Representatives for major U.S. sportsbooks participated in a virtual roundtable discussion with the Massachusetts Gaming Commission on Wednesday and defended the controversial bookmaking practice of restricting how much sharp bettors are allowed to wager.
It's a topic that bookmakers have mostly avoided as the U.S. market has taken shape over the past six years. In fact, this May, sportsbooks went so far as to abruptly pull out of a meeting called by the Massachusetts Gaming Commission (MGC) to discuss the limiting of bettors and whether impacted consumers are being treated unfairly.
A spokesperson for the MGC told ESPN in August that when the commission first began to look into the issue, it received approximately 60 emails on the topic. Prompted by complaints from its residents, the MGC demanded licensees participate in the discussion and provide more transparency. On Wednesday, Bally's, BetMGM, Caesars, DraftKings, Fanatics, FanDuel and Penn Entertainment (operator of ESPN BET) were among the sportsbook operators represented.
"BetMGM limits approximately 1% of Massachusetts patrons presently," Sarah Brennan, senior director of compliance for BetMGM, told the commission. "It is our ability to limit that small minority of advantage players that allows us to continue to offer competitive lines, competitive odds in a wide variety of markets for 99% of non-advantage players that play with us."
A FanDuel representative said it limits an even smaller percentage of bettors compared to BetMGM, and the consensus among the sportsbooks was that only a tiny fraction of patrons are impacted by "stake factoring," a gambling industry term for limiting how much some customers can wager.
The sportsbooks said bettors may be limited due to betting on mistake lines, abusing bonus offers or simply having a "better model" or "more information." They insisted it was not based on winning, but more about the approach some bettors were taking.
"Nearly half of the small population of limited customers were actually net losing with Fanatics at the time they were limited, which I really think drives home the point that we're not looking at the results," Alex Smith, senior vice president of compliance for Fanatics, said during the meeting. "We're looking at the way they're wagering."
But it's the way sharp bettors wager -- including hunting for advantageous odds -- that makes them successful over the long term, critics say.
"You've heard them talk about advantage players. The translation for that is a good player, a good bettor, a smart player," gambling journalist Jeff Edelstein said during the meeting. "They are saying, 'We don't want smart players. We don't want good players, because we see them as a threat.'"
MGC commissioners expressed specific concern that recreational bettors were being caught up in the sportsbooks' approach on limiting and said the consumers they were hearing from often cited a lack of communication from the companies on why they had been limited.
Brianne Doura-Schawohl, a consultant specializing in problem and responsible gambling policy, said the practice of limiting bettors brings questions to the validity of sportsbook advertising. "If I win and I win enough, I actually can't play with you," Doura-Schawohl said. "From a consumer perspective, to me, this really calls in question the truth of advertising."
Wednesday's three-hour meeting concluded with promises to examine the issue further. However, there were no commitments from either side on next steps.
Brian Chappell, founder of the bettor advocacy group Justice for Punters in the United Kingdom, had predicted that the issue of sportsbooks limiting customers would come to a head in the U.S. when legal betting began spreading around the nation in 2018.
"Sadly, American regulators have sleepwalked into a situation I predicted in 2018," Chappell told ESPN this week. "Like the U.K., the large [bookmaking] corporations they have licensed aren't bookmakers; they are accountants who find risk unacceptable."
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