If you’re a regulator of legal sports betting in Canada or the United States, it’s getting harder and harder to remain oblivious to the limiting problem.
Social media is rife with people claiming they’re restricted to wagering pennies at various online sportsbooks for the purported crime of winning.
Meanwhile, the Massachusetts Gaming Commission (MGC) has broached the subject in public meetings. On Wednesday, the regulator is scheduled to touch on the topic again.
Moreover, representatives of an upstart non-profit, the Billy Walters-backed American Bettors’ Voice (ABV), have discussed limits at recent gatherings of the National Council of Legislators from Gaming States (NCLGS) and the Sports Betting Regulators Association (SBRA).
“They are arbitrarily throwing people out of sportsbooks because they just want to throw them out,” alleged Walters, a famous sports bettor, during the NCLGS conference in Pittsburgh earlier this month. “They haven't violated the rule. They haven't done anything wrong, and the majority of time is because, frankly, many of these people who operate these sportsbooks don't have the expertise to be an operator.”
NCLGS member states are all over the country. The SBRA also has nearly 40 members, ranging from the Alcohol and Gaming Commission of Ontario to the Wyoming Gaming Commission.
During the SBRA meeting on Monday, those who tuned in heard from ABV representatives about the “ban or bankrupt” model of bookmaking, wherein sharper players are essentially shown the door, and losing bettors can gamble as much as they have until they’ve got nothing left.
“That's just not a case of taking high rollers and sending them into the stratosphere,” said Richard Schuetz, a longtime gaming industry executive and the CEO of American Bettors' Voice, during the SBRA's virtual meeting. “This is lower-level bettors, too. If a lower-level bettor starts to slow down, they will begin automatically firing promotions to him.”
The more you know
ABV Chairman Gadoon “Spanky” Kyrollos also pointed the audience of regulators to a section of DraftKings' annual report to investors that addresses limiting.
"We follow the industry practice of restricting and managing betting limits at the individual customer level based on individual customer profiles and risk level to the enterprise; however, there is no guarantee that jurisdictions will allow operators such as us to limit on the individual customer level," the section states.
Kyrollos pushed back on limiting being a longstanding tactic, asking, "Why would anybody stop an industry practice?"
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
Limiting isn’t the only topic ABV wants to discuss and help players provide input on, but it’s literally at the top of their advocacy list. And now, the group has advocated in front of two well-known organizations with influential membership.
So, now that it’s out there, what will regulators do? They can’t unsee or unhear it. And now that they know, doing nothing is a choice.
The MGC has chosen what appears to be a prudent course. They’re asking questions and looking for data upon which to base any action they may take — and that could be no action at all.
But establishing just how many bettors are limited, and for what reasons, is a good starting point. Once the extent of the issue is known you can weigh whether it's worth regulatory intervention. And it’s something, at the very least.
Sunlight: the best disinfectant
There are some good reasons for regulators to consider limiting and do so publicly, including to bolster confidence in regulated operators.
One of the goals of legalizing sports betting was to convert gambling with offshore and illegal sites into legal and regulated activity onshore. But if regulated operators throw out all the winners, why would anyone wager there?
“A lot of people were arguing when this all started that this will stop play in the foreign offshore markets,” Schuetz said on Monday. “And when you're telling the good players ‘We don't want you,’ what the operators are doing is encouraging play on the offshore markets. It's just a contradiction to the whole organizational goal of this.”
Regulatory action seems distant still, and again, regulators may ultimately decide there’s nothing they can or want to do about limiting. But the conversation has begun at least. Any regulator who tries to plead ignorance on limiting will have to work very hard to remain ignorant.
