Massachusetts Discusses Sports Wagering Limits on Winning Bettors

The Massachusetts Gaming Commission (MGC) conducted a meeting last week to discuss the evergreen betting issue around operators’ policies of placing selective wagering limits on customers. These practices inadvertently limit the potential of winning customers to maximize their sports wagering portfolio by restricting the volume a bettor can wager.

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What Are Sports Wagering Limits?

Several sportsbooks have the ability to place restrictions on betting volume for a certain event to ensure platform liquidity and manage risk. These operators also have the option of restricting volume for select customers.

While these limits are discretionary, they can also be unfair to customers who use different betting methods that rely on volume, such as arbitrage or hedging, to pick up a profit on a certain event.

“We did get some outreach, just so the public knows, through emails,” interim MGC chair Jordan Maynard said at Thursday’s MGC 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?” 

Andrew Steffen, the MGC’s sports wagering operations manager, told the committee that these practices fall under a Massachusetts statute called Minimum and Maximum Wagers: Additional Wagering Requirements.

According to this statute: “Unless otherwise directed by the Commission, there is no limitation as to the minimum or maximum wager a Sports Wagering Operator may accept,” the statute reads. “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.”

Sportsbooks Fall Back on Regulatory Rights

According to state rules, operators can claim the regulatory right to limit customers for risk management and to preserve the integrity of a sporting event. This, in essence, means that these sportsbooks have the ability – within state rules – to make independent decisions about whether a proficient bettor has the option of wagering their desired volume. Several customers wrote directly to the MGC seeking an explanation of the legality and ethics of such practices.

DraftKings, based in Boston, has a specific rule allowing for the operator to set wagering limits on customers: “All bet selections are subject to pre-imposed limits set solely at DraftKings’ discretion which may be lower than the limits mentioned in the Sport Specific Limits and/or mentioned elsewhere on DraftKings’ platform. Should this limit be reached, the Authorized Account Holder has the right to ask for it to be exceeded by means of a request effected through DraftKings’ platform. DraftKings reserves the right to accept ((fully or partially) or reject the said request without any prior notice and further explanation.”

The MGC’s commissioner noted that these are legal decisions made by operators but that a middle ground needs to be found to protect both the sportsbooks and the customers in the Bay State. “For me, this is about fundamental fairness and transparency to the consumer, to patrons, where you have a situation where a patron is losing and being encouraged through outreach, by an operator’s VIP staff, and incentives. What’s the balance when that same patron begins to win?” Skinner said.

“I understand there are probably legitimate business decisions that are made by our sports wagering operators here. I don’t discount any of those. But I do think there should be a way for patrons to really understand what might get them limited. How big of a problem is this, and can we find that sweet spot such that the sports wagering operators are protected in terms of their business model and the consumer is protected?”

Deeper Issue Around Individual Customers

While these practices certainly ensure the smooth functioning of operators, commissioner Eileen O’Brien said there is a deeper issue surrounding individual patrons. “Their house rules talk very vaguely about management at their sole discretion. What I’m curious to know as a commissioner is: what’s the basis for that?” O’Brien said.

“How and why are they making these determinations, because I think that’s critical to whether we need to amend this and help us as we go forward with the research with AI and whether or not we’ll be moving into a regulation that would require some of the information that may very well be going into these limitation determinations to proactively flag problem gamblers.”

Massachusetts Revenue Falls 17% in February

The MGC also reported that sports betting handle fell below $600 million for the first time in four months in February with wagers of $542.5 million, a 16.8% drop from January. In February, sportsbooks recorded a hold of 9.93%, which also dropped significantly from 11.16% in January.

Eight online sportsbooks — BetMGM, Betr, Caesars Sportsbook, DraftKings, Fanatics Betting & Gaming, FanDuel, Penn Sports Interactive, and WynnBet — collected $530.2 million in February. This resulted in total taxable gaming revenue passing $50 million. At $51.8 million in revenue in February, the state collected $10.4 million in receipts from online sportsbooks alone.

DraftKings maintained dominance in its home state by collecting $270 million in betting handle with a hold of 11.66%. Of the $51.8 million in revenue for the state, DraftKings contributed $30.8 million in gross gaming revenue with tax payments of $6.1 million to the state.

READ MORE:

• A One-Year Retrospective on Massachusetts Sports Betting
• Massachusetts Records Second-Highest Sports Betting Handle in January
• Betr and WynnBET Massachusetts Exit Dates Approved