Why do people love live sports betting

Why do online bets attract so many people?

Gamblers don’t see themselves as gambling addicts and allow themselves to fantasize about what it would be like to make easy money.

The explosion of online gambling in Brazil has generated enormous challenges, not only for the economy but also for people’s mental health, in addition to significant personal financial losses for gamblers.

In a recent technical note, the Statistics Department of the Central Bank pointed out that in 2024 alone, the volume of online betting in Brazil was between R$18 billion and R$21 billion per month. The Central Bank believes this number is likely underestimated, as it only considers Pix transfers from individuals to betting companies.

The Central Bank estimates, in the same study, that in August alone, 5 million beneficiaries of the Bolsa Família program sent the equivalent of R$3 billion to betting companies via Pix.

Numerous studies and statistics have been published almost daily, pointing to the financial, social, and emotional damage that gambling has caused. These indicators, while alarming, illustrate the complex relationship we humans have with money.

Data from a survey conducted by the Locomotiva Institute on the profile of gamblers reveals, among other things, that 79% belong to social classes C, D, and E; 86% have debts, and 64% have a negative credit history.

Why do people gamble?

Social sciences, economic psychology, and neuroscience have been focusing on this issue, trying to explain why so many people fall into this mental trap. Even with all the statistics pointing to the extremely low chances of winning, what is most evident is behavioral biases acting to the detriment of rational assessments.

In general, gamblers don’t see themselves as gambling addicts, and they convince themselves with things like “it’s just occasionally,” “I only gamble a few small amounts,” “someone has to win, so I’ll try my luck,” or even absurdities like “I know someone who lives off gambling and earns very well,” among others.

Many people allow themselves to fantasize, even if only briefly, about what it would be like to make money easily, and most of those who gamble online, when they spend money on the game, are actually buying a small dose of hope.

The brain cannot calculate large numbers.
It’s pointless to tell a gambler that their chances of winning are, for example, 1 in 175 million, because the vast majority of people won’t reason that way; in other words, the human brain has to process a lot of information to be able to work with such a small probabilistic concept.

Therefore, the perceived risk in each bet has little to do with the results, and a lot to do with how much fear or hope a bettor is feeling at the moment they are playing.

Online betting creates a framework in the brain where reason and logic take a backseat, and hopes and dreams prevail. Betting companies know this and invest heavily in persuasive communication that skillfully sells hope and dreams.

Nobel Prize-winning economist Daniel Kahneman stated a few years ago in a New York Times article, “For emotionally significant events, the size of the probability simply doesn’t matter. What matters is the possibility of winning. People get excited by the image in their minds. The excitement grows with the size of the prize, but it doesn’t diminish with the size of the probability.

The brain always seeks facts that validate its beliefs.

Scientific studies indicate that fantasizing about winning the lottery activates the same parts of our brain that would be activated if we actually won. Therefore, the marketing of betting companies is responsible for producing this dream world that directly “speaks” to our desires and anxieties.

All advertising revolves around campaigns that make a large number of winners readily available to our memory, while simultaneously keeping the alarming number of losers hidden.

Unlike cigarettes, where the risks of addiction are printed on the packs as a warning, you’ve certainly never seen an online gambling advertisement showing someone sad and saying, “I lost again” or “I’m in debt because of gambling.” What is constantly shown are prosperous and happy winners.

So, once we’re convinced by advertising that we’re one click away from success, that luck is on our side, and that winning is easy, our brains will always tend to seek evidence that confirms our belief instead of evidence that might refute it. Confirmation bias leads us to ignore the evidence that almost no one wins.

Online betting doesn’t compensate for the risks.

Combining studies of mathematics and economics (modern portfolio theory), award-winning mathematicians Aaron Abrams and Skip Garibaldi, from the Mathematical Association of America, state, “Don’t buy lottery tickets. It’s too risky. Even the huge returns we find aren’t large enough to offset the enormous probability of not winning.”

Along the same lines, Professor David Sumpter of Uppsala University, Sweden, states: “If you don’t have strong mathematical skills and have never stopped to build mathematical models to beat the bookmakers, you won’t succeed.” He adds that the mathematical skills needed to win at online betting are so great that those who possess them will earn much more money working for betting companies than betting themselves.

Only with a significant investment in basic financial education will it be possible to empower bettors to overcome the behavioral biases that lead them to ignore the fact that most prizes are random, and those that are not invariably favor the house, because that’s what this business thrives on.

Eduardo Mira is a professional investor and CNPI analyst, holds a postgraduate degree in business pedagogy, coordinates the MBA in Financial Planning and Investment Analysis at Anhanguera Educacional, is a partner at Clube FII, and is a founding partner of the financial holding company MR4 Participações.