People’s thirst for entertainment is reaching the point of unquenchable. Smart phones are consistently the first thing people pick up in the morning and the last they put down at night. Large tech companies are well aware just how addictive their products can be. Early in November, Sean Parker, the founder of Napster and former president of Facebook, described the thought process behind building the social media giant in an interview with AXIOS:

“How do we consume as much of your time and conscious attention as possible? … We (social media) need to sort of give you a little dopamine hit every once in a while, because someone liked or commented on a photo or a post or whatever. And that’s going to get you to contribute more content, and that’s going to get you … more likes and comments…. It’s a social-validation feedback loop … you’re exploiting a vulnerability in human psychology. [We] understood this consciously. And we did it anyway. God only knows what it’s doing to our children’s brains.”

All tech companies recognize the need to stimulate the brain’s reward system, including the video game industry. They have evolved their techniques to keep their players playing and paying, even directly copying techniques from the gambling industry. And they have developed a fervent player base. In 2016, the average age of video gamers is 35, who on average have been playing video games for over 13 years with a gender split of 59% male, 41% female. And video gamers are playing a lot. Jane McGonigal, a famous game designer, said in a 2011 TED talk that over 3 billion hours a week are spent playing video games worldwide.

The lotteries would love to target this demographic. However, they might struggle to stimulate the brain in a way to capture younger demographics, especially when video games seem to take up so much of their time. Understanding the way the brain processes video games and gambling could therefore be illuminating, particularly in understanding how much of a threat the video game industry might be to the gambling industry.

Dopamine & Rewards

Dopamine, the neurotransmitter that Parker alluded to, is critical to many facets of everyday life including love, sex, concentration, learning and moving (the symptoms of Parkinson’s disease are a result of the destruction of dopamine neurons). Most people have heard of it because it plays an important role in addiction.

With pleasurable activities, dopamine’s role is often misunderstood. In response to exciting activities like sex and rock & roll, dopamine increases in the brain’s reward system.

“All abused drugs, from alcohol to cocaine to heroin, increase dopamine in this area in one way or another, and many people like to describe a spike in dopamine as ‘motivation’ or ‘pleasure.’ But that’s not quite it. Really, dopamine is signaling feedback for predicted rewards,” Dr. Bethany Brookshire wrote in Slate. “So you might say, in this brain area at least, dopamine isn’t addiction or reward or fear. Instead, it’s what we call salience. Salience is more than attention: It’s a sign of something that needs to be paid attention to, something that stands out.”

Monetary rewards are clearly a good thing and therefore dopamine is released when people receive payment. The amount of dopamine released is magnified when the reward is not guaranteed—for instance, when people gamble. Your brain keeps pumping out dopamine to figure out how a reward works.

To generalize and review in terms of scratch tickets, consider new, uninstructed potential players buying an instant ticket. They wouldn’t receive a dopamine release the first time they played because they do not know they could win money. But, if they won money on their first ticket, their brain would remember the reward and next time they played a scratch ticket, they would receive a boost in dopamine. Now let’s assume they lost the second time they played. Their third time playing, they would hypothetically receive an even larger dopamine release because they are uncertain if they will win or not.

Video games also stimulate dopamine release. One study entitled “Evidence for striatal dopamine release during a video game” found that dopamine released during a video game session increased by nearly 100%. “The magnitude of change of … was similar to that observed following intravenous injection of amphetamine and methylphenidate,” Dr. M.J. Koepp, University College London, first author, said. Other experimental studies have found similar results. Amphetamine is one of the active ingredients in Adderall, while methylphenidate is the active ingredient in Ritalin.

Addiction

It is a sad consequence that a product meant to be consumed purely for entertainment can sometimes be too entertaining. That is why many lotteries around the world have strict responsible gaming guidelines. But the threat that people can get addicted to gambling products helps the industry understand the potential severity of their product. A similar threat is present with video games; however, people are failing to take notice.

Neuroscientists have learned that drugs and gambling alter many of the same brain circuits in similar ways. But while gambling  and drug addictions are now commonly understood as viable problems for society, internet and internet video game addiction isn’t as readily accepted.  “My research… shows that there appears to be a reward system deficiency in individuals who are addicted to the internet and to online gaming, and this is the reason for why they seek pleasure and rewards in the form of gaming. Natural rewards (such as food and sex) are not experienced as rewarding enough and therefore these individuals seek stronger rewards in order to recreate a balanced state in the brain, which will drive internet use and gaming behaviors,” Daria Kuss, Course Leader MSC Cyberpsychology, Nottingham Trent University said.

“Internet games are built in such a way that they provide intermittent reinforcements, so that rewards in the game are being produced irregularly, which keeps the gamers playing,” Kuss explained.

This coincides with the study discussed earlier about an increased dopamine rush when the reward is not certain. “This is a conditioned response, similar to classical and operant conditioning principles, where individuals learn to engage in a particular behavior (i.e., gaming) to produce a pleasurable experience, which is then continuously sought, and therefore the gaming behaviors are maintained,” she added.

Gambling and Gaming

To review, both video games and gambling activate dopamine releases and both can be addictive. Is gaming a viable substitute for gambling? Could the gambling industry be losing potential players to video games?

It depends.

Video games make gambling more enjoyable. Gamers maintain larger dopamine releases when gambling than non-gamers. In an experimental study, “Video Game Training and the Reward System,” a team of scientists took 50 young adult participants who didn’t play video games and had them play a slot machine. Everyone in the group saw an activation in the reward center. Afterwards, half the group (the video game group or VG) played a video game for 30 minutes a day for two months, while the rest (the control group or CG) continued to avoid video games.

After the two months had concluded, all 50 people played a slot machine again. The VG showed a similar strong sense of reward, like they had the first time they played the slot machine. Those who did not play video games for two month showed significantly less activation of the reward center. “This longitudinal study revealed that video game training may preserve reward responsiveness in the [reward center] in a retest situation over time,” Robert C. Lorenz wrote in his paper.

According to this study, video games have a very positive effect on the gambling industry. Since more people are playing video games, that means more people are, hypothetically, enjoying gambling experiences.

But it’s important to factor in cost. Each gambling session always requires payment, while this isn’t the case with video games. Basic economic theory states that some users prefer to gamble than game, but the cost pushes them to spend money on video games because they want to spend less.

Unless the actual reward that gambling offers is so much better than the reward that a video game offers that it makes them incompatible substitutes in players’ minds. Video games offer social rewards after all. They make players feel better about themselves by using leaderboards and other social mechanics, but social rewards can’t buy a player a new car or a jet ski. When a lottery player is given the option between a cash prize or an alternative prize, they almost always pick the cash prize. It seems natural to assume money is the king of prizes.

However, according to this experimental study, “Processing of Social and Monetary Rewards in the Human Striatum,” Keise Izuma found that gaining a good reputation activates the same reward circuitry as monetary rewards. The team asked 19 subjects to take part in a simple gambling task while undergoing an fMRI to test their monetary reward response. Afterwards, the subjects recorded themselves on video introducing themselves. The following day, the subject were told while undergoing a second fMRI what people thought about the videos the subjects recorded.

“fMRI data in the social reward experiment showed that, as predicted, the acquisition of a good reputation activated the striatum and that the activated areas overlapped with those activated by monetary rewards,” Izuma wrote.

This study gives credence to a neuroeconomic theory of a “neural common currency,” which suggest that every reward, whether it be social or monetary, has a shared evaluation process in the brain. The brain exchanges dollars and popularity points into a currency that it can evaluate the two equally, like exchanging francs and pounds into euros so they can be easily compared.

This theory suggests that for every monetary award, there is a social award that could be chosen over it. For the gambling industry, our monetary prizes do not own a special monopoly on the brain’s reward system. On one hand, this presents the opportunity to explore more prizes that dabble in both social and monetary rewards, like PowerCruise. On the other hand, it suggests that social prizes that are an inherent mechanic in internet video games (leaderboards, winning games against peers) can compete with monetary prizes.

The problem is that these social prizes aren’t regulated.

Big $ for 1s & 0s

The gambling industry needs to reconsider  that people only gamble with money. Video games capture the attention of large segments of the younger generation. But the tech companies behind them are pushing for more revenue. They’re aware of what makes both gambling and gaming  entertaining. They are employing direct gambling mechanics into their games to make their games even more entertaining and addicting. But instead of offering money, they offer social rewards.

The game Counter Strike: Global Offensive (CS:GO) presents an interesting case study. CS:GO’s developer implemented a slot machine mechanic in their game. Each purchase allows players to play a wheel of fortune-type game that gives out rewards called skins. Skins change the aesthetic appearance of game characters. Therefore they are a social reward. They make players look “cooler.”

CS:GO allows players to sell their skins to other players. Different skins have different rarity levels; for example, some knife skins are very rare. The price tag for these knife skins easily get over U.S. $1,000, and one skin was sold for the equivalent of U.S. $100,000.

These skins are made up of binary/computer code. Their rarity is not due to a real shortage. The developer could give every player the rarest knife skin tomorrow with a click of a button and the value would drop down from $100,000 to $0 since it is no longer a rare commodity.

These cases are nothing more than slot machines. Other massive games, like Hearthstone, Overwatch, and Star Wars Battlefront II, are following in CS:GO’s footsteps, which prevent players from buying the item they want (or make it very difficult) and instead rely on luck to obtain their prize from what is essentially a slot machine. The more money players spend on these “loot boxes,” the more chances they get at winning.

Many of these games target people under 18, an age group that has been identified for being at a higher risk for developing addiction. The Entertainment Software Rating Board (ESRB) was recently asked to give their opinion on the matter. Any game that was considered to have real gambling in it would receive “Adult Only” rating, which would kill most games since Box Box stores will not sell Adult Only games. But ESRB came out with a resounding no. “ESRB does not consider loot boxes to be gambling,” said an ESRB spokesperson in an e-mail to Kotaku. “While there’s an element of chance in these mechanics, the player is always guaranteed to receive in-game content (even if the player unfortunately receives something they don’t want).”

However, many countries disagree. Belgium’s Minister of Justice Koen Geens is already saying that he will try to ban the process of blind, randomized loot boxes completely.

A Hawaii state legislator, Chris Lee, recently held a press conference about EA’s new game. He assured his constituents that they would look into prohibiting the sale of games with gambling mechanics to underage kids. He also added that other state legislatures were considering the matter as well.

“This game (Battlefront II) is a Star Wars-themed online casino designed to lure kids into spending money. It’s a trap and this is something that we need to address to ensure that particularly kids who are underage who are not psychologically and emotionally mature enough to be able to gamble… from being trapped into these cycles,” Lee said.

These mechanics should create well founded concern, particularly in the heavily regulated U.S. gambling industry. As pointed out, gambling for money is not a special type of entertainment that triggers the brain in a unique way. Video game developers are mimicking the gambling mechanics that stimulate the reward center of the brain and are creating products that are effective substitutes and hijacking potential legal aged players.

Furthermore, due to the limited regulation imposed on them, they can implement other mechanics, such as including a skill element, to make their products even more attractive. Finally, they are also marketing to children who are at much higher risk to develop a gambling addiction that could create future financial burdens for the state.

While the two industries could work very well in tangent together, they are now at risk for cannibalizing each other. And the video game industry took the first bite.