Hooked and Hustled: The Predatory Allure of Gamblified Finance Nizan Geslevich Packin, Doron Kliger, Amnon Reichman, Sharon Rabinovitz

Abstract

This Article examines the growing phenomenon of “gamblification” in financial markets, where platforms like Robinhood, Webull, and crypto exchanges increasingly turn investing into a high-stakes game. By integrating gambling and gaming elements from video games—such as nudging, instant rewards, immersive visuals, and feedback loops—these platforms lure users into treating trading as a thrilling adventure rather than a financial decision. The result is a new breed of retail investors driven by the excitement of "leveling up" rather than informed financial judgment, blurring the line between prudent investing, online gaming, and reckless gambling. This Article introduces a systematic description of gamblification techniques that reveal how platforms exploit behavioral psychology to create engaging but somewhat predatory trading experiences. These features—designed to trigger dopamine rushes and exploit decision-making shortcuts—push users, particularly those with lower financial literacy, into cycles of excessive trading, impulsive decisions, and escalating risks. The gamblified environment fosters a competitive culture where users, influenced by leaderboards; peer pressure; influencers like the meme stock star Roaring Kitty, who returned on social media in June 2024; and social dynamics within communities like Reddit’s WallStreetBets are more likely to take on financial risks that they do not fully comprehend. Particularly concerning is the growing trend of retail investors placing more trust in financial influencers than in their own family, friends, or even economic experts. This trend is especially alarming when considering a recent survey that found one in three respondents cited popular financial influencers as the most significant factor driving their trading decisions.

This Article moves beyond behavioral analysis to expose the darker implications of this convergence of gaming, gambling and finance. It argues that the gamblification of trading overlaps with predatory practices that disproportionately exploit vulnerable users, such as individuals with limited financial literacy and younger participants, as well as women. Findings that were publicized in Summer 2024 by the UK’s Financial Conduct Authority underscore the risks of digital engagement practices like push notifications and prize draws, which have been shown to disproportionately increase risky trading behaviors among these groups. This blend of entertainment and finance raises serious concerns about exploitation, where platforms profit from heightened engagement while exposing users to significant financial risks. In assessing the regulatory landscape, this Article explores how gamblified finance challenges existing securities laws, intersects with gambling regulations, and implicates consumer protection standards. It contends that current regulations inadequately address the design choices that drive these platforms’ predatory practices, permitting harmful financial inclusion under the guise of democratized access. To address these issues, this Article offers forward-looking policy recommendations that balance expanding financial access with the imperative to protect users from exploitation. Without decisive regulatory action, the gamblification of finance risks transforming trading into a dangerous mix of entertainment and predation, undermining market integrity and exposing retail investors—especially the most vulnerable—to serious financial harm.