was reported that gambling streaming was part of the deal for some streamers.

In short… want to activate Gen Z? Spend a week studying Stake.

Conclusion

I tried to write it in a matter-of-a-fact way that allows you to take whatever you want from it. I didn’t want it to come across as a “how to capitalise on Gen Z” guide.

Why?

Because I think this cohort's vulnerabilities and how they can lead to problem gambling are clear, and as yet, the protections aren’t as solid as they should be.

It’s not like the older gambling cohorts where advertising is strict and betting behaviour is different but protections are more developed.

Social media, while slowly improving, is still like the wild west. And micro-betting still needs better protections built for it. Ones that work for this demographic.

So until solutions are found to this new wave of betting, then we have to use this knowledge responsibly because there’s not a great deal that’s stopping unscrupulous actors.