Pushing Back on Push Notifications: Coinbase’s March Madness Marketing Draws Criticism
Coinbase has faced user backlash for bombarding customers with March Madness betting push notifications.
Criticism has come from several angles after the popular crypto trading app used push notifications to encourage its users to try their hand at sports predictions during the annual NCAA basketball tournament. “Trade the madness. Bet on this game. Here is the spread on tonight’s matchup.”
Finance and crypto companies have been rushing to capitalize on the U.S. prediction market craze. Coinbase launched its prediction market functionality in December through a deal with Kalshi, using one of the biggest sports moments of the calendar year to drive engagement.
The backlash, when it came, was pointed.
Alexander Leishman, founder of the bitcoin platform River, posted that Coinbase was telling users that “financial speculation and gambling is the way out of a dreary life when, in fact, for 99% of people, it will only make their life worse.”
Others piled on. John Palmer, who works for design company Area Technology, wrote that he didn’t understand pushing this on users who trust Coinbase to hold their stablecoin and crypto balances.
“This is essentially encouraging me to gamble,” he wrote. “What does that say about the internal philosophy around money management?”
Coinbase CEO Brian Armstrong responded that it was a fair point and the company would look at providing customization options for push notifications. Robinhood, which faced similar criticism that same week, already allows users to opt out of sports notifications entirely.
The episode looks, on the surface, like a minor PR skirmish. It is actually something more significant: a preview of the conversation the entire industry is about to be forced to have.
What the Research Now Says
The timing of the Coinbase backlash is uncomfortable, because a peer-reviewed study published in the journal Addiction this month has established a causal link between gambling marketing and harm.
The result is the first of its kind. There is abundant evidence of correlations between marketing and gambling harm, but causal relationships have, until now, proven harder to establish with scientific rigor.
The study, led by Central Queensland University in collaboration with the University of Bristol, monitored 227 active gamblers over a two-week period. Participants who chose not to receive direct marketing from their gambling account placed nearly a quarter fewer bets and spent 39% less money than those who were exposed to the messaging. They also reported 67% fewer short-term gambling harms.
Co-author Dr Philip Newall of the University of Bristol noted that the UK government’s 2023 gambling white paper had argued there was little need to regulate marketing, since there was no evidence of a causal link. This research changes that. He added that he saw no reason why the same effects wouldn’t apply to gambling advertising on TV or social media, not just direct push notifications.
That is a significant statement. The industry’s standard defense of its marketing practices has always rested on the absence of proof that the marketing itself causes harm, as opposed to merely reflecting the preferences of people who were already going to gamble. That defense is now considerably weaker.
The Incentive Nobody Wants to Talk About
What makes this particularly relevant to the American market right now is the mechanism by which these platforms grow. Prediction markets and sportsbooks alike are acquisition businesses at this stage of their development.
The economics require them to convert as many users as possible and keep them engaged. Push notifications, free bet offers, and personalized marketing are not incidental features of the product. They are the growth engine.
This is precisely what the New York Federal Reserve’s recent research on sports betting and consumer credit flagged as the core problem. The Fed found that legalized sports betting, particularly via mobile, drives measurable increases in credit card delinquencies and auto loan defaults, with the effects concentrated heavily among adults under 40.
The Bristol study now adds a piece that the Fed research couldn’t supply: it is not just that some people gamble too much. It is the marketing that is actively causing them to gamble more than they otherwise would, and causing more harm in the process.
Putting those two findings together highlights that there is a problem that the industry can no longer dismiss as applying only to a small number of problem gamblers. The Fed’s data shows population-level financial damage. The Bristol data shows that the marketing practices driving engagement are a direct cause of harm. Coinbase’s users noticed it in real time during a basketball tournament.
What Armstrong Got Right, and What He Didn’t Say
To his credit, Armstrong’s response to the criticism was not defensive. It was the right instinct to acknowledge that the notification strategy needed recalibration to offer users more control. Robinhood’s existing opt-out mechanism is a reasonable baseline.
But opt-out is not the same as opt-in, and the research is clear on why that distinction matters.
Once you open an account, the platform knows what type of personalized messages to send. If you haven’t bet in a few days, a free bet offer draws you back in. The default setting is the product, and if the default is aggressive marketing, then offering an opt-out to users who are already sophisticated enough to seek it out does less work than it appears.
The platforms that figure out how to build sustainable customer relationships, rather than maximum short-term engagement, will be the ones still standing when regulators finish reading the same studies their users are now citing in social media posts. That moment is getting closer.
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