Sportsbooks Limiting Winning Bettors Probed by Massachusetts Regulators

Last week, all major licensed sportsbooks operating in Massachusetts spoke before the state gambling regulators. The purpose was to defend the practice of limiting the bets of successful winning bettors. 

The Massachusetts Gaming Commission (MGC) said it had received dozens of complaints from successful sports bettors who felt they were unfairly banned simply for winning too much. The practice is widespread and de facto accepted among many casinos. But the legalization of sports betting across many U.S. states is new territory.

The MGC tried to get the state’s sportsbooks together to discuss the issue back in May of this year. However, operators said they wouldn’t attend, as they feared their trading secrets could be exposed. 

This time, they did show up. Senior employees in the compliance and legal departments were sent from nine sportsbooks, including BetMGM, DraftKings, FanDuel, Caesars, Bally’s, and ESPN Bet. For three hours, they were questioned on the complaints and given time to explain their views on the issue. 

In addition, other experts from the gambling business were brought in. That included half a dozen journalists, former and present casino and sportsbook senior management, and specialized gambling lawyers. 

The Meeting 

Throughout the three-hour session, sportsbook representatives sought to allay the regulator fears. Operators claimed that less than 1% of bettors are limited in Massachusetts, and a significant amount of those are losing bettors.

Sportsbooks said they apply limits to specific bettors on specific markets. It is implemented when they believe that bettor has contrived to gain some kind of advantage over the usual knowledge of sports. 

Those kinds of bettors include arbitrage players, who use free bets and multiple sportsbooks to ensure small profits each bet, and “sharp” bettors, who are always among the first to put bets on inaccurate lines.

However, it is with the latter instances that the MGC, and some speaking experts, took the most umbrage with.

“We see a lot about winning. Come play, win. Come play, win. When, in fact, if I win and if I win enough, I actually can’t come play with you…,” said problem gambling policy advocate Brianne Doura-Schawohl. 

“To me, this really calls into question the truth in advertising. Can I win with you? Or am I going to be punished for winning? How many times can I win before I am cut off?”

Sportsbooks countered that if they did not limit these bettors, then some markets would simply not be profitable, and they would have to shut them off.

“It is our ability to limit that small minority of advantage players that allows us to continue to offer competitive lines, competitive odds, and a wide variety of markets for the 99% of non-advantage players that play with us,” said Sarah Brennan, BetMGM’s director of compliance.

Keeping all sports betting lines up to date and considered accurate is a large task. It is one that operators employ entire trading teams to deal with. Rather than run a line that lacks the staffing to keep updated fast enough to beat the sharps, operators said they would just close the market.

Some on the MGC agreed, and said, yes, maybe ‘books should offer less markets if they’re claiming they make too many mistakes and can’t keep up.

Other experts said this would just drive away customers, especially frequent, high stakes bettors, and encourage them to use illegal offshore sportsbooks that do offer their desired markets. 

Next Steps

The three-hour meeting ended with no concrete proposals for change from either side. One suggested change was improving the communication between sportsbooks and bettors who have been limited. However, some ‘books said that they had ceased notifying limited customers, as they mostly only received abuse or legal threats in return.

It was also noted that representatives from the ‘books trading departments — in charge of setting their odds and keeping them up to date — were not present at the meeting. The MGC said it is considering many avenues, but it would not be rushed into making any decisions. 

Although American gamblers may say this is a national issue, or at least one in states with legal sports betting, the MGC has been one of the more active U.S. regulators in holding operators to task. 

It hasn’t been afraid to make drastic changes to regulations it thinks are not working, or to hand out large fines to sports betting operators that break its rules.