You’re sitting with your executive team, reviewing the business goals for the quarter. There’s an air of confidence. Commercial targets have been set, the legal team feels secure about navigating the latest regulations, and the product team is excited about the upcoming feature launches.
But beneath the surface, there’s a hidden problem that almost certainly affects every decision being made: anchoring bias.
Anchoring bias is a well-documented cognitive bias that has been empirically researched for decades. Studies show that it affects 80-90% of people across all walks of life, and it’s particularly dangerous in business.
This bias causes individuals to latch onto the first piece of information they encounter—known as the “anchor”—and it can shape all subsequent decisions, even when new, more relevant data emerges.
In our work with iGaming businesses, we’ve consistently seen how anchoring bias impacts decisions at every level, often leading to flawed strategies, unrealistic expectations, and missed opportunities.
Here’s how this bias shows up in iGaming and, more importantly, how to combat it effectively.
1. Commercial: Setting Unrealistic Targets Based on Outliers
You’ve set ambitious revenue targets for the quarter, largely driven by last year’s exceptional performance, which was significantly influenced by a few high-value VIPs. But here’s the issue—those VIPs were outliers, and most of them are no longer active with the business. Despite this, the budget has not been adjusted accordingly.
Anchoring bias has caused your commercial team to fixate on those outlier figures, leading to unrealistic expectations.
The current targets are based on past performances that no longer reflect the reality of your player base. As a result, the entire team is under immense pressure to meet targets that are likely unattainable, risking disappointment and strained resources.
This focus on exceptional cases distorts your understanding of what’s realistically achievable, setting your commercial strategy up for failure.
Solution: Set regular checkpoints to review and adjust revenue targets using up-to-date data. Ensure that your team is incorporating insights from the broader player base, not just a small group of outliers.
Use multiple data sources to create a more balanced and realistic target. Most teams think they’re already doing this, but in practice, they often aren’t.
Data Insight: A PwC study found that businesses that routinely adjust commercial targets based on broad data sets, rather than outliers, saw a 20% improvement in meeting their revenue goals.
2. Legal: Over-Focusing on Initial Regulatory Interpretations
Your legal team is tasked with ensuring compliance, but they’ve anchored on their initial interpretation of new regulatory requirements.
They’ve built their entire strategy around this first interpretation, failing to adapt to subsequent guidance or new insights from competitors in the marketplace.
This rigid approach could leave your business vulnerable to regulatory risks or competitive disadvantages as the market evolves.
In a fast-paced industry like iGaming, regulations are constantly being updated, and competitors are quick to adjust.
Anchoring on outdated information could mean your legal strategy falls behind, exposing the company to fines or sanctions.
Solution: Encourage your legal team to regularly re-evaluate their understanding of regulatory requirements as new guidance becomes available.
Build a framework that requires them to compare their interpretations with industry best practices and competitors, ensuring that your strategy stays adaptive and compliant.
Industry Insight: According to Deloitte, companies that actively adapt their legal strategies to reflect updated regulatory insights are 30% more likely to avoid fines and compliance issues.
3. Product: Over-Relying on Internal Expertise Over Player Data
Your product team is confident in their expertise—they’ve been developing games and features for years. But their reliance on internal product knowledge could be anchoring them to a narrow view of what works, without considering the broader patterns of player behavior.
Anchoring bias might lead them to dismiss insights from other departments, such as CRM or marketing, who have a better understanding of how players are interacting with the platform.
The result? Your product strategy may end up out of touch with player needs, leading to underperforming features and missed opportunities.
Solution: Ensure that your product team regularly collaborates with departments that analyze player behavior, such as CRM and data analytics. Introduce a decision-making process that requires teams to consider multiple data sources before finalizing product features.
This helps break the anchor of internal expertise and aligns product decisions with real-world player behavior.
Industry Insight: A Forrester report found that companies that integrate cross-departmental data into product development see a 25% increase in player engagement and feature success rates.
Overcoming Anchoring Bias: Practical Steps for Your Business
Anchoring bias can quietly skew decisions, but with the right strategies, you can ensure that your teams remain flexible and data-driven.
1. Regular Strategy Checkpoints
Set routine review sessions for commercial, legal, and product strategies. These checkpoints allow teams to adjust their approach based on fresh data and updated market conditions, preventing them from being locked into initial assumptions.
2. Encourage Re-Evaluation of Decisions
Make it a practice for teams to re-evaluate decisions as new information becomes available. Whether it’s adjusting revenue targets, revisiting regulatory strategies, or refining product features, re-evaluation keeps your teams adaptive and aligned with current trends.
3. Use Multiple Data Points
Encourage teams to rely on a wide range of data sources when making decisions. By using multiple data points, you prevent teams from becoming anchored to initial inputs and ensure a more comprehensive, balanced strategy.
4. Hire Experts Who Can See Through the Biases
If you’ve recognized any of these behaviors in your business, it’s likely that knowledge alone won’t be enough to drive meaningful change.
This is often due to the “knowledge-action gap bias”—a common phenomenon where individuals or teams have the right information but fail to act on it. This gap can result from inertia, fear of change, or simply feeling overwhelmed by the complexity of execution.
That’s why many forward-thinking, data-driven companies in the iGaming industry are turning to Bet Data Consultants. We understand that having the right strategy is only half the battle—what truly counts is execution.
As the only iGaming consultancy that combines cutting-edge strategies grounded in world-class behavioral science with over 15 years of industry expertise, we specialize in bridging the gap between knowledge and action.
We transform insights into profitable results, ensuring your business not only makes informed decisions but also implements them effectively for long-term success.
Final Thoughts: Flexibility Fuels Success Anchoring bias can quietly derail your business strategies, leading to unrealistic expectations and outdated approaches. By regularly reviewing strategies, encouraging re-evaluation, and leveraging multiple data sources, you can keep your business agile and responsive to the ever-changing iGaming landscape.
Let Bet Data Consultants help you challenge your assumptions and build more resilient strategies. Contact us today for a free consultation and take the first step toward smarter decision-making.
Sources:
- PwC, Study on Commercial Targets, 2022.
- Deloitte, Legal Strategies and Compliance Report, 2021.
- Forrester, Cross-Departmental Data Integration in Product Development, 2022.
