Gambling Helplines Report Uptick in Calls from Users of Digital Trading Apps

Problem gaming helplines say they are receiving an increasing list of calls from online twenty-four hours traders interested about addiction.

Experts say this may live partly attributable to people having more time on their hands during lockdown, linked with a lack of sports to take chances on. But they’re also pointing the finger at the rising of brokerage firm apps that borrow elements from the gambling and societal gaming industries.

Felicia Grondin, playacting executive director of the Council on Compulsive Gambling of New Jersey, told The Financial Times Midweek that her organization’s 1-800-Gambler helpline had received a 50 percent step-up inward calls from daylight traders since the start of the pandemic. She calls it “the Robinhood Effect,” a reference to the popular trading app.

Democratizing Trading

By scrapping commissions, apps same Robinhood make made investment and trading easier and more affordable for anyone who wants to give it a go.

But they experience also tried to relieve oneself it to a greater extent piquant through so-called “gamification.” This canful involve the variety of stimulating graphics and behavioral prompts that gaming products usage to make a irresistible impulse intertwine for the user.

Robinhood has employed tricks square from the play industry’s playbook, such as offering a “scratch-off” go that revealed a liberal portion out of stockpile as a sign-up bonus. And just now the likes of with a slot machine, users canful live rewarded with a cascade of confetti when they make a successful trade.

“The user receive is converging and the line 'tween play and investing, which was already pretty fluid, has almost been completely erased,” Keith Whyte, executive director managing director of the UK’s National Council on Problem Gambling, told The FT.

SEC Weighs In

In May, the Securities and Exchange Commission began an investigating into whether some of the features used past present-day(a) trading apps helped or hindered traders.

SEC chief Gary Gensler noted in a written testimonial to Congress that to the highest degree regulations related to to trading were created before mobile apps rose to overlook the retail investing landscape and that new rules may be required to tackle gamification.

He said he was particularly concerned that user prompts could reason customers to pretend unsound trading decisions.

“While young technologies can take us greater memory access and production choice, they also hike questions as to whether we, as investors, are suitably protected when we craft and let financial advice,” Gensler said inward an Aug statement. “In many cases, these features may encourage investors to craft more often, put inward different products, or modify their investment funds strategy.”

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