Gamification: A New Form Of Predatory Finance
Fintech for good? Not always; sometimes, it's truly evil.
This paper is shocking and shows how gamification has been subverted from a tool for the “democratization of finance” into something far more sinister: a tool of predatory finance that exploits vulnerable users.
The paper “Hooked and Hustled: The Predatory Allure of Gamblified Finance” will soon be published in the forthcoming at Columbia Business Law Review and dispassionately how “fintech for good” is often a slogan and not a reality.
The paper shows how digital trading platforms morph into predatory arenas by leveraging tactics borrowed from gambling and addictive gaming.
“The platforms intentionally design their interfaces to mimic the rush of casino games and immersive video experiences—using rapid-fire push notifications, instant rewards, dynamic visuals, and competitive leaderboards—to create a financial environment that seduces users into risky, impulsive decisions.”
Even worse: amplification of trading overlaps with predatory practices that disproportionately exploit vulnerable users, including those with limited financial literacy, women, and younger participants.
If that doesn’t shock you and sicken you nothing will.
👉Stunning quotes from the paper:
🔹 Mobile trading apps:
“Indeed, despite their proven benefits in other contexts, gamification and digital persuasion may be misapplied in the retail investment context, particularly when combined with social media, which raises concerns over information asymmetry, questionable social influence and manipulation, and even free speech.
🔹 Payment for order flow (PFOF):
“The PFOF model, which may incentivize brokerages to promote frequent, high-risk trades, remains a subject of debate. Regulators have yet to reach a consensus on whether to ban PFOF outright, given its purported benefits in reducing market entry barriers and encouraging retail participation.”
🔹 Robinhood:
“Robinhood has perhaps been the most widely discussed example of gamification in finance. The platform has gained notoriety for its use of celebratory animations, such as confetti bursting across the screen after a trade has been completed. This seemingly innocent design choice has been a classic example of using instant rewards to create positive reinforcement. By associating the act of trading with a dopamine-triggering celebration, Robinhood has effectively encouraged users to trade more frequently, prioritizing the excitement of the platform over sound financial decision-making.”
🔹 eToro:
“Thematic investing has added a gamified layer of storytelling, where users feel they are part of a larger trend or movement. This has made investing more engaging but can also lead to impulsive decisions driven by narrative appeal rather than sound financial analysis.”
🔹 WeBull
“Building up on Robinhood and eToro features and design, Webull has also implemented gamification-based concepts in its platform by integrating community-driven features like leaderboards and social trading that appeal to competitive instincts and foster social validation. This leaderboard system has incentivized risky behavior, as traders chase top spots by engaging in short-term, high-frequency high-risk trades.
🔹 Binance:
Binance, a leading platform in the cryptocurrency space, has also embraced gamification to drive user engagement. The platform has frequently hosted trading competitions… These competitions have been structured to reward those who engage in high-frequency trading, often at the expense of careful analysis and risk management. By framing trading as a competitive event, Binance has encouraged users to adopt behaviors that are more akin to gambling than investing.
🔹 Crypto:
Crypto exchanges have focused on user-friendly interfaces, often at the expense of robust consumer protections. This shift has contributed to a “buy-now-learn-later” mindset, where many investors lack a clear understanding of the assets they hold.
Likewise, the risks associated with gamification have been exacerbated by a widening “financial advice gap.” As access to traditional financial guidance has decreased, gamified platforms have pushed consumers toward high-risk assets like cryptocurrencies and NFTs – for instance, such investment options can be presented in a more visually striking, lively, colorful, and cool manner in the app interface – leading to behaviors more aligned with gambling than investing.
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