Submission Date

4-28-2025

Document Type

Paper

Department

Business & Economics

Adviser

Rudolph Henkel

Committee Member

Leslie New

Committee Member

Scott King

Department Chair

Jennifer VanGilder

Project Description

This study investigates how the cash out feature in sports betting influences bettor reaction to loss and short-term bet likelihood. The cash out changes the mechanics of a sports betting loss outcome in several ways. By getting some of the bet’s stake back through a cash out loss, the transaction mimics a larger loss-smaller gain joint outcome as opposed to a single loss at the time of the bet’s placement. The cash out also introduces the opportunity for regret or positive counterfactuals depending on the cash outs “correctness”. Using survey data from college students responding to hypothetical betting scenarios, it was found that bettors react more positively to “correct” cash outs, where the bet would have lost had they not cashed out, compared to simple bet losses of the same net amount. Interestingly, “incorrect” cash outs, where the bet would have won had they not cashed out, significantly increased short-term betting likelihood when compared to simple bet losses of the same net amount. These findings suggest cash outs may provide sportsbooks with additional benefits beyond what was previously thought, by influencing bettor sentiment and behavior in ways that may encourage continued engagement. Implications for consumer protection and potential regulatory interventions are discussed.

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