The growth of the online gambling industry has been witnessed across the globe, from traditional markets in the UK and Italy to burgeoning and fast-growing spaces in the US and Canada.
While there are several factors that drive growth in the realm of iGaming, there’s no doubt that the success of this niche is built in part on the ‘power of free’ and basic social principles like reciprocity.
For example, online casino bonuses attract players and incentivise them on a mass scale, largely by offering complimentary bonus funds and free bets that help them in the pursuit of increased returns.
We’ll explore the psychology of this below, while asking how such incentives work in the online gambling space.
What is the ‘Psychology of Free’?
When you shop online or in-store, you’ll constantly see offers such as ‘Buy One, Get One Free’ (BOGOF) and ‘Spend a Minimum of $500 and Get a Free Gift Worth $100’.
Such promotional offers are so commonplace that we barely acknowledge them in the modern age, suggesting that we’ve been conditioned to comply with their terms and participate on an ever-increasing scale over time.
There’s also a natural psychological element to free offers, which relies on the fundamental principle of reciprocity. This describes the practice of exchanging things with others for mutual benefit, and in retail terms, this means responding to a generous offer or promotion with full participation and a potentially increased spend.
According to research published by Dan Ariely in his book ‘Predictably Irrational’, customers are also inclined to actively change their behavioural patterns and showcase increased compliance when they’re offered something free.
This isn’t necessarily indicative of just price, either, and remains a key emotional trigger that can compel individuals to purchase excess or items or goods that they don’t necessarily need.
It doesn’t even matter that most offers of this type don’t formally fulfil the natural definition of free, as the mere notion of reciprocity and how we’re conditioned to respond to generosity is enough to change, encourage and compel behaviour.
For example, popular buy one, get one free offers require you to make an initial purchase to qualify for the offer.
Similarly, rewards-based offers tend to require a minimum spend, often creating a financial commitment that may exceed the total value of the offer in question.
How do Online Casinos Leverage These Principles?
While iGaming remains one of those industries that continues to court controversy (especially in the states), there’s nothing wrong or unusual in the way that it leverages the power and psychology of free.
The most common type of iGaming bonus sees operators match your deposit upto a fixed value and essentially inject free funds into your account. For example, you may be offered a 100% deposit match up to the value of $50, and opting in at this value will see you receive an additional $50 in your new account.
Once again, this particular offer isn’t free as you’ll have to deposit real cash into your account (and most bonuses stipulate a minimum deposit level to guarantee eligibility).
The offer will also be subject to so-called “wagering requirements”, which will compel you to wager a specific amount before you’re able to make any withdrawals associated with your bonus funds.
However, it taps into the principle of reciprocity by offering you a tangible reward in exchange for your patronage and adds free money to your bonus balance, making it an effective and compliant way of leveraging the psychology of free.
An even more simple offer structure will see remote sportsbooks provide ‘free’ bets that can be deployed on various markets with minimum odds restrictions.
Once again, however, you’ll usually have to deposit above a minimum level or place a qualifying wager of a fixed value to qualify for the bonus, so the technical definition of ‘free’ cannot be applied accurately here.
What cannot be denied, however, is that free bets and deposit match bonuses have proved hugely successful at incentivising online gamblers in the digital age. It’s also commonly used by new or emerging casino platforms to compete with more established rivals, with consumers responding positively to particularly generous bonuses.
The Last Word
Ultimately, the psychology of free and principle of reciprocity (which iGaming brands have leveraged in the form of various bonus offers) remain key to the growth of online gambling during the last decade.
To this end, the number of active iGaming accounts in the UK alone peaked at 31.57 million as recently as 2019, up from just 24.08 million six years’ previously.
This number has increased further too since, as iGaming bonuses become increasingly creative and generous in equal measure.
So, we’d expect the current market trends in this respect to continue for the foreseeable future at least, particularly with the “psychology of free” as a universal driver of consumer transactions across the board.