Bet limits discussion in Massachusetts reveals disconnect between regulator, operators

The Massachusetts Gaming Commission (MGC) led a nearly three-hour discussion about bet limits Wednesday (11 September). It was the second attempt at doing so after most operators stood the commission up in the spring.

The meeting revealed a disconnect between operators, regulators, consumers and responsible gaming advocates about how or if a regulator should have a hand in how operators manage risk.

Every operator live in Massachusetts participated in the meeting. The last time, only Bally’s, which wasn’t yet live with Bally Bet, attended.

Statement from DraftKings on decision to not participate in Massachusetts Gaming Commission roundtable on practice of limiting bettors: pic.twitter.com/thbltgu8jc

— David Payne Purdum (@DavidPurdum) May 21, 2024

In addition, there was a panel of stakeholders, ranging from a bettor/journalist to responsible gaming advocates to those with experience running casinos and sportsbooks. The conversation centered on how and why bettors may be limited. It also touched on general sportsbook limits, advertising and how sportsbooks communicate with customers.

Sportsbooks: Tiny percentage of players are limited
Major operators collectively told the MGC that the number of players who are limited is miniscule — well under 1%. And of those players, many are losers. Fanatics Sportsbook SVP for regulatory compliance Alex Smith came close to putting a number on that, saying that “fully half of those limited are losing.”

The comment furthered the operators’ argument that bet limits are not imposed for winning or losing. They are limited for the process of how they bet. Major operators offer thousands of betting markets per day, and what they watch for is bettors who consistently seem to have an edge or are trying to create an edge.

Sarah Brennan and Jeremy Kolon from BetMGM opened the discussion with an overview of how their risk management department works. The explanation served as a general template for all the operators, who say they look for betting patterns, bonus abuse, irregular behaviour, and other factors when considering risk. Essentially, the sportsbooks are trying to identify players who have what they call an “advantage.”

Among the ways to take advantage, operators said, is through arbitrage — betting both sides of a line. Other ways include what is called “courtsiding,” during which a consumer is at a live game and can potentially see the result of a bet before the market is even posted due to latency of video feeds.

Manipulating technology tricky
The issue of courtsiding opened a line of discussion about whether or not operators should offer in-play wagers in which this could become an issue. Commissioner Eileen O’Brien asked why operators could not account for latency by changing the timing of when an in-play market is offered.

“That is the answer,” FanDuel vice president of product and new markets Cory Fox said. “But getting the timing exactly right is difficult because of all the technology going on around it.”

Added chief operating operator and head of sports for Caesars Sporstbook Kenneth Fuchs: “The feeds are not perfect, and sometimes they are official feeds” that are mandated by the regulator.

O’Brien closed out that part of the conversation by saying, “As a regulator, what I hear is that maybe you should not offer those markets.”

Operators, however, previously had pointed out that because they are regulated and have the leeway to offer thousands of bets, they can draw bettors away from the illegal market. Limiting them, then, from offering a massive bet menu could potentially send bettors offshore.

David Hill, a freelance gambling writer, corroborated that concern when he shared a story about a recent trip to Costa Rica to work on a story about the offshore market. In talking with offshore operators, he said they welcome the idea of bet limits in the US. He said the operators believe that limiting regulated operators will work in favor of offshore sportsbooks.

Gambling consultant Brendan Bussmann of Las Vegas-based B Global agreed.

“Any offshore operator sitting in their living room was salivating watching that hearing,” he said.

What’s the best way to notify a bettor?
Another key discussion topic was how to notify a bettor that they have been limited. In general, operators say that notifying bettors they have been limited is a zero-sum game. Fox said that bettors who are limited don’t usually go to customer service to find out why.

While Smith said that when Fanatics Sportsbook tried sending limit notifications, “all we got back were really nasty responses.” He went on to say that rather than sending e-mails, Fanatics Sportsbook may “send a note in the app.” Other sportsbooks will show what the bet limit for a particular wager is when the bet is placed. But it may not tell the particular bettor what his or her limit is.

O’Brien countered by saying that she believes that any kind of notification is better than nothing at all. She said that forcing consumers to “hunt around” to figure out what they are limited on could lead to frustration.

Real-world experience with bet limits
Jeff Edelstein, an avid bettor, fantasy player and journalist who reports on US sports betting, was able to offer the commission a real-world point of view. He told the panel that he has been limited by multiple sportsbooks. Edelstein said that while he is a heavy bettor, he is not a high-stakes bettor. He said that if he bets $100 on a game, he’s sweating it.

But at multiple New Jersey sportsbooks, he is now only allowed to bet a percentage of what the platform-wide bet limit is on certain wagers.

Responsible gaming advocate Brianne Doura-Schawohl said, “We see a lot about win. 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 … to me this really calls in a question with truth in advertising. Can I win with you? Or I am I going to punished for winning? How many times can I win before I am cut off?”

MGC’s focus is consumer protection
And that question is a key concern for the MGC. O’Brien and interim chair Jordan Maynard both said during the discussion that consumer protection is a main focus. To that end, there was much discussion around what kind of bettors are limited.

Despite Edelstein’s story, major operators said that bet limits are not usually imposed on recreational bettors. But they also said that it sometimes cannot be avoided.

“Any casual bettor who finds themselves caught up in this situation would likely get it resolved quickly,” BetMGM’s senior director for compliance Brennan said. Further, Brennan said, limiting is flexible.

In some cases, a bettor may be limited on a particular market, but not across the board on a site. In addition, the limit may be a percentage of the platform’s allowed bet. Both the amount of the allowed bet and the percentage could be changed over time.

What happens now?
There was no answer to any of the questions asked on Thursday. And it’s unclear when, or even if, the commission will take any action. Maynard was clear that the MGC is a “deliberate” body and won’t be rushed.

As the first regulator in the US to even entertain the question of bet limits, many in the industry were watching and wondering what comes next.

From here, they’ll have to wait.