Information on Bank Transactions Shines a Light on Gambling Behaviors

In 2020, The British gambling market equaled £14 billion making it one of the largest in the world. Over the past month, almost 50% of people were engaged in at least one form of gambling – making sports bets, visiting online casinos, or purchasing lottery tickets. Such popularity motivates local authorities and international agencies to conduct more detailed research and to evaluate what else can be done to improve the industry and reduce potential harm.

By this time, most data about UK gambling came from qualitative surveys. While they are quite informative, there are still many drawbacks. For example, inaccurate and limited data. To help solve this problem, the GambleAware Patterns of Play has designed a program that aims to evaluate how individuals behave and gamble. With obtained information and up-to-date solutions, users will be able to gamble at the best online casinos NZ and UK have to offer without any risks or harm.

The Research

Together with Monzo, one of the most popular and fast-growing digital banks in the UK, GambleAware and independent researchers have explored how people gamble. Bank transaction details allow evaluation of how much and how often people make bets. This data gives a chance to consider such important factors as income, savings, spending, and gambling habits.

To complete the research, Monzo shared transaction records of around 10,000 anonymous users that engaged in the May 2018 – November 2019 time period. 11% of these users have made at least one gambling-related payment and on average spent £136. All people were divided into three groups: non-players, below-average players, and above-average players. The second category spent less than £136 per month and the third – more than £136 per month.

With time, HSBC UK also joined the study and provided information about 1.5 million customers who have made at least one gambling transaction between March 2019 and February 2020. The groups included in-control, concerning, and very concerning. Information from six Monzo and HSBC groups was compared and led to a big number of important findings. Below, we want to share them with you.

Research themes and questions

Gambling behaviours

The first building block of the research is defining the socioeconomic characteristics of Monzo customers which, as a result, divides users into three gambling categories. Then, analysts evaluate how these groups differ in terms of gambling frequency. Finally, there is a division into weekly, monthly, and seasonal tendencies.

When considering users’ age, the distribution of users is rather obvious: people aged 30 – 40 have the highest proportion of gamblers (46 -53%). The UK Gambling Commission confirms these numbers, which reports that 28% of gamblers are 35 – 44 years old. Then come 45 – 54-year-olds (26%) and 25 – 34 (25%) year-olds. Although most people from the Monzo customer base are from urban areas, it is thought that sociodemographic results can be quite reflective.

The findings also show that non-punters have a higher monthly balance compared to punters: £197 and £171 correspondingly or a 14% difference. Above-average punters have even lower balances of £152. If to spread gambling transactions evenly across the month, we will get £4.70 daily deposits.

In total, players make less than five wagers per month – each transaction is around £22. Compared to below-average players, above-average players:

• Deposit almost 7 times more (£168 vs £25 per day);
• Their wagers are around 4 times higher;
• Play 19 times more often: 0.7 gambling transactions a day vs 1 per month.

There is one interesting fact. On average, gambling expenses are higher on the first day of the month and at the end of the month – on the 25th and the 30th. There aren’t many bets in the middle of the month. If to compare transactions throughout the week, the spendings are the highest on Thursdays and Fridays. The first research theme allows the creation of distinguishing portraits of three groups:

• Non-players (89% of the sample). The average age of 39 and around £197 in the Monzo account. This category doesn’t gamble at all.
• Below-average players (9%). The average age of 36 and around £166 in the Monzo account. Deposit around £18 and usually make one gambling transaction per month.
• Above-average players (2%). The average age of 39 and have around £153 in the Monzo account. Deposit around £684 per month and play on 22% of the days. Typically make one transaction a day.

Transaction behaviours

Not all customers receive their incomes solely into bank accounts, so it is challenging to evaluate how gamblers behave around payday. However, based on the information provided by Monzo, researchers manage to distinguish several differences in everyday expenses.

The most interesting question is how gambling transactions correlate with other categories and how they can fit into the financial lives of Monzo users. The results are rather obvious – gambling has a significant influence on the financial stability of players and their families. To get a better understanding of the topic, the study received a full list of average monthly expenses by category:

• Gambling;
• ATM;
• Bills;
• Eating out;
• Entertainment;
• Expenses;
• General;
• Groceries;
• Shopping.

Researchers found out that on months of gambling activity, the average monthly expenses are twice higher compared to months without such activity - £944 vs £498. And the sums significantly differ from one category to another. For example, below-average players spend £162 more in gambling months compared to £366 spent by above-average players. Characteristic profiles look this way:

• Non-players. Usually, spend £325 a month on 9 main categories. The highest spent categories are eating out, groceries, and shopping.
• Below-average players. Spend £601 per month on the main categories and £30 more compared to non-players on entertainment and shopping.
• Above-average players. Spend £1,370 per month and gambling makes the biggest share of their expenses - £684. They also have 6x higher monthly expenses on entertainment compared to below-average punters.

Saving behaviours

The third theme of research might not be directly connected to gambling expenses. However, it is very interesting to evaluate whether different categories of players are able to save at least anything and if the saving amounts vary based on the level of gambling. To get valuable results, researchers assess three groups by the following criteria:

1. Monthly balance of internal and external saving accounts (only Monzo).
2. The number of transactions made into saving accounts each month.
3. A number of contributions to saving pots vs gambling expenses (per month).

Noticing the impact of gambling on saving patterns gives valuable information about overall well-being and allows us to understand whether gamblers are less secure financially than non-gamblers.

The research confirms that the best financial situation has users who apply numerous budgeting instruments. For example, mental budgeting and leaving bank cards home to avoid unnecessary spending. The study also helps evaluate how different types of players manage their funds. All of this is possible thanks to Monzo’s list of 10,000 anonymous customers and mainly those who use the savings pot feature. Which, in turn, allows setting aside a share of money from the main account. These pots have a variety of features including saving goals and adding frictions to withdrawals. Monzo also has interest rates on several external saving accounts which are managed by third-party providers.

After evaluating the available accounts, researchers came to the conclusion that most players (59%) and a significant number of non-players (37%) use the internal saving pots. The number of external saving pots is much smaller although gamblers use them a bit more often. The same tendency is observed for the overall spending which leads to the conclusion that Monzo’s customers who gamble have more financial capabilities in general.

Differences in saving patterns between below- and above-average players are quite obvious. The first category puts away 42 times more money into the external pot compared to their gambling transactions. For above-average players, this ratio is only 11. The third theme allows for building the following characteristic profiles:

• Non-players. 37% have opened internal and 6% external savings accounts. The amounts on these accounts have reached £208 and £1,088 respectively.
• Below-average players. 59% have opened the internal and 9% the external pot. On average, they save £22 and £91 per month respectively.
• Above-average players. 59% of above-average punters have internal saving pots and 9% of them have external ones. On average, they have £169 and £68 on these accounts which is significantly lower compared to non-players.

How people use the gambling block

It is a very useful feature that can be used to block any type of gambling transaction and, thus, prevent these sorts of expenses. When this feature is enabled, payments simply won’t appear at the point of sale. In 2021, there were already 11 financial institutions in Britain that had gambling blocks including HSBC and Monzo. Most companies require a 48-hour prior notice during which users may cancel the request if they change their mind. Some say that this period is not necessary but researchers say that enabling blocks at once may actually lead to making more impulsive decisions and promoting compulsive gambling.

The gambling block future is a relatively new product and was introduced in the UK only in 2018. A 2020 study of eight banks showed that blocking features are usually not available across all types of accounts but users are still eager to activate blocks even if they never gamble.

Evaluation of around 10,000 Monzo users shows that 43% of them have turned the gambling block at least once. But it should be noted that it is not a random sample and was created to receive around 50% of block users. While this feature is chosen by 36% of punters, it is selected only by 1% of non-gamblers. The difference between above-average players and below-average ones was 43% and 33%.

Although the sample size is rather limited, researchers notice that users of blocks make three times bigger daily deposits before block activation – from £6.90 to £22.90 a day. Here is a characteristic profile regarding the gambling block:

• Non-players. 44% used the block at least once and 1% of them have lifted the feature in the future.
• Below-average players. Used by 33% of players for 45% of days. 25% of players have gambled on the day of enabling the feature. Average daily deposits dropped from £13 to £0.
• Above-average players. Used by 55% of regular bettors who enabled the feature for 34% of days. 43% of players have lifted the block at least once. Average daily deposits dropped from £70 to £4.

An important step to a secure gambling

The research discussed in this article aims to understand the financial patterns of gamblers and to establish what bank transactions can or can’t say about gambling behaviours. This is a rather new analysis and will surely improve in the nearest future. Even though researchers have faced several limitations throughout their studies, the findings are able to offer multiple valuable insights and give way for future work.

After reading the summary of the research, punters, gaming authorities, and legislation get more information on gambling behaviours: how often and how much people wager, whether they save funds or not, and so on. This data can result in a more tailored and personalised approach. For example, users can set daily deposit limits or session durations. Control over gambling expenses may result in better financial choices whether they regard covering credits and loans or saving money.