Aug 18, 2024; Baltimore, Maryland, USA; Boston Red Sox outfielder Jarren Duran (16) at the plate during the first inning against the Baltimore Orioles at Oriole Park at Camden Yards. Mandatory Credit: Reggie Hildred-USA TODAY Sports
- The Massachusetts Gaming Commission today held its much-anticipated roundtable on limited sports betting users
- The nearly three-hour meeting featured input from licensed sports betting operators, industry experts, and responsible gaming advocates
- Gaming operators stressed that a small percentage of customers are limited in the state, while regulators asked for more transparency into the practice
Licensed Massachusetts sports betting operators somewhat drew back the curtain on the practice of limiting sports betting users in today’s much-anticipated roundtable, as representatives for the sports betting companies claimed very few customers are actually limited in the state.
Operators stressed over the nearly three-hour meeting that limiting users is more about curtailing a very small percentage of customers from taking advantage of the sportsbooks while being able to safely offer a high number of markets to its more casual bettors.
All eight licensed sports betting operators attended the meeting after no-showing the first roundtable earlier in the year.
What Goes Into Limiting a Customer?
Perhaps the most engaging portion of the meeting took place right off the bat, as Massachusetts Gaming Commission Interim Chair Jordan Maynard asked the operators to detail what goes into a decision to limit a user.
Jeremy Kolman, deputy general counsel for BetMGM, said the operator will monitor player activity and focus on certain betting patterns and behaviors, such as consistently capitalizing on errors on odds and lines before traders can identify them, signs of syndicate betting, wagering in inconsistent amounts, and engaging in “courtsiding.”
Courtsiding would end up being a heavy theme during the morning discussion, with operators revealing customers who are found to be engaging in the practice are typically limited. Courtsiding is the action of being at a live sporting event and placing in-game bets on an online sports betting platform before it has the chance to adjust its in-game lines. The platforms are typically on a five to 10 second delay from real-life action.
It would be the general theme of the meeting, as company representatives said a bevy of factors are considered before limiting a user, not just the factor of whether or not the user is winning wagers at a high rate.
“It’s worth noting that these factors focus on behaviors and betting patterns of patrons, they’re not merely result driven,” Kolman said.
Is it possible from looking at these factors and patterns of behavior, Commissioner Nakisha Skinner asked, that casual bettors can be lumped into these types of “advantage players” and receive limitations that aren’t warranted?
If a casual user is engaging in these types of behaviors and showcasing those patterns than yes, Kolman said, they may receiving a limitation.
However, according to Sarah Brennan, senior director of compliance for BetMGM, only about 1% of its Massachusetts customers have been limited by the sportsbook.
Cory Fox, vice president for product and new market compliance of FanDuel, said it’s more about player behaviors and the types of markets they’re wagering on that goes into the decision to limit a customer, but he did say the outcome of their wagers also comes into play.
“Based on that we get insight into whether we believe the use should be limited, either because they might be arbitraging, picking up pricing errors, or because they have a better model than us or information than us, that does factor into whether they’re winning. We then make a decision on future wagers based off that information,” he said.
In 2023, Fox said 0.043% of wagers placed in commonwealth were placed at the maximum amount allowed for that individual. The population of users who are limited in the state is extraordinarily small, he claimed.
However, without the ability to limit these very small percentages of users, Fox said FanDuel would have to minimize the number of betting markets its offers the vast majority of users who are not limited, which would ultimately drive down revenue, drive down taxes for the state, and likely push users into the unregulated markets.
It’s important to consider certain statistics in this discussion, Alex Smith, senior vice president for regulatory compliance for Fanatics Betting and Gaming, told the commission. He noted that the majority of winning users on Fanatics Sportsbook, more than 90% of customers, have not been limited in any way. Among the users who have been limited, Smith said more than half were “net losing” at the time.
“The notion that if you win you’ll be banned is not statistically correct,” he said.
Kenneth Fuchs, senior vice president and chief operating officer for Caesars, supported this assessment. Caesars is banning customers for violating terms and conditions or engaging in illegal actions while using the Caesars Sportsbook platform, he said.
“We are not banning customers for beating us,” he said.
So What Can Be Done?
Commissioner Eileen O’Brien urged the operators to find a technical solution to the courtsiding issue, to fairly allow users who are watching a game on television and those who are in attendance to place in-game bets without an advantage.
And if they can’t? O’Brien said the operators should considering eliminating these in-game markets altogether.
Operators seemed to balk at this potential solution, noting that the requirement was out of the scope of their platform technology. Jake List, senior director of regulatory gaming compliance for DraftKings, reminded the commission that the operators are required to use official third-party game feeds and finding a perfect marriage between live-game action and the broadcast delay would be very difficult.
List said it is a more effective practice to limit the small number of users who are found to be courtsiding rather than completely eliminating an entire in-game market for the majority of customers who just want to place a bet.
So what else can be done for users? Maynard suggested increased transparency from the operators, such as sending notifications to customers when they are going to be limited and providing information on why the action is being taken and how much they can now bet on a certain market.
Operators seemed to be open to such a suggestion, but did note it would present some difficulties. Fox said FanDuel would be happy to work with users in this regard, but believes that most users “know exactly why they’ve been limited.”
“They would prefer not to be limited, but there isn’t a confusion aspect with the vast majority of them as to why they’re limited,” Fox said.
Industry Experts Criticize Operators
The second half of the morning saw comments from industry experts and journalists covering the sports betting markets. Several of the participants shared strong criticisms of the operators for the practice and also veiling limitations under the umbrella of responsible gaming.
The industry experts in attendance included Brianne Doura Schawohl, founder of a consulting group that specializes in problem and responsible gaming issues; Marlene Warner, chief executive officer of The Massachusetts Council on Gaming and Health; David Hill, a New York writer and journalist in the gambling industry; Jeff Edelstein, a sports betting industry journalist; Joe Brennan Jr., executive chairman of Prime Sports; and Richard Schuetz, chief executive officer of American Bettors Voice.
It’s cynical of sports betting operators to engage in the practice of limiting users under the guise of responsible gaming, Brennan Jr. said.
“We shouldn’t take addiction, whether gambling addiction or their comorbidities lightly, but I do have a concern when we’re having a specific talk about player limitations and responsible gaming issues have been so quickly cited by operators as a reason for engaging in these practices,” he said.
It’s no secret that VIP customers provide the majority of sportsbook revenues, Hill said. Are VIP players problem gamblers? It’s a fair question, he said, and few are likely limited by the sportsbooks.
Players who are profiled as those who make smart, winning bets are not invited to be part of VIP programs for these sportsbooks. Instead, they’re limited from placing bets on the platforms, Hill said.
It’s up to the gaming commission to require the operators increase transparency, Schuetz said. If the MGC requires a notification be sent out to a user who is limited, he suggested the commission require operators include information as to why they’re being limited, as opposed to just a general notification saying they’re in violations of the sportsbook’s terms and services.
It’s important for businesses to protect themselves and limit risk, Doura Schawohl said, but are these same data obligations and risk mitigations being deployed for the consumer?
“Where is that line for truth, fairness, and transparency so consumers can understand what’s happening? That’s really where I hope we can find more answers,” she said.
So What’s Next?
No official action was taken at the meeting and if any is eventually taken it’s unlikely to happen soon.
This is the first of several discussions on the practice, Maynard said.
“We look forward to more discussions to follow. I know that patrons and those who follow the commission’s work are eager for quick determinations, but we are a deliberative body and we will not sacrifice getting an issue right just for expediency sake,” he said.
But what could come out of these discussions, if anything? The MGC is unlikely to ban in-game markets where courtsiding is evident, as that would severely limit operators, their ability to do business in the state, and existing markets for users.
A more likely solution will be increased transparency for users who are limited. The MGC may require an operator to send a user an email or a notification that they have been flagged and will be limited for certain markets, including how much they can now bet in these markets.
In Massachusetts, operators are reporting that only a small percentage of sports bettors are being subject to limitations. This comes as a surprise to many, as the state has recently legalized sports betting and there were concerns about potential problem gambling issues.
According to data from several operators in the state, less than 5% of sports bettors have been flagged for limitations. These limitations can include restrictions on the amount of money that can be wagered, limits on the types of bets that can be placed, or even temporary suspensions from betting altogether.
Operators have been proactive in identifying potentially problematic behavior among their customers. They have implemented strict monitoring systems that track betting patterns and flag any unusual activity. This allows them to intervene early and provide assistance to those who may be struggling with gambling addiction.
The low number of bettors being subject to limitations is seen as a positive sign by many in the industry. It indicates that the majority of sports bettors in Massachusetts are able to enjoy the activity responsibly and without any negative consequences.
However, operators are not letting their guard down. They continue to monitor betting activity closely and are committed to promoting responsible gambling practices. This includes providing resources and support for those who may need help with managing their gambling habits.
Overall, the data from operators in Massachusetts suggests that the state’s sports betting industry is off to a good start in terms of responsible gambling practices. By staying vigilant and proactive, operators are working to ensure that sports betting remains a safe and enjoyable activity for all participants.
