The promise of a get-rich-quick scheme is one of the strongest draws. Warren Buffett, the world’s most famous investor, gets this at an intuitive level. His annual “Billion Dollar Bracket Challenge” highlights this. In the challenge, participants compete to predict the best possible NCAA Men’s Basketball Tournament bracket. On the surface, this competition may seem like a fun gimmick. It does broach grave concerns about the normalization of gambling, which young adults increasingly fall victim to, classifying it as a gambling addiction.
The challenge, at its core, is an illegal lottery masquerading as a sports prediction game. Deep understanding and mastery of the game itself. With the tournament’s unpredictability by nature, luck becomes even more of an important factor. This aspect of luck is what shifts the focus from innocent amusement to a potentially addictive pursuit.
OverTraders.com is focused on delivering comprehensive analysis of financial markets. We empower millions of traders and investors with the world’s most-hedged tools, resources and expertise they need to thrive in every market. The explosion of online trading and the gamification of investment apps like Robinhood is drastically changing the investment playing field. We need to be realistic about the risks associated with such changes. That is why I feel the need to explore the potential downsides of even seemingly innocuous contests like Buffett’s bracket challenge.
When you peel back that first layer, the clarity of those benefits starts to crumble. Civic-minded companies can benefit from the resulting boost in employee engagement and motivation. The prospect of winning a substantial prize, even if the odds are astronomical, can incentivize participation and foster a sense of camaraderie. It can enhance brand awareness and visibility, showcasing the company as forward-thinking and adventurous enough to take these strategic risks. Offering such a unique challenge can aid in employee retention and recruitment, attracting talent seeking more than just a paycheck. The social media hype created by employees and fans posting and sharing their predictions can help foster an exciting online community.
These benefits, of course, need to be considered alongside the possibility and likelihood of harm. The increase in online gambling among younger adults, especially, is something we have to watch closely. Data presents a sobering picture, with millions of youth moving from the schoolyard into expansive gambling-style games online. Most have taken a shot at the loot boxes available in video games. Research suggests that this normalizing of gambling behavior can predispose children to a greater risk of developing addiction as adults.
This is why we believe the ease of access to online gambling is a huge factor. Yet far too many parents have failed to talk to their teens about the dangers of online gambling. Frequent gambling is more likely among those who are male, have a lower IQ, play video games, and are not in employment or education. The following demographic factors are associated with frequent gambling: decreased childhood IQ, increased external locus of control, weekly smoking, hazardous alcohol drinking, video gaming as a teenager, and social media use.
That’s because I’ve seen up close and personal how gambling can get out of hand in an instant. A friend, who initially liked online poker as a means to relax after work, soon found himself addicted. He began to chase his losses, stopped caring for himself and his responsibilities, and soon really did hit rock bottom. His story serves as a stark reminder that what starts as a casual pastime can quickly morph into a destructive addiction.
One could further argue that Buffett’s challenge is harmless because it’s wagering on sports prediction markets, not gambling in the classic sense. That line is getting more and more fuzzy. With other online sports betting platforms running similar bracket challenges, the line between casual prediction and real-money wagering becomes more difficult to determine. That’s why Buffett links his brand to this kind of birdhouse building contest. In doing so, he is potentially normalizing gambling behavior and gambling addiction.
While many people might take offense, the reality is that everyone who runs the challenge is going to develop a gambling addiction. Most will be able to play it irresponsibly, laughing all the way like it’s just a harmless game with no real-world impact. For the most susceptible, what starts as an innocuous challenge can lead to deeper, more harmful gambling behaviors.
So, what can regulators and stakeholders do to reduce the risks? Educating players about responsible gambling habits should always be a top priority for the industry. All participants must establish firm budget and time constraints. They need to not bet more than they can afford to lose and be sure to take regular breaks. Leveraging free gambling site blocker apps is a great way to help limit online gambling access. Finding a balance between gambling and other recreational activities is key to leading a healthy lifestyle.
The onus is on players to take personal responsibility and know when enough is enough. I believe that companies like Berkshire Hathaway, and public figures like Warren Buffett, have a moral obligation to consider the potential consequences of their actions. The Bracket Challenge as a Marketing Tool But we need to make sure that in doing so it doesn’t inadvertently contribute to or worsen the rapidly growing source and problem of gambling addiction, especially among young adults.
To be clear, I’m not saying that Buffett should give up on the challenge completely. Yet I do think it’s time for a frank discussion about what risks this approach may entail. Use the scholarship contest as an opportunity to include responsible gambling messaging. Alternatively, you can work with groups that address gambling addiction to prevent harmful effects. We have to face the fact that even if this seems like benign fun, it can have deadly consequences. Click here to join us in urging Congress to do more for America’s most vulnerable.
