Tuesday, February 1, 2011

Idea: Charitable Gambling & The Unexpected Merger of User Insights

Super Bowl week has arrived and my mind's on football. Despite the fact that my hometown Patriots failed to get there, I'm actually looking forward to this game. The NFL's popularity has skyrocketed in the past decade (Sunday's event is expected to be the largest viewing audience in sports television history), and this is due no small part to the games fans play around the games. I'm talking, of course, about Fantasy Football and sports gambling.

The rise of the internet and expansion of TV coverage has enabled even the casual spectator to get all the information they need on every player in every game. This has been a key to the meteoric rise of Fantasy Football. If you're not familiar, Fantasy Football allows football fans to create and compete with their own notional lineup made up of real players. Performance by a Fantasy Owner's players in a game (Touchdowns, Yards, etc.) lead to points for that person's team. The impact on real-life football? The Fantasy Sports Trade Association reports that "55 percent of fantasy sports players report watching more sports on television since they started playing fantasy sports".

Gambling, meanwhile, has been steadily gaining popularity for quite some time as well. Online gambling sites have enabled the average football fan place bets online in a far more easier and safer way than once possible. Of course, it is illegal, but convenience has a way of encouraging these kinds of activities. Finally, it's worth that there has been a recent emergence other competitions for the "active spectator", including "survivor pools" (attempt to pick winning team every week until you lose) and "pick'em leagues" (pick a series of games every week against competition). These competitions take on the mechanics of gambling (e.g. picking games against the point spread), but they tend to include more of the average fan.

So why all the gambling and game-playing? Well for some, gambling is about the pursuit of money at best, and at worst, it's an addiction that goes much deeper. However, these hardcore gamblers are not the reason for the recent rise in NFL popularity. The rise is more from the casual fan who has picked up all these various competitions as a way of making the actual product that much more exciting. Sure, it's still often about the thrill of risking a few bucks to win a little spending money, but if it's solely about the money, why not just play cards or scratch tickets? The reason is that it's NOT just about the money. People play these games because it makes the actual football action that much more exciting for many people. A random Week 6 Cardinals-Browns game is meaningless and boring unless you're counting on Peyton Hillis to score two touchdowns to win your fantasy football game...then it becomes exciting. (Author's Note: I actually stopped playing fantasy football a few years ago, so don't think I'm selling it here.. I'm getting to my point in the next paragraph)

Here's my point... if you ignore the seedy and illegal aspects of sports gambling, and just focus on the human behavior associated with it, you come away with the conclusion that many people in this country like to play games in order to make actual sports more entertaining. It's a way of taking some ownership and getting more immersed in the action. It's active participation more than passive observation. Now consider the fact that people are willing to lose (ie. SPEND) money in order to experience this higher level of entertainment and you really have an interesting insight.

So the point of this TReil & Error blog is about idea development, not sports gambling, so let's get back to that. This original insight about sports gambling/contests came up a while back during a conversation that a friend and I had while watching the NCAA basketball March Madness tournament. The question we asked ourselves is whether there are ways to leverage this insight in a way that is more positive than illegal sports gambling. What we came to is a completely different domain where people also are willing to give up their money: charity.

While this pairing between charity and gambling is somewhat counter-intuitive (one is risky and self-serving while the other is completely altruistic), there are some commonalities. I have the statistics on it, but most gamblers lose in the end or break even at best. Personally, I always hear of the person who goes to the casino, loses $100 and says "oh well, it's worth the price for a fun night". In other words, losing money is fine if it's equal or less than the cost of a fun time.

Meanwhile, charity has it's own associated behaviors. Some giving is done in traditional or direct ways, but other giving is done through charity events, such as galas or casino nights. On these occassions people are willing to throw their money around more willingly because "it's all in a good cause". In other words, their spending habits are completely uninhibited (and rightly so) due to the fact that the money is all going to charity. Worth noting that Americans give an average of 2% of their post-deduction salary to charities, more than any country in the world.. that's quite a bit of money.

So why not align these two things together? What if we created an online sports competition tied to charitable giving? I realize completely this is a legal mindfield in both domains (and potentially a non-starter), but I think the product itself is worth considering. Users could compete in pay-for-play online competitions, such as Football Pick'Em leagues and Fantasy Sports. Everyone who plays would have to register with their charity of choice, and they would have to pay a small monthly fee, or a per-contest fee, such as $10-$20. The losing players in the leagues or contests would "lose" their money to the charities of the winners. In other words, everyone would be competing to win money for their preferred charities...money that would be more than they could be individually. I would imagine that charitable organizations would be willing to give up prizes and benefits for the ability to get the huge exposure of the sports-watching demographic.

I could write much more about this idea, but I just wanted to focus on the core concept for this entry. If you would like to collaborate on this project, such as determining how this can be completely fair and legal, please let me know. I hope this has proven a good demonstration of two common behavioral insights combined in an unexpected way. Finally, check out the concept design for "Gamble for Good" that I created a while back. Enjoy the game on Sunday!


  1. I see your point, but I think there is nothing wrong with charities like the health lottery providing gambling services, at least profits will go towards helping people who have been unlucky in life & the people playing get just the same satisfaction that they would from a profit driven outfit.

  2. Sports betting is gaining popularity day by day on the web. About a decade ago, when there were no sports betting websites available on the web, the interested bettors had to go out and find certain sports bookies who would help them to bet on their favorite sports. Some of these sports bookies also had personal fee. It is a wearisome thing to tackle with the sports bookies and moreover, you could never trust these sports bookies. So, in other words, the bettors could never assume their money to be safe.