As the excitement of the Euro 2024 tournament grips fans worldwide, a timely study from The University of Warwick reveals intriguing insights into sports betting behaviour. The research, by Professor Elliot Ludvig, demonstrates that bettors are inclined to place larger and more risky bets when they have the option to 'cash out' before the outcome is determined.

Research, funded as part of The University of Warwick and Monash alliance, finds that the availability of a 'cash-out' option in sports betting significantly influences how much people are willing to bet. This finding comes at a crucial time as the Euro 2024 football championship sees millions of fans placing bets on their favourite teams.

The study, led by Dr Daniel Bennett from Monash University in collaboration with Professor Elliot Ludvig and Dr Lukasz Walasek at The University of Warwick, examined how the cash-out feature affects betting behaviour. Participants in the research placed larger bets when they knew they had the option to cash out their bet before the result. This option, increasingly popular in contemporary sports-betting apps, allows bettors to secure a portion of their potential winnings or cut their losses early.

Professor Ludvig said “The cash-out option seems to create a perception of increased control over the bet, which in turn encourages higher risk-taking. Our research suggests that when bettors perceive they can partially reverse their bets, they are more willing to stake larger amounts."

This behavioural shift has implications for how sports betting platforms are structured and the potential risks they pose to bettors. The study also found that participants’ propensity to use the cash-out feature was influenced by the value of the cash-out offer and the probability of winning. People placing bets were more likely to cash out when the offer was generous, but cash-out rates remained high even with less favourable offers.

The research highlights a critical consideration for policymakers and gambling regulators. The cash-out feature, while appealing to many bettors, may encourage higher-risk betting behaviour, particularly among inexperienced or low-risk gamblers. This could lead to increased gambling-related harm over time.

Dr Lukasz Walasek added "Our findings underscore the importance of closely monitoring and regulating cash-out features in sports-betting apps. Further, longitudinal studies are needed to assess whether frequent use of the cash-out option predicts a worsening trajectory of gambling-related harm."

As football fans engage with the Euro 2024 tournament, this study serves as a timely reminder of the complex dynamics at play in sports betting. Understanding these behaviours can help inform better regulatory practices and promote safer gambling environments.

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Notes to editors
For further information or to arrange an interview, please contact Bron Mills at the University of Warwick press office bron.mills@warwick.ac.uk

About the study: https://wrap.warwick.ac.uk/186229/ in press at Psychological Science journal

The team of researchers developed a controlled behavioural task to simulate the betting environment. Their findings consistently showed that participants placed larger bets when the cash-out option was available, with a 35% increase in mean bet size observed in trials where cash-out was an option in Experiment 1. In Experiment 2, which used a pre-registered between-participants design, there was a 24% increase in mean bet size for participants who had access to the cash-out feature.