Gaming regulators in Massachusetts are preparing for another deep dive into sports bettor limiting this week, as Bay State watchdogs have questions and want answers about what operators have called an “industry practice.”
The Massachusetts Gaming Commission (MGC) has scheduled a meeting for Wednesday to discuss “wager limitations” with sports betting operators, bettors, responsible gaming groups, and promoters of "alternative sportsbook models.”
It’s bound to be a closely watched affair for the world of legal sports betting, as the MGC is the first regulator to dive so deeply into the subject in a public setting.
The commission’s first roundtable on limiting in May also saw all of the state’s active operators decline to participate, citing the confidential and proprietary nature of their risk-management practices.
But bookmakers and sharper bettors are very familiar with limits, a topic of much discussion in the #gamblingtwitter ecosystem. However, for those less aware, a good place to start may be: what is limiting?
Let's get ready to roundtable: the agenda is out for Wednesday's Massachusetts Gaming Commission meeting on sports bettor limiting.
— Geoff Zochodne (@GeoffZochodne) September 9, 2024
Looks like we'll have one segment involving active operators in the state and another for bettors, RG advocates, and other books. pic.twitter.com/rUSUIdYqtn
DraftKings includes a section on limiting in its annual report to shareholders: “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.”
In short, then: limiting (or “stake factoring”) is when a sportsbook operator limits what you can bet based on your history with that operator. If you asked a bettor and a bookmaker for a definition, that would likely form at least part of the answer.
“[Bettors] just submit a bet and the sportsbook says 'No, that's more than we'll allow, try again,'” said “Captain” Jack Andrews, a professional bettor and co-founder of sports-betting education site Unabated, during the MGC’s limiting roundtable in May. “And oftentimes they have to try again, and again, and again, until they find what their limit is. It's not posted."
So, there’s no disagreement over whether limiting happens or not. The debate is really about why bettors get limited, if the reasons for and extent of limiting are appropriate, and just how many players are subject to wagering restrictions, among other issues.
"For a lot of players, the limits are punitive, limited down to a $1.38 or $4," Andrews said, adding that this is not only on “esoteric” prop bets but for massive wagering markets such as NFL sides and totals.
The “why” is an especially contentious question to ask when it comes to limiting. Operators claim they are concerned about a small segment of bettors, such as those who are waiting to pounce on bad lines or odds or who hunt in packs with similarly sophisticated players.
“We believe this practice is beneficial overall, because if it were not possible, betting options would be restricted globally and limits available to customers would be much lower to insulate overall risk due to the existence of a small segment of highly sophisticated syndicates and algorithmic bettors, or bettors looking to take advantage of errors and omissions on our platforms,” DraftKings noted in its annual report.
The MGC has been told such things by operators in the lead-up to the meeting on Wednesday, which could touch on Massachusetts sports betting and beyond.
For example, commission staff have heard from bookmakers that "many limited bettors are not your common customers" and that "a very low percentage of players” are subject to restrictions.
“Limiting patrons in mobile sports wagering correlates with two well-established risk management practices in brick-and-mortar casinos: 1) table limits; and 2) limiting play by patrons that engage in advantage play (i.e., card counting),” a July memo to commissioners said.
Winners not welcome?
But the long-held suspicion among some bettors is that they are getting limited for one simple fact: they’re winning.
"Operators tend to deny that they limit people due to winning," Andrews said in May.
Indeed, earlier in the meeting, that was the case.
"We don't limit players based just on winnings," said Justin Black, a representative of Bally Bet-operator Bally's Interactive, during the May roundtable. "Rather, it's based on underlying factors that are proprietary to Bally's Interactive from a risk perspective."
Yet Andrews noted that Bally’s uses technology provided by Kambi Group PLC, which he said has a history of sizing up players and “stake factoring” them accordingly.
"Would Kambi say the same thing that you've said?" Andrews asked.
Black responded he couldn’t speak for Kambi but added that sports betting odds are subject to “variables,” such as roster changes, and some bettors are looking to take advantage of any imperfections.
Penny for your thoughts
Limiting someone who is seen as taking advantage of errors or bonuses is one thing. Limiting winners for winning is something else, and it could raise eyebrows with the Massachusetts regulators, especially if those limits are not being applied as rigorously to players who lose a lot.
“We did get some outreach, just so the public knows, through emails,” interim MGC chair Jordan Maynard said during a March 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?”
That question, as well as others about how fairly bettors are treated, could be asked again on Wednesday. The answers may be important, too, as limiting is not illegal in Massachusetts as long as it is done according to the rules and regulations of the Bay State.
One Massachusetts regulation states there is "no limitation" on the minimum or maximum wager a sportsbook operator can accept.
“This rule does not preclude a Sports Wagering Operator from establishing its own minimum or maximum wagers or limiting a patron’s Sports Wager for reasons considered necessary or appropriate by the Sports Wagering Operator,” the regulation adds.
Why me?
So what is a “necessary or appropriate” reason for limiting? The “why” again looms large over the whole debate, and could be a key part of Wednesday’s discussion.
A representative of ESPN BET-operator PENN Entertainment Inc. said in a letter to Maynard in May that the company "may limit a patron for various reasons, including taking advantage of or manipulating the sportsbook or abusing promotional play."
But the response from members of the public made aware of the MGC’s efforts suggests it is more than just these kinds of players, or even just sharper bettors, who are on the receiving end of limits.
"The comments overwhelmingly indicated that regular patrons, individuals who casually or recreationally wager are being limited simply for winning, winning in the ordinary course," commissioner Nakisha Skinner said in May. "And, to me, that's a much different conversation that affects many more individuals, many more citizens of this commonwealth than the handful of ... sharps that might be, sort of, gaming the system from the operators' perspective."
That, for Skinner, raised questions about integrity and fairness. Andrews even suggested some players are “limited falsely for being a winning bettor,” when really they just had a lucky stretch of wagering.
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
Another “why” that might get discussed on Wednesday could have to do with responsible gambling practices. As Maynard wondered earlier this year, if big winners are getting limited, are big losers getting the same treatment?
Problem and responsible gambling consultant Brianne Doura-Schawohl said during the May meeting that there was an instance in Washington, D.C., wherein a bettor was limited for what were said to be RG reasons but was really because they were a winner.
Doura-Schawohl told the commission that there are instances in other jurisdictions where responsible and problem gambling was the reason why someone was limited, but that being clear and truthful about the reasons is important.
Doura-Schawohl added that there is probably not enough limiting being done for RG reasons, “but I’d also like to offer a caution that it can be just as detrimental to the wider public to use that as a reasoning if it is not truly an issue with problematic play.”
Get your popcorn ready
Given all of the above, the MGC’s limiting meeting on Wednesday could be must-see programming. That may be true for bookmakers and bettors — and for fellow regulators as well.
Whether Massachusetts decides to tweak a regulation or take any action at all with regard to limiting remains to be seen. What is certain is that the subject is about to get hit with a lot of sunlight and that operators will have to provide more answers than what they’ve already disclosed in private meetings.
“Ultimately, there could be some regulations that come out of this,” Maynard said in August. “And what I would pose to the operators today in public is, do you want to be a part of the conversations that help develop those? Or do you want to be reactive to whatever comes out? And I would hope that they would want to be part of it.”
