Signs Of Gambling Addiction In Robinhood App – Addiction Center

Last week Robinhood made headlines when a surge of stay-at-home traders manipulated the stock market. A forum called Reddits WallStreetBets coordinated a massive spike in a few struggling stocks. It caused a buying frenzy on Robinhood that raised $1 billion in new funds. Yet, while people focused on the money made, experts noticed monolithic signs of gambling addiction.

One of the earmarks of gambling is volatility. Some days you win a jackpot, and the next, you could lose $7,000. It is essentially what makes gambling so attractive. Unfortunately, it is a huge problem in the United States. Roughly 1% of adults are battling a gambling disorder, which is why researchers and competing companies are sounding the alarm on Robinhood. According to whistleblowers, the app is using exploitative practices to induce gambling in its users.

Much like gambling apps, experts claim Robinhood uses cues that promote addiction. The behaviors are similar to a gambling disorder. For example, when a new member joins the platform, an image of a digital scratch-off lottery ticket pops up on their screen. The picture is a welcome stub, a gift for joining Robinhoods community. The apps stub promises a free share of stock worth anywhere from $2.50 to $200. If the new trader wants the prize, they have to play by scratching off the image like a lotto ticket.

At first, the interaction seems harmless, even fun. Yet, Keith Whyte, the National Council on Problem Gambling executive director, warns that Robinhoods styling has features like common betting apps. He claims it encourages immediacy and frequent engagement. Through its design, Robinhood induces dopamine rushes (pleasure neurotransmitter).

By promising a free yet unknown gift, the company immediately triggers dopamine responses among their new users. The trigger is what keeps them coming back.

Some of Robinhoods many alleged dopamine inducing features include:

Research indicates that a flow of uncertainty and rewards hooks users. Much like drugs or alcohol, incertitude stimulates the brains reward system. Over time this repeated exposure can lead to addiction. Other studies show that volatility can even enhance cravings or the desire for drugs. The markets waves and Robinhoods fun interface are keeping users too loyal.

Through its charming elements like one-click trading and playful phone notifications, Robinhood has lured over 13 million customers. The apps simplicity and graphic design make trading feel like gaming. The platform has drawn in young investors by presenting complex financial instruments like a fun game. Unfortunately, financial experts believe that instead of helping users, the app is purposely downplaying trading risks. They suspect it to be a method to get users hooked to their platform.

Inexperienced investors are not actively warned about financial dangers. Instead, the apps design is drawing them to the riskiest forms of trading like options. The app also highlights more risky investments with dazzling neons like cryptocurrencies. Suppose the apps founders truly wanted to promote intelligent investing. In that case, theyd encourage safe opportunities like an exchange-traded fund (ETF) instead. Instead, Titan co-CEO Joe Percoco believes investors are being given a, fast new car, without driving instructions.

The zero-commission brokerage allows you to trade instantly with no minimum deposit. At first glance, the innovative app sounds like its helping democratize investing by not charging fees. But many believe its a strategy to induce more addictive trading (a source of income for the app). According to filings, Robinhood received $18,955 from trading firms for every dollar in the average customer account. Schwab only received $195 for the same deal.

The problem with zero commission trading is that it allows users to trade as often as they want. So users can sell or buy the minute their stocks go down or up. This form of trading is correlated with gambling behaviors. Dave Guarino, a product lead at the California Office of Digital Innovation, believes that Robinhoods goal is not to shift capital gains to everyday peoples hands. He thinks they are monetizing on gambling impulses.

This past week, people caught their first glimpse of the potential gambling issue within Robinhood. For years experts have warned the public about the brokerages questionable practices. Like the Titan, co-CEO Percoco noted, Robinhood is designed and makes money based on clients trading addictively. This is horrific. Robinhood is drawing millions of users to their platform through a gamification style. By downplaying trading risks, their methods are allegedly encouraging more trades. Overtime, users get hooked and the app makes more money. This dilemma is a severe problem that can lead to a rise in gambling disorders. Hopefully, researchers can get more information on Robinhoods alleged suspicious practices soon.

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Signs Of Gambling Addiction In Robinhood App - Addiction Center