By Tommaso Mambrini, LL.M. Candidate, 2026
Platforms like Robinhood, Webull, and crypto exchanges are increasingly turning financial investing into a game, using elements taken from the gambling and video game sector such as nudging, interface designs that subtly steer users toward specific actions, confetti animations that celebrate completed trades, badges that mark milestones or achievements, and more, all aimed at keeping users engaged and encouraging repeated activity.
These techniques, collectively known as digital engagement practices (DEPs), are designed to draw the attention of users, lowering psychological barriers towards investing and attracting new investors. But DEPs are also encouraging behavioral biases that can lead to impulsive trades.
Regulators are now worried by the effects that DEPs have on consumers’ investment behaviors, especially younger consumers. A research performed by the UK Financial Conduct Authority (FCA) has revealed that push notifications and prize draws, two types of DEPs, increased the trading volume, by 11% and 12% respectively.
The same study also found younger participants (aged between 18 and 34) increased their end-of-trading portfolio riskiness by more than older participants (aged 35+) across all DEPs (except flashing prices).
At this point, given the impact of this phenomenon on users, what measures have been taken to combat it?
United States: Limited Regulation
In January 2024, Massachusetts Securities Division charged the trading platform Robinhood—known for adopting gamification techniques—with violating the Massachusetts Uniform Securities Act and the Massachusetts Fiduciary Rule.
The State argued that Robinhood’s gamified features, including confetti animations, lottery style stock rewards, curated lists of popular stocks, push notifications, and a “tapping” game to climb a wait list, trivialized investing and nudged customers toward frequent trades that benefited the trading company, thus breaching Massachusetts Fiduciary Rule. This fiduciary rule requires brokers to act with utmost care and loyalty, making recommendations without regard to their own interest. The Division concluded that Robinhood’s digital interface and marketing features breached its duty to act in accordance with fair and ethical standards by encouraging frequent and risk-laden trading behavior among inexperienced investors, primarily through gamified design elements and inadequate supervisory controls. Robinhood settled the case for about $7.5 million and removed the contested features.
The Robinhood case highlights the fragmented U.S. regulatory landscape. There is currently no federal statute that explicitly governs gamified trading. In 2023, the Securities and Exchange Commission (“SEC”) proposed a rule requiring brokers and investment advisers to identify and neutralize conflicts when predictive algorithms or interface designs favor the firm over investors.
Predictive algorithms are designed to help guide or forecast customers’ investment behaviors. SEC Chair at the time, Gary Gensler, observed that conflicts may arise to the extent that advisers or brokers are optimizing to place their interests ahead of their investors’ interests. In practice, such algorithms can encourage users to trade more frequently, rather than promoting saving or long-term financial welfare. The proposal drew significant criticism from industry groups and commentators for being overly broad and vague in defining what technologies would be covered. Facing this backlash and legal uncertainty, the SEC ultimately withdrew the proposal in June 2025, leaving the future of predictive-analytics regulation uncertain.
Congress has shown limited interest in the topic. A bill proposed in 2021 titled the “Trading Isn’t a Game Act” would require the Government Accountability Office to study the impact of gamification on investors, but it has not been enacted. Other proposals concerning related regulatory constraints (such as the Protecting Innovation in Investment Act) have been proposed but no broadly adopted legislation has yet passed the U.S. Congress that directly regulates the use of predictive analytics or interface design in brokerage platforms. Federal consumer regulators, such as the Federal Trade Commission, have raised concerns about “dark patterns” in the context of investing such as design choices that exploit cognitive biases and manipulate customer behavior. But the FTC has not brought any enforcement actions specifically targeting brokers or investment platforms for gamified interfaces. Consequently, oversight of gamified trading depends on state level actions, general anti-fraud rules (e.g., SEC Rule 10b-5), fiduciary duties, and industry self-regulation.
European Union: Ex Ante regulation
On the other side of the Atlantic, the European Union is embracing a preventive approach. In December 2023 the European Securities and Markets Authority (ESMA) issued a discussion paper on digitalization of retail investment services, seeking feedback on digital marketing, influencers, social features, nudging techniques, gamification, and dark patterns. ESMA emphasized that investment interfaces must not distort decisions and that information should remain clear and accessible.
Moreover, in May 2023, the European Commission proposed the Retail Investment Strategy (RIS) that, if approved, would require all marketing communications—whether via apps, social media, or influencers—to be fair, clear, and not misleading. This approach aims to hold firms accountable for the entire digital engagement chain. These proposals, still under negotiation, reflect a proactive strategy: setting standards before harm occurs and coordinating rules across the single market.
The European Union is also targeting “zero commission” trading a model often funded by payment for order flow (PFOF), where brokers route client orders to market makers in exchange for rebates. Critics argue that this practice creates conflicts of interest and treats investors as the product rather than the customer. While PFOF remains widespread in the United States, the EU’s Retail Investment Strategy (RIS) proposes to ban it from 2026, aiming to align brokers’ incentives with those of investors.
Balancing Innovation and Investor Protection
Gamification can democratize investing by making financial apps intuitive and engaging, but it also encourages excessive trading and risk taking, particularly among younger and less experienced investors. Platforms are transforming the investing decision making process in a high stakes game, thinning the boundary between gambling, gaming, and investing.
The regulatory divergence between the United States and EU reflects different philosophies. The United States emphasizes market freedom and relies on subsequent remedies—i.e. litigation, enforcement actions—while the European Union favors harmonization and consumer protection. Both systems, however, recognize that design choices and the use of DEPs shape investor behavior. As gamified finance evolves, regulators on both sides of the Atlantic will need to continue gathering behavioral evidence, refine rules to address social media driven investing, and coordinate policies to strike an appropriate balance between innovation and investor protection.