Top U.S. Sportsbooks Unite to Address Problem Gambling

Seven of the nation’s largest gaming companies are teaming up to establish a trade group focused on promoting responsible gaming. In a groundbreaking move, they will also share information concerning problem gamblers.

The seven operators—FanDuel, DraftKings, BetMGM, Penn Entertainment, Fanatics Betting & Gaming, Hard Rock Digital, and bet365—will collectively form the Responsible Online Gaming Association (ROGA), as announced by the group on Wednesday.

Together, these members represent over 85% of the legal online betting market in the United States. They have committed upwards of $20 million to support ROGA.

“I’m incredibly excited to move this forward and to really do some impactful things and to really expand the knowledge through the research and to create these evidence-based best practices and to really empower players with information,” said Jennifer Shatley, executive director of ROGA.

ROGA members are dedicated to collaborating on various issues, including education, implementing responsible gaming best practices, and promoting conscientious advertising and marketing throughout the industry.

The newly established group will additionally develop an independent clearinghouse, or database, enabling them to exchange crucial information related to consumer protection, although the specific operational details have yet to be fully clarified.

ROGA has outlined plans to introduce a certification program aimed at evaluating members’ efforts in promoting responsible gaming, offering incentives for operators to engage in the process.

The emergence of this consortium coincides with the significant growth of sports betting, both online and in brick-and-mortar establishments, across the nation since 2018. Presently, thirty-eight states and Washington, D.C., have legalized sports wagering.

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This year witnessed a record-breaking number of Americans participating in Super Bowl betting activities. According to the geolocating platform GeoComply, online transactions surged to nearly 15,000 per second, doubling last year’s peak.

However, as gambling becomes increasingly normalized—accompanied by extensive advertising for sportsbooks across television, streaming services, and social media feeds—so do the headlines concerning betting scandals and their impact on sports.

In recent days, Los Angeles Dodgers superstar Shohei Ohtani has been thrust into the spotlight amidst a $4 million betting scandal involving his interpreter and an illegal bookmaker.

Ohtani maintains that he has never participated in sports betting activities. Meanwhile, the NBA is conducting an investigation into Toronto Raptors player Jontay Porter regarding suspicious activities related to wagering.

Additionally, U.S. Integrity, a technology firm specializing in combating illicit betting in college sports, has identified anomalies surrounding the betting lines for Temple University men’s basketball games.

These allegations have the potential to incite public outrage and criticism, potentially serving as a pivotal moment for the U.S. gambling industry. Moreover, there is concern that the rapid expansion of gambling could compromise the integrity of sports and lead to increased risks of addiction among bettors.

“Problem gambling” affects a significant portion of the U.S. population, with an estimated 2 million adults meeting the criteria for severe gambling addiction, as reported by the National Council on Problem Gambling. Additionally, another 5 million to 8 million adults in the U.S. are classified as having mild to moderate gambling issues.

The prevalence of problem gambling has prompted regulatory actions in Europe, particularly in the United Kingdom, over the past few years. These actions have impacted the profitability of sportsbooks and forced changes in their business practices.

In response to these challenges, there has been a concerted effort within the United States gambling industry to self-regulate and prevent the imposition of stricter regulatory measures.

U.S. Representative Paul Tonko of New York is leading efforts at the national level to address what he perceives as “a public health crisis.”

Tonko recently introduced the “Supporting Affordability and Fairness with Every Bet Act,” which aims to regulate gambling advertising, impose limits on the size and number of deposits, and restrict the use of artificial intelligence for customer acquisition purposes.

“You’re going to have a lot more people saturated with this opportunity, with all these clever concepts of bonus bets, free bets, and celebrity spokespersons,” Tonko expressed to CNBC.

He warned that an influx of gamblers would inevitably lead to a significant rise in the number of individuals struggling with addiction.

Several states have taken action against operators for gaming violations. For instance, in August, Maryland imposed a $94,000 fine on DraftKings for marketing to underage players. PrizePicks agreed to a $15 million settlement in New York for operating illegally.

In Indiana, FanDuel was fined by the gaming commission after eight individuals used unlawfully obtained debit cards to fund their betting accounts, resulting in “great harm” to partners sharing bank accounts, as stated by Indiana Gaming Commission Chairman Milton Thompson.

“Customer protections” have become a topic of debate within the gambling industry, with some insiders expressing skepticism regarding the effectiveness of the Responsible Online Gaming Association (ROGA). They view it as merely a marketing tactic to address public relations concerns.

Notably absent from the founding members of ROGA is Caesars, a company with 35 years of experience in exploring responsible gaming issues. Caesars stated that it has developed its own best practices over the years and remains committed to responsible gaming.

The company emphasizes its strict adherence to age restrictions, allowing only individuals aged 21 and older to sign up for Caesars rewards accounts, even in states like Rhode Island or Kentucky where the legal gambling age is 18.

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While many fantasy sports and social betting platforms permit players aged 18 and older, Caesars’ competitors also cater to this demographic. Some even allow sports betting for individuals in this age group in states where it is legally permitted.

Nevertheless, the industry as a whole is actively striving to protect its youngest and most vulnerable customers. The American Gaming Association initiated an agreement last March aimed at implementing protections for college-aged students against the marketing and advertising of sports betting.

Peter Jackson, CEO of Flutter, the parent company of FanDuel, emphasized that responsible gaming is not only a moral imperative but also essential for maintaining a successful business.

However, he cautioned that despite legal operators’ efforts to enhance responsible gambling measures, the illegal gambling market remains a threat, particularly in catering to problem gamblers.

“I urge state regulators to support us in combating these black market operators,” Jackson stressed in an interview with CNBC.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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