The Psychology of the GameStop Saga

My brother, a CFO, asked for my take as a therapist on the psychology of young adults who bet big — and lost — on GameStop.

The GameStop saga reveals the psychology of individual actors desperate to break down a system of exploitation. Systems speak in gentle nudges, informal policies, and procedural pivots designed to distract us from the sleight of hand at play. What results is a magic trick — influence — revealed only when one becomes fluent in this language.

The first time I saw this sleight of hand trick was at a casino. My brother and I were young and bored and visiting family in Nebraska, so we drove to an Iowa casino on a whim. What do I recall most vividly?

The pensioners at the slot machines.

Ask anyone about the first time they set foot in a casino; most can recall their first glimpse of the slot machines. The pensioners glued to the slots; the focused, vacant eyes; the cigarettes turning to ash; the gentle rattle of coin cups, dipping in after each loss. Each coin, a promise, a possibility. There’s an intensity you feel — the sense of someone who is hungry, searching. You sense, at once, that you must not come between them and the slots.

The first time you see it — the slots — it’s a bit of a shock. The second time you go to a casino, you know how to distance yourself. You compartmentalize. But that first time brings up complex emotions. Some people feel pity. Others, disgust.

You might think, “Gosh, that could be my grandma, my grandpa,” and a sickening feeling arises.

But then you comfort yourself — they don’t look like grandma or grandma. Not yours, at least.

Then we pull back and reflect on the levers, the de facto policies, the nudges — the systems at play. This is about individuals, yes. And it is also about systems.

Individuals are downstream. Systems are upstream.

Corporations develop strategic plans to attract the most vulnerable people — to get them through the casino doors, right to the slots. They charter private buses to bring people straight from assisted living to the casinos. It’s like a group vacation (and sometimes, it’s sold as a vacation). Mailers and marketing materials extend the promise of comfort and support. The casino offers a sense of place — a place to numb out, to “win,” to lose while feeling a sense of control. To enjoy the temporary salve of distraction from grief, loss, and loneliness.

The gambling industry tells us they’re helping older adults. That this is a necessary service. That they aren’t exploiting grief and loneliness, but rather, are treating it. And senior citizens go along with it, right? After all, they keep coming back. Working-age adults reassure themselves that seniors are making informed decisions — that free will is at play.

But the reality of “choice” is sleight of hand, an illusion. Hidden constraints and determinants are end-stage outcomes, downstream. The urgent question of free will — of informed consent — requires upstream analysis.

Hold the image at the right distance — with a soft focus, like a magic eye poster — and a pattern begins to take shape: one of exploitation.

Upstream, we begin to see the drivers: why this has come to pass, why older adults are targets.

Older adults navigate structures and institutions designed to devalue their worth. Our culture of ageism and ableism tells us that the best person — the most worthy person — is one who works, who makes money.

We, the working-age adults, see nothing of worth in our elders. We don’t value their stories. Instead, we sideline them, ice them out of community. And while we may accept their help with childcare (especially in the early years), God forbid they offer input on how to raise our children.

And once older adults reach a certain level of physical need, or once their minds “start to go,” then we, the working-age adults, face an impossible dilemma.

Downstream, we, too, are living in overwhelm.

We are trying make a living, to raise children, to pay the bills, to survive.

And so we design systems born of our overwhelm.

We isolate the most vulnerable. Our intentions are good.

We design systems of exclusion, and then feel perplexed: why are non-working adults unhappy, lonely, and desperate?

Because life in our country seems to be a game of winners and losers. And each person must survive. It breaks our hearts, but what can we do?

At our core, each of us needs a sense of meaning and a feeling of belonging. Only then can we have a sense of purpose. Without meaning and belonging, we become fearful. Lonely. We get stuck in our heads. No one listens to us. No one cares. We’re untethered. Anxious. Irrelevant.

And then the bus shows up to bring us to a party, which happens to be at the casino.

At the casino, you can be with others, make money, enjoy the free buffet.

Casino attendants smile, look you in the eye; you are important.

The cashier talks to you with warmth as you buy chips, as you cash out.

You sit at a slot and feel enlivened, excited.

The first time you win, you realize, “Something is possible here, something good,” and so you keep coming back.

You don’t even care about winning — not in the primary sense. You care about this activity where you matter, where you are important.

You know it’s an illusion, but you see magic because you want to believe.

And the house always wins, because the system exists to exploit.

New, inexperienced traders lost money on big bets — but to whom and why? As a therapist, I work with a fair number of hobbyist day traders. Many are quite successful. These day traders aren’t the ones who lost big on GameStop. They didn’t even follow the GameStop story. They aren’t buying Dogecoin. They aren’t using Robinhood. They already have brokerage accounts.

The young people who lost big — who now are grasping for the next big bet, or a salve for despair — are playing the casino slots, hoping to win, searching for a sense of control.

And when they lost big, they tried to figure out what happened upstream. Who is to blame? This is a moment ripe for conspiracy theories. Some stopped the stock frenzy. Others are still in.

But why are young, working-age adults falling for this?

Millions of young people, millennials — and soon enough, Gen-Z — will never be able to buy a home. They’ll never get to retire. They’ll never get married, because they are so deep in student debt. If they’re lucky, they are currently stuck in a stable job with deflated wages. The less-lucky are cashing unemployment checks while they sit, sidelined, isolated in the pandemic. The unlucky are desperate.

How can young people feel a sense of control as they face down a lifetime of climate doom and crumbling infrastructure?

How can they protest the way some of our largest tech companies are becoming a form of government?

How can they participate in democracy when some of the largest corporations are capable of exercising more power than the US government — much like the East India Company at times overshadowed and directed the activities of the British Crown?

No one is listening to these young people.

No one cares.

No policy is designed for their benefit (or, if it is, then it is very difficult for young people to perceive the benefit).

This promise started in grade school: work hard, earn rewards. But the rewards are elusive. The rewards never come. There are certain types of people, certain groups, whose lives we treat as expendable. Whole cohorts of working age adults may work hard, but we shelve their suffering away, render them invisible. Just like older adults. Just like people accessing disability benefits. Just like people in poverty. No politician is speaking to them. No system seems to be delivering on their behalf.

But then a bus came to pick them up.

They heard tips from Reddit.

They followed r/wallstreetbets.

They got Gamestop, put their cash in.

And they heard, internalized, and lived out the rallying cry, “Hold your position. DO NOT SELL.”

That’s the price of admission, to buy and hold. To join a community where there is a sense of agency and belonging, one must buy and hold. That’s the hazing ritual, the test of true membership.

Now they are part of something. Now they are on a bus with others, hopeful, driving to the same casino. Now they’re playing a game, alone, but they’re with others who play the same game; in a way, they are together.

Now they have a shiny slot machine in an app, with ticking graphics and pulsing numbers — higher, lower. They push buttons, see graphs change. They are impacting the world. Their actions are important, meaningful.

They get dopamine. They get adrenaline. Dollars come and go. They hold. They lose. And research shows that even when we lose at a slot machine, our brain registers a win when that loss is gamified.

They check Reddit, and people keep telling them to hold. And why shouldn’t they hold? Intermittent variable reinforcement is now in full effect.

They’ve sunk the costs.

Some become evangelists for the cause — to buy, to feel empowered over the markets, to hold. They start recruiting. That’s how they can make their money back: recruit. That’s how they will expand the community, redistribute the riches, and take the system down.

But they lose money as they hold the bag.

Why, they wonder? They’re told it’s because of a bigger conspiracy; they hear stories about people who betrayed “the community”; they’re reminded that hedge funds rig the game. They sue Robinhood. They look for someone to tell a story to make sense of it — this loss — for someone to explain this horrible trick. And Wall Street regulators are clawing back. And the rich got richer. The house won.

Years ago, my brother and I visited the Yukon Territory, the location of the tragic gold rush.

We took a thrilling train ride into Skagway. Our train climbed cliffs as we overlooked the Dead Horse Trail — the narrow, impossible path prospectors took in pursuit of gold. Prospectors hiked with 2000 pounds of supplies they could barely afford — the price of entry to mine for gold.

This — the 19th century lust for gold, the hungry pursuit of it — was a tragic waste. Of the 100,000 people who attempted to prospect in the Yukon Territory, only a few found gold. Thousands of animals and countless people died. Who won? The middlemen — the handlers, the suppliers, the brothel owners. Prospectors became objects of ridicule, fanatics to exploit.

But those who cast judgment on prospectors fail to appreciate the upstream context of the 1890s. Mining for gold was the final absurdity of the wretched Gilded Age — a time of growth, corruption, and staggering inequality.

The Gilded Age embraced inequality with religious zeal.

Waves of European immigrants from places like Ireland, Italy, Poland, Hungary, Russia, and Greece faced extreme xenophobia.

And xenophobia wasn’t about common citizens being mean. Xenophobia was the metric of government success — the primary driver of policy.

Reconstruction disenfranchised Black Americans after the Civil War.

The Chinese Exclusion Act in 1882 banned people based on nationality while harming People of Color, whites, and the American economy.

In the Gilded Age, the government systematically destroyed Native communities, granted farmers access to huge tracts of formerly indigenous land, then sat back while farmers were subjected to wave after wave of unfathomable hardship — often exacerbated by punishing government policies.

Public health was of no concern. In Chicago, the dangerous meat packing plants were in full-swing, decades before The Jungle was published. The average American lived in deplorable conditions, and millions died of preventable disease.

And yet — even then, systems blamed individuals for their hardships, evading their own responsibility.

What is it that works for everyone? Much like citizens trapped in the Gilded Age, we are trying to survive. Fear inflects the collective experience, even among the most advantaged — the upper middle class, the rich. Why? Because things are not working. Because inequality breeds fear.

To find our way out, we must reveal the systems at play. We must go upstream. Instead, we’ve wasted decades psychoanalyzing downstream users: their individual choices, their dispiriting outcomes.

In all our analysis, we have yet to find a way to create space for the young person who put a big bet on GameStop, who didn’t have money to spare, who lost it all. We have yet to create space for the pensioner at the slot machine, the gold prospector.

Why can’t we feel compassion for people we marginalize?

We can’t imagine feeling compassion for anyone — especially ourselves. We’re in survival mode. And so we make foolish, well-intentioned attempts to change individual people rather than systems. And the most foolish thing a well-intentioned person can do is shame an individual who seems to be using poor judgment.

Scolding people with “knowledge” is not only disrespectful — it’s dehumanizing. Each of us deserves better.

Even if we aren’t policy makers, each of us is an individual who is in community with others.

We may be in physical isolation, but what the GameStop saga reveals is the potential power of the collective. Will we use our collective power to exploit one another downstream, or will we commit to finding a way out of our collective scarcity?

Each of us can create pathways to help people feel seen and known. Together, we can change the upstream forces. This, in my mind, is the commitment the American Dream has yet to realize — a dream where we can be in a society that works, in community with others.

So long as our compassion extends only to certain people — to people who seem to count, who the system says should matter — then our fate is to cycle through unequal growth and corruption, to drown in the chaos together.

In that way, the GameStop saga is an invitation to the collective, to change how we view our interdependent community. Or it is a warning sign of much worse things to come.

Owner/Founder of Chicago Compass Counseling, therapist, itinerant change agent, and recovering English Major.