EPISODE 239: CREDIT UNION CUSTOMERS AND THE GAMBLING BOOM

Wow.

[laughs] That's all I can say about that.

It really points to the fact that in the normal course of events, credit unions might be saying, "Okay.

Well, here's how you approach a mortgage," or, "These are some savings goals you can set based on the different types of vehicles we have available to us." But when I think about them giving advice or counsel on betting activity, I would have no idea where they would possibly start.

It's obviously a very personal subject for the person who's doing the betting, but also something that impinges on their finances.

Did you guys get any indication or come away with any takeaways in terms of what the financial institutions, the credit unions can be doing to help their customers?

Lou, this is Mitch.

I think first and foremost, our goal of all this is no judgment, right? People choosing to, you know, use gambling, I mean, it's entertainment, and so we don't judge how people choose to spend their money on entertainment, so that's up to them.

But I think what the data shows is that the more people are betting, we saw a direct correlation to lower checking account balances, right? I mean, literally we see that, you know, the heaviest bettors have half the balance in their checking account than the people that aren't betting, right? So that is a direct, you know, inverse correlation of the more you bet, the less you're gonna have in your checking account.

So what does that mean for credit union lenders, right? This is another deposit runoff scenario, right? This is another account that's competing for dollars in your deposit accounts there.

So we don't see the inflow back to the checking accounts that we see on the outflows.

And so, you know, maybe they are winning, but if they're winning, they're not moving it back to their checking accounts.

They're just probably using it for more gambling.

Again, that's a theory that the data doesn't show that, but the data does show that the money is not moving back into the checking accounts from those gambling accounts like it's moving out.

So, you know, that's, I think, one of the keys of what the data's showing around the impacts to the credit union.

This is Steven.

I'll build on that for a second and then talk a little bit about, well, okay, what do we do about it.

The first part would be that gap between the bettors and non-bettors and their broader deposit activity.

So yeah, we see that the heavy bettors have this, you know, over 50% lower deposits compared to others, which means they're not building their long-term wealth.

They don't have bigger savings accounts or certificates of deposits or other, other investments.

So that could be a question of and concern.

The good news is you can look at your data and you can see where this is happening, and you can think about things like, how could we intervene with financial education? I think Mitch nailed it.

Like, this is not about shaming anybody.

That's the last thing we wanna do.

Again, this is the cohort that we actually want to retain and grow, but how might you be able to reach out and engage related to financial education? And I mean, credit unions are great at financial education and great at helping people understand things like the power of compound interest and what that can mean for you over time in terms of your investments.

Wow.

[laughs] That's all I can say about that.

It really points to the fact that in the normal course of events, credit unions might be saying, "Okay.

Well, here's how you approach a mortgage," or, "These are some savings goals you can set based on the different types of vehicles we have available to us." But when I think about them giving advice or counsel on betting activity, I would have no idea where they would possibly start.

It's obviously a very personal subject for the person who's doing the betting, but also something that impinges on their finances.

Did you guys get any indication or come away with any takeaways in terms of what the financial institutions, the credit unions can be doing to help their customers?

Lou, this is Mitch.

I think first and foremost, our goal of all this is no judgment, right? People choosing to, you know, use gambling, I mean, it's entertainment, and so we don't judge how people choose to spend their money on entertainment, so that's up to them.

But I think what the data shows is that the more people are betting, we saw a direct correlation to lower checking account balances, right? I mean, literally we see that, you know, the heaviest bettors have half the balance in their checking account than the people that aren't betting, right? So that is a direct, you know, inverse correlation of the more you bet, the less you're gonna have in your checking account.

So what does that mean for credit union lenders, right? This is another deposit runoff scenario, right? This is another account that's competing for dollars in your deposit accounts there.

So we don't see the inflow back to the checking accounts that we see on the outflows.

And so, you know, maybe they are winning, but if they're winning, they're not moving it back to their checking accounts.

They're just probably using it for more gambling.

Again, that's a theory that the data doesn't show that, but the data does show that the money is not moving back into the checking accounts from those gambling accounts like it's moving out.

So, you know, that's, I think, one of the keys of what the data's showing around the impacts to the credit union.

This is Steven.

I'll build on that for a second and then talk a little bit about, well, okay, what do we do about it.

The first part would be that gap between the bettors and non-bettors and their broader deposit activity.

So yeah, we see that the heavy bettors have this, you know, over 50% lower deposits compared to others, which means they're not building their long-term wealth.

They don't have bigger savings accounts or certificates of deposits or other, other investments.

So that could be a question of and concern.

The good news is you can look at your data and you can see where this is happening, and you can think about things like, how could we intervene with financial education? I think Mitch nailed it.

Like, this is not about shaming anybody.

That's the last thing we wanna do.

Again, this is the cohort that we actually want to retain and grow, but how might you be able to reach out and engage related to financial education? And I mean, credit unions are great at financial education and great at helping people understand things like the power of compound interest and what that can mean for you over time in terms of your investments.