Prediction market users may think they’re good at math, but a new study from the American Gaming Association (AGA) says many of those bettors/traders aren’t as mathematically proficient as they think they are.
The AGA, which stridently opposes prediction markets, doesn’t highlight math deficiencies among prediction market users, but the gaming trade group notes those traders’ math abilities are mostly in line with those of people who aren’t active bettors.
“Prediction market users are more likely to misjudge their mathematical ability,” according to the casino and sportsbook lobbying group. “Sports bettors show the greatest mathematical confidence and objective capability, meanwhile ‘prediction market’ users expressed nearly as much confidence in their mathematical skills but performed more in-line with non-gamblers when those skills were objectively tested.”
The study’s “final sample included 3,149 participants: 537 sports bettors, 574 prediction market users, 557 casino players, 495 iGaming users and 986 non-gamblers.”
AGA Says Bettors Are More Financially Literate
In what some critics and industry observers may argue is a surprising revelation, the AGA points out that bettors are more financially literate than people who don’t wager.
“Gamblers scored an average of 3.93 out of five on a widely used financial literacy index, compared with 3.72 among non-gamblers, a statistically significant difference,” according to the study. “41% of gamblers qualified as highly financially literate, compared with 27% of non-gamblers. “
However, those data points fly in the face of other research suggesting that avid, losing sports bettors often grapple with declining credit scores and rising financial delinquencies. Likewise, an array of commentary and research from the financial services industry indicate many young bettors are replacing building investment portfolios, including retirement accounts, with wagering or prediction market trading. Some critics may well argue that those aren’t habits of highly financially literate people.
The study doesn’t pinpoint which gamblers — casino table game fans, slots players, poker players or sports bettors — are the most financially literate.
Some Encouraging Signs
Not surprisingly, there’s a correlation between financial literacy and responsible wagering, potentially signaling that financially savvy, responsible bettors know that “the house always wins” and the gambling isn’t an adequate replacement for long-term investing.
“Participants with moderate or high financial literacy recorded significantly higher Positive Play scores than those with low financial literacy,” notes the AGA. “The findings suggest that financial literacy education may strengthen responsible gaming resources by helping consumers better understand risk.”
The trade group notes that among the various gambling segments, casino players are the most responsible.