Assessment of Financial Literacy and Financial Stress on Online Problematic Gambling Behaviour: In case of Jimma Town, South Western Ethiopia

Abstract

In Ethiopia, online gambling has grown substantially in the previous two years and this raised issues among stakeholders.  According to media reports, the establishment attracts children and encourages addiction. The Ministry of Women, Children, and Youth is also pushing for the firm to be declared illegal on the grounds that it engages in dangerous gambling. However, the National Lottery Administration has been maintaining that sports betting is not gambling and is governed by its rules based on licenses. Thus, the study aimed to assess financial literacy, financial stress on online gambling in Jimma Town. A cross-sectional research design was implemented over the course of one year to gather both qualitative and quantitative data from primary data sources. The convenience sampling method was employed to draw a sample from the target population. The sample population was uniformly allocated across all online betting establishments located in Jimma town by apportioning the overall sample size to each respective site of online betting within the town. Specifically, this resulted in 385 divided by 27, yielding 14 participants from each establishment, thereby ensuring the inclusion of 14 individuals who visited an online betting center for ticket procurement or payment purposes. Both descriptive and inferential statistical techniques were utilized to scrutinize the quantitative data utilizing the SPSS. The result of the study indicated that, financial literacy (FL), financial education (FE), and financial stress (FS) all have statistically significant effects on problematic gambling (PG) at a 5% significance level. This shows a statistically significant relationship between these variables. Financial resilience (FR) and attitude (AT) do not have statistically significant effects on problematic gambling (PG).The researchers conclude that individuals possessing financial literacy and education, who apply their expertise to engage in prudent financial decision-making, exhibit a diminished propensity to participate in gambling activities. The research indicates that financial literacy is inversely correlated with the frequency of gambling behavior. To articulate this more precisely, an advanced level of financial literacy, particularly with regard to investment wisdom, substantially decreases the incidence of gambling.