New TransUnion Research Highlights Challenge for Online Sports Betting Operators in Identifying Distressed Consumers

Transunion on Wednesday issued its findings in regard to the challenge for online sportsbook operators in identifying resilient and distressed customers, especially where credit card use is concerned.

The online survey of 2,739 adults was conducted between the period May 12–19, 2022 by TransUnion in conjunction with third-party research provider, Dynata.  TransUnion is an American consumer credit reporting agency that collects and aggregates information on over one billion individual consumers throughout the world.  Dynata is a global online market research firm based in Plano, Texas.

The research, entitled Online Sports Betting Study, determined that mroe than half (54%) of mobile sports bettors earn high incomes, those earning $100,000 or more, are worried about inflation and the impact on their ability to continue making their credit card payments on time.

The majority of sports bettors appeared to be in good financial standing, however, a higher percentage compared to the general population indicated they have difficulties paying credit card bills.  A higher percentage of sports gamblers compared to the general population also utiiliized short-term credit services such as high interest payday loans.

Despite this, sports bettors overall tended to be mostly optimistic about their finances.

Compared to the rest of the population, those who gambled on sports observed their income increase by 67% over the last three months whereby that number was 32% for all others surveyed.

71% of sports bettors expected their income to rise over the next three months compared to 71% of the general population.

83% of individuals who gambled on sports were optimistic about household financials over the next 12 months.

“At face value, most of the consumers engaging in mobile sports betting can likely afford to do so,” said Declan Raines, head of U.S. Gaming at TransUnion. “At the same time, our findings demonstrate how important it is, especially during a time of economic uncertainty, that operators utilize comprehensive data to identify both resilient and distressed consumers. Doing so can help operators protect players and provide a safer experience to consumers engaged in regulated betting.”

Raines noted that consumer liquidity was a critical component of this research.

“Tracking it and its relationship to the industry’s performance can help operators understand how wider economic factors can impact share of wallet, lifetime player value and responsible gaming risk.”

The study concluded that sportsbook operators who rely solely on their first-party data are limiting their view of a player without a complete picture.  Those using more extensive data were better able to monitor player stability and assess risky behavior.

Operators are at a significant advantage for enhancing responsible gaming practices when they leverage third-party data as is common in other global markets like the U.K.

“The obvious benefit of a robust responsible gaming strategy is helping to keep players out of financial trouble, improving brand loyalty and ensuring sustainable revenue,” said Raines. “Beyond that, it also demonstrates proactive efforts that improve public sentiment toward the industry overall, which is necessary if the market wants to see increased support for state access across sportsbook and online casino products.”

Mobile sports bettors, especially those concerned about paying bills in full or who have bills already past due, should be mindful of their credit health.

“Payment history and credit utilization rate, a measure of how much of available credit someone is using compared to their total credit limit, are two of the major credit scoring factors,” said Margaret Poe, head of consumer credit education at TransUnion. “Missing payments and running up credit balances can have a severe, negative impact on a consumer’s credit score.”

Many mobile sports betting websites and apps allow deposits using credit cards, a high-interest form of revolving credit, so it’s imperative for sports bettors to understand how to gamble responsibly and practice healthy credit habits to ensure their financial well-being is not negatively impacted, the report concludes.

- Aaron Goldstein, Gambling911.com