Sportsbook operators in the Bay State could soon be forced to explain why it may be that winners aren’t welcome in their establishments — digital or otherwise — while losers are free to keep frittering away their cash.
The Massachusetts Gaming Commission (MGC) met Thursday and discussed "Sports Wagering Operator Wager Limitations," the bane of winning sports bettors' existence.
Those limitations are applied to certain sporting events to help with risk management and to protect the integrity of certain events, the MGC heard. However, commissioners were also told that limits can be set on a per-customer basis, meaning a patron trying to get down $1,000 for a bet may find they can only wager $100 instead, if that.
Gaming regulators have been more or less content to let sportsbook operators limit as they see fit, to the chagrin of sharps and professional bettors. Nevertheless, the MGC’s decision to start exploring the subject prompted bettors to reach out and share their limiting horror stories with the commission, which is preparing to dig deeper into the industry practice.
“We did get some outreach, just so the public knows, through emails,” interim MGC chair Jordan Maynard said during Thursday’s meeting. “And there were several folks who said, ‘Hey, I'm betting pennies when I'm putting in the bet.’ And so, what's the notification? And if you're turning off a winning wagerer, are you turning off a losing wagerer?”
Here is DraftKings' annual reminder to investors that they limit sports betting customers but that state lawmakers and regulators may not allow them to do so forever:https://t.co/pwWaxS4Pna pic.twitter.com/QPHN6Y3FZM
— Geoff Zochodne (@GeoffZochodne) February 16, 2024
A limit to limiting?
Massachusetts launched legal sports betting at brick-and-mortar U.S. casinos in January 2023, which was followed by the debut of online sportsbooks in March of last year. Hundreds of millions of dollars are now being wagered in the Bay State every month, including approximately $542.5 million with its sportsbooks in February.
Moreover, while there have been some recent exits from the commonwealth, there are still several major sports betting sites in Massachusetts, including Boston-based DraftKings. Yet the practices of those bookmakers, especially in how they handle winning customers, prompted enough outcry to garner an eyebrow-raising reaction from the MGC.
The annoyance over the limiting of winning customers is not exclusive to Massachusetts either, as plenty of bettors in both the U.S. and Canada have been factored or otherwise restricted in how much they can get down at a licensed sportsbook.
In Massachusetts, however, bettors are wondering if limiting is legal at all. In the documents for the MGC’s Thursday meeting, staff noted that "[t]hrough public comment, a question has arisen as to whether a Sports Wagering Operator is authorized to limit the amount an individual patron may... wager."
Andrew Steffen, the MGC’s sports wagering operations manager, said the state's sportsbook operators are currently complying with the rules. That includes a regulation that more or less allows operators to decide the minimum and maximum wager they will take from a bettor unless the commission says otherwise.
As Steffen notes, there is a regulation on the books in Massachusetts that allows sportsbooks to limit customers. pic.twitter.com/XqQtOvjke9
— Geoff Zochodne (@GeoffZochodne) March 28, 2024
Steffen said the commissioners can seek more information and possibly revisit their regulations in the future.
One concern about excessive limiting is that it can drive players to offshore and illegal sportsbooks instead of regulated ones in their home states. Members of the MGC, however, wondered about the fairness of limiting winners and encouraging losers, especially when the winners aren’t quite sure why they’re being shown the door.
“I understand that there are probably legitimate business decisions that are made by our sports wagering operators here,” commissioner Nakisha Skinner said on Thursday. “I don't discount any of those. But I do think there should be a way for patrons to really understand what might get them limited.”
Explain yourself
Skinner said she didn't think that the MGC's regulations and the house rules of operators were enough to address the concerns and complaints recently voiced to the commission. She also said there is a question about how big of an issue limiting is, and whether the regulator can find a "sweet spot" that ensures both operators and consumers are protected.
The regulation and the house rules of operators do look to put “a tremendous amount of discretion” in the hands of the sportsbooks, commissioner Eileen O’Brien said. While there may be business reasons for that, such as keeping the books balanced, "there's a deeper issue here in terms of individual patrons," O'Brien said.
O'Brien cited a recent Wall Street Journal article about a psychiatrist who was given VIP treatment and lots of room to wager despite racking up considerable losses. Meanwhile, the MGC is hearing from users wondering why they've been limited.
“What I'm curious to know as a commissioner is: what's the basis for that?” O’Brien said. “How and why are they making these determinations, because I think that's critical to whether we need to amend this [regulation].”
Deep dive incoming
O'Brien said the additional information could also be helpful for the MGC in its future work, such as around artificial intelligence and its possible use in flagging problem gambling. Moreover, O’Brien noted Connecticut Sen. Richard Blumenthal's recent letter to eight online sportsbook operators seeking written responses to several questions, including an explanation for how those bookmakers collect and use customer data.
Some of the MGC's questions may have to be answered behind closed doors if they are commercially sensitive enough, O'Brien acknowledged. Maynard, though, floated the possibility of a public roundtable and suggested that they could start discussing scheduling in the next week or so.
Commissioner Bradford Hill said Thursday marked the start of a conversation that will continue.
“And I think the public needs to understand that we are going to take this very seriously,” Hill said. “I like the idea that we have a roundtable on this issue, but I also feel strongly we need to get our operators in here and ask some very hard questions. And if we have to go into an executive session, so be it.”
There is indeed an appetite among the members of the MGC to keep pursuing the matter, which may require sportsbook operators to pull back the curtain about how they handle successful sports bettors.
“Just as an aside, I, as one commissioner, would really love for [operators] to give us copies of whatever they're submitting in the April 8 response to Senator Blumenthal,” O’Brien said. “Because to me, this is the beginning of our conversation. So I thank you, sports wagering, for kicking us off, but I do feel like we're going to be doing a deeper dive on this as we go forward.”
