Why do Bookmakers Give Betting Offers?
Advertisements of betting offers are commonplace on almost all forms of media, especially on the internet. Bookmakers are some of the most aggressive advertisers with their branding being plastered on the boards at most football games, and in some cases being the main sponsor of sporting events. The Bookmaker has used this aggressive marketing to garner the attention of the general public, in spite of multiple recessions. There is a variety of different styles of betting offers that are offered by bookmakers, for example a £10 free bet after you place two bets or making a free bet with no deposit. But what is the purpose behind these offers? There is a deep psychology behind why these offers are given and by analysing this we can gain a better understanding of these offers.
The Psychology of Betting Offers
In psychology, it is widely understood that when things are offered for free, they are considered to be more of a bargain than price reductions; even when the price reduction is actually a better bargain. There was an experiment conducted using chocolates that were offered to members of the public passing, by the choices were an expensive chocolate truffle and a cheaper chocolate. On the first run the truffle was priced at $0.15 and the cheaper chocolate was placed at $0.01 this made for a $0.14 difference between the chocolates. This was roughly half of the usual retail price of the expensive truffle, making the truffle more of a bargain over the cheap option; hence, the members of the public opted to go for the more expensive option. However, on the second run in the experiment the truffle was priced at $0.14 and the cheaper chocolate was free; This maintained the same place difference as in the first run of the experiment, but the result was the opposite. The majority of the public who participated opted to have the free, cheaper chocolate as opposed to the, more than half price, expensive truffle even though the relative bargain was exactly the same. So how does this relate to betting offers?
As mentioned before, bookmakers often entice prospective customers through the promise of a free bet, after paying for the first one. This relates clearly to the example of the chocolate; the bookmakers are hoping that by offering bets for free, they can pull in more customers than they would by offering a bet that is only a reduction from the original price. There is not enough data to concisely state that these promotions have yielded great benefits for the bookmakers who have utilised them, but by observing this obvious trend we can speculate that this has led to increased traffic and customers for these companies. The betting offers can also create benefits that are not purely financial. When a bookmaker offers free bets, they still require you to create an account with them. By creating an account, the bookmaker can gather information about you and learn more about how their own business operates. This is of great benefit to them as they can make an effort to tailor adverts to certain sectors of media, they can also understand who their customers actually are; what gender and age they are, where they love etc. The bookmaker can use this information to ensure that they are advertising broadly enough, they can not rely on their steady and regular customers to always return to them, especially when there could be multiple bookmakers courting the attention of the same group. This is clearly invaluable information to these gambling companies as they can readily adapt to the ever changing needs and wants of the consumer.
Does This Work Every Time?
Not everything that glitters is gold, so when something is offered for free, it should be taken with a grain of salt. Just because the company says that this is a good deal does not necessarily mean it is always is, in some circumstances we can become suspicious of why a bookmaker, or any company for that matter, would offer their services free of charge. Some people may take the attitude that the product or services are being offered for free purely because it is faulty or worthless. This particular problem may be avoidable in the context of betting offers. There is an example often cited when attempting to demonstrate the suspicions that people have over free items is about a man moving to a new house; he has no need for his old couch and so, he sits it on the curb. Nobody enquires about it because the people passing by assume that there is something wrong with the couch, because nobody would just give away a perfectly good couch, but this is not necessarily applicable to the betting industry because these companies offer services, not a product (like a couch). But does this mean that bookmakers will succeed every time? The answer is no; there are no guarantees in business, and bookmakers do go bust, although it is rare to see. Moreover, not everyone will agree with the premise of betting offers.
There are many people who may believe that it is somewhat unethical and immoral to promote something addictive and destructive as gambling. The aggressive promotions and enticing offers have the potential to drag people back into addictions or introduce vulnerable people to the industry. However, this is also true for other harmful and addictive industries such as the alcohol and tobacco industries. Although the tobacco industry’s ability to advertise to the public has been dampened by legislation in the past few years, the big names in the alcohol industry can still promote their product to almost the same degree as the bookmakers can. On the other hand, promotions on alcohol rarely lower the prices of the beverages to absolutely zero. It is incredibly rare to see drinks offered for free on supermarket shelves, or online; whereas the “buy one get one free” style of betting offer is extremely common on the internet, as previously discussed. Therefore, this argument against using betting offers in advertising is almost entirely moot as they are separate industries, and alcohol is a product and not a service as explored in the couch example earlier.
We can see that there is a multitude of different reasons why bookmakers advertise betting offers. Through analysing the psychological elements of advertising, the power of the word “free” is obviously of great importance to the success of the bookmaker’s advertising. The study concerning the chocolates creates an incredibly clear point, that when a company uses the word “free” effectively in their advertising, they can reap immense benefits. Moreover, after discussing the typical examples of criticism over this psychological phenomenon, it becomes obvious that these criticisms do not necessarily apply to the betting industry.
The only downside of the betting offers is the perceived immoral element of promoting gambling on a widespread basis to the general public. As mentioned before, there are many members of the public who may feel that it is morally wrong to promote gambling online, especially due to its addictive qualities and destructive nature on people’s lives. However, there are valid rebuttals to this criticism which can be formed by drawing comparisons to other harmful industries. Overall, we have been able to identify the main reasons why the nation’s bookmakers are fond of their aggressive marketing and advertising of betting offers, as well as this we have weighed up the pros and cons of these betting offers. This has created a broad answer to the question of why bookmakers give out betting offers.
Keith Hetherton - Chief Editor
Keith Hetherton is a seasoned expert in football and betting offers. Keith studied business and computers in University of Greenwich before working with the likes of William Hill and GVC.