Recently, Israeli high-tech company Playtika made major headlines with their business success. Started in 2010 from Tel Aviv, Playtika is considered one of the tech stars of our Start-Up Nation.
Going public on Wall Street with a 17.11% growth on the first day of trading last Friday the 15th of January and with a market cap currently estimated at $13.052 billion, Playtika is now the 6th most valuable Israeli company trading on Wall Street. [Source]. Something that is highly celebrated in the media, portraying Playtika as a role model and ultimate business model for ”high-tech companies” to strive towards.
Playtika is a leading business on a global level in the ”social gambling business”, where users may bet virtual ”money” to win casino games, such as slots and various card games. A concept that has been largely invented and developed within Israel. Playtika’s revenue in 2020 was mainly from casino games (57%) and from ”casual” games (42%). According to Playtika’s CEO and founder, Robert Antokol, one of the three main possibilities of growth of the company lies within the growth of ”its strong and healthy games”. [Source].
But how healthy are these games?
Playtika’s main game, Slotomania is slot gambling disguised in a mobile app form. Or, as described in the app-store: ”Slotomania™ Free Slots: Casino Slot Machine Games”. A gambling app.
Playtika isn’t the only Israeli company involved with online gambling apps. Apparently, Israel — the high tech capital and Start-Up Nation — has for years been a world center of online gambling technologies. [Source]. Although online casino gambling is expressly forbidden in Israel, mobile apps seem to be able to avoid regulations. How? By offering and promoting their apps as free – thus not involved with real money -, but simultaneously limiting the free addictive content and offering premium options for — guess what — actual real money. As Playtika’s other founder Elad Kushnir said: “There is no money involved in any of the games we provide, so there is no issue as far as regulators are concerned. Our games are regular online apps that let users accumulate points, get virtual rewards, etc. This is social gaming, not online gambling.” [Source].
But, these apps are actual online gambling, not just regular social games.
Companies like Playtika – but also for example Moonactive – are therefore able to avoid the tight regulations — read bans — on online gambling. Thus, allowing for companies to rapidly grow even to the level of globally leading companies.
However, how free are these games really? The whole business model is involved around these simple step:
1. offer a free app
2. expose users to addictive content
3. limit the usage of the gaming content in the free edition
4. offer ”premium” content for actual real-world money.
Of course, this will not lead every user to pay for the app. But for many users, the addictive nature of the casino apps will lead to investing money into a gaming app. But: ”You will not win real-cash prizes, even though you pay in real–money to buy credit coins.”
This is also evident from the many reviews for Slotomania on the app store. A handful taken from the 30 most recent:
– ”This is a joke! ! ! So Addicting!”
– ”In the past, it seemed far to easy to go on a long losing streak that would deplete my bank dramatically. However, of late it seems that hasn’t been the case and the drastic ebbs and flows in payouts are far less volatile.”
– ”Fun game until you spend money, then you have to pay more and more to keep winning.”
– ”Way too addicting Way too expensive Calling this game free is borderline misrepresentation Because unless you pay to play your lucky if you get to play more 10 mins a day. This free game has cost me $275 just this week.”
To which companies have the easy way out with explanations such as ”As slots is a game of luck, the outcomes are random. Purchasing is just an option for players to progress faster than others.” (An actual reply from the Playtika customer service on the app store). But how fair is this progress and are these ”random” outcomes, when everything these days is based on algorithms and companies have ”customer services” and ”VIP account managers” in place to be able to sell the ”best deals for most spins” to frequent users?
Gambling addiction is a serious mental health issue.
Gambling may lead to serious addictions, through similar dopamine-reward systems in the brain as involved with alcohol or drug addiction (meth, coke, heroine, etc). And just as with other addictive substances, gambling first promotes the rapid and excessive release of dopamine: giving it that powerful rush of enjoyment and pleasure. However, the brain will then not only start craving for more, but will additionally develop a tolerance. Thus causing a vicious cycle of wanting to gamble more and more.
Gambling addiction is the most common impulse control disorder worldwide. [Source]. And gambling apps are taking a growing role, even found to be more dangerous than for example fixed-odds betting terminals. [Source].
From personal clinical experience, as well as from hearing many stories outside my clinical work of people that struggled with addiction, there is really no feeling that may be compared to that sinking further and further into a dark hole as often experienced by people struggling with addiction. It starts as fun, but how much fun is it still when it takes over your whole life and you lose everything you had? Because that’s where addiction ultimately leads to.
Addiction destroys lives.
Now, as for gambling apps. These apps might not cost money in the first place. But they for sure trigger the dopamine-brain circuits, that lead to addiction. Especially for the weaker in society, that might not have much financial stability or are struggling with other addictions, gambling apps are extremely harmful. Taking up more time, and pushing users towards the paid content. Deliberately, as part of the business model.
Because of the lack of regulations on mobile gambling apps, there is also less protection of vulnerable people in society. Not only for those prone to addiction and other mental health issues but also for children or teens. In addition, gambling through apps is regarded as more socially acceptable in our current day society than gambling in physical casinos and most certainly feels more comfortable and less scummy: gambling from your own couch vs massive slot halls or grimy poker tables? This difference in usage is even more exposed due to the easier access to mobile devices and thus mobile gambling apps.
So of course, it’s applause-worthy to have a successful business, especially when built from absolutely nothing, and especially when making it to the global top. However, not when a large if not main part of the business model is based on abusing the weakest in society by getting them addicted and spending more and more money on these ”strong and healthy games”.
Companies involved with gambling apps are well aware of their users. They should stop hiding behind euphemisms and different labels such as ”high tech”, ”social gaming” and ”gaming app creator”. And as for the rest of us, we have to stop seeing these companies as something to inspire towards. Or may I remind of the money-making machines involved with the binary options? [Source and source].
It’s (online) gambling. And it ruins lives.