A new regulation in Massachusetts didn’t exactly go over well with sharp bettors, but the state’s gaming commission is commended for recognizing their plight.
Sportsbooks’ initial adherence to a new rule in Massachusetts requiring them to notify customers why they’re being limited was pretty much what many around the industry expected.
“We don’t want your business,” is a loose but largely fair interpretation of the notices sharp bettors have received from operators since June 1, the effective date of the regulation.
While the rule marks a critical step in player advocates’ efforts to create a fairer and more sustainable sports betting environment, more work needs to be done, according to the American Bettors’ Voice board member known as Sigma Squirrel, who consulted with Massachusetts Gaming Commission in crafting the rule.
“It’s an important development that state regulatory agencies are seeing that player limits are in fact real and happen at a much higher frequency than the OSBs are telling their regulators and for reasons other than outright cheating,’” Sigma Squirrel told Gambling Insider this week. “… I think what they found in Massachusetts is actually players who show skill at identifying good prices are the ones who get limited.”
As examples, FanDuel told customers that taking advantage of “pricing inefficiencies and/or market timing” isn’t okay, and BetMGM let bettors know that playing “low-volume or unusual markets” will get them backed off.
Even to an impartial observer, this may seem like a strange way to do business. If a sportsbook doesn’t want to take a bet on an “unusual market,” why is it offering it?
“You have to understand your market, you have to price it accordingly, and when your menu is 90,000 items, you can’t possibly do that [every time],” Sigma Squirrel continued, “and the downside is that they are going to have lines up that are mispriced.”
Finding mispriced odds on a sportsbook is no different than an online shopper choosing the best price for a product on Amazon, he analogized:
Sportsbooks put bets on sale. They offer the price. They priced it. I’m buying the product they offered to me, and now they don’t wanna do business anymore.”
Accounts Closed
At least in some cases the letter of the new rule is being followed. In others, per reports, rather than notifying customers of being limited, betting accounts are simply being closed.
“The regulation was strictly directed at the practice of limiting,” an MGC spokesperson said in an email. “Closing accounts was not contemplated as part of this regulation.”
“We’ll watch behavior over the next several months, and if that’s what’s happening, I think the commission will take note of that,” Sigma Squirrel remarked. “I don’t think that’s the intended outcome of a player fairness regulation like this.”
Sportsbook Practices: Unfair, Unsustainable
While winning customers are limited by sportsbooks, losing players are incentivized to bet more. Not only is this dynamic unsafe from a responsible gaming perspective, it’s creating a slippery slope for operators.
Prediction markets are emerging as an attractive alternative to bettors responsible for a large chunk of handle, and the wallets of recreational gamblers are being depleted at a rate that’s unhealthy for the business.
DraftKings CEO Jason Robins hasn’t been shy about stating publicly that customers who are trying to win are not the kind of customers the company wants. That’s a risky stance for operators these days, per Sigma Squirrel.
When we’re having this conversation in a year, and handle has plateaued or is declining, and prediction markets’ handle continues to grow, we’ll see where we are.”
“The question is,” Squirrel continued, “should sportsbooks be allowed to exclude savvy customers to pennies or dollar limits while offering VIP customers 2[000] to 5,000 times the minimum bet limit. VIP programs are necessary, but the way this is structured, you’re kicking out skilled players and bankrupting your unskilled players, and both paths lead to declining business and tax revenue. So over the long run, this is not a workable path.”
Let’s Keep Talking
Revisiting the limiting regulation is not on the agenda of any of the MGC’s next three meetings (June 18, July 1, July 16), but the Commission vows to follow up.
“The Massachusetts Gaming Commission is proud to be the first regulator to address the issue of sportsbook limits. This regulation was a first step to help provide transparency to Massachusetts patrons,” Jordan Maynard, MGC Chair, said in a statement to Gambling Insider. “My fellow commissioners and I will continue to review this policy and work with staff and operators to ensure the intended impact.”
American Bettors’ Voice applauds the MGC for taking the first step and plans to stay engaged in Massachusetts and other states.
“We are at the ready to offer our point of view and guidance from the players’ perspective,” Sigma Squirrel said. “I think they’ve proven they want to get this right, and while this is less than the full solution, they are to be commended for taking action first.
“I think every state gaming regulatory body should look at Massachusetts and see that this is in fact happening and it is an issue, and it’s a fundamental player fairness issue and problem gaming prevention issue.”
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