🤑 Weeding Out Winners

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Welcome back to the Bandit Betting Newsletter, where we deliver the top stories in sports and gambling directly to your inbox, every Sunday.

In today's email:

• Deep dive: Sports Betting Companies Weed Out Winners. Gamblers Want to Know Why.

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LIMITING WAGERS

Bettors and regulators seek more clarity on why platforms limit wagers by some successful customers

Online sports betting companies, leveraging celebrity endorsements and offering perks, promote the alluring possibility of winning. However, some successful gamblers, like Dave Holmes in Chicago, find their bets limited or outright rejected by companies such as BetMGM, ESPN Bet, and Caesars.

Holmes, who employs a math-based wagering strategy, mentioned that as he began winning more, these companies reduced his typical $100 bets to as little as 50 cents. "I would love to actually be given an answer to why it’s happening, and they refuse to do that," Holmes said.

Frequent gamblers analyze odds on various sports, from the NFL to table tennis, seeking advantageous wagers much like hedge funds identify undervalued stocks. Bettors who face restrictions express frustration over the lack of transparency.

Earlier this year, the Massachusetts Gaming Commission held a public discussion on wager limits, seeking to understand how online sports-betting companies determine the amount of money they accept from individual customers.

Several licensed sports-betting companies, including DraftKings, FanDuel, BetMGM, Caesars, ESPN Bet, and Fanatics, agreed to attend the session but later declined, citing concerns over disclosing proprietary business information.

They have since agreed to collaborate with the commission. (Fox Corp. holds a stake in FanDuel's parent company, Flutter Entertainment. Fox and Wall Street Journal parent News Corp share common ownership.)

Companies reward big bettors with VIP programs, offering thousands of dollars in free bets and other perks.

Sports-betting companies do not regularly disclose the number of customers subject to limits or included in VIP programs.

Nakisha Skinner, a Massachusetts Gaming Commission member, voiced concerns about transparency and fairness, stating, "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?"

Sports-betting executives argue that limited bettors represent a small fraction of their customer base and are usually professional gamblers, unlike most customers who bet for entertainment.

Companies say heavy betting with promotions can lead to limitations. Sophisticated risk-and-trading desks monitor money flows through various bets to minimize losses while offering attractive odds.

These measures, they argue, are necessary for profitability.

Michael Holt, residing near the South Dakota-Iowa border, drives to Iowa for legal online sports betting. During March Madness, he placed several $50 bets, winning some, but soon found ESPN Bet and Caesars limiting his bets to $5 or $10.

DraftKings and FanDuel have not yet imposed limits on his bets. Holt, who wagered $1,000 on the ESPN Bet app and won $1,200, said, "The fact that they flagged a $200-worth of a player is kind of crazy to me."

A DraftKings spokesman explained the company's stance, stating, "We restrict less than 1% of players below the market limit based largely on betting behaviors."

Penn Entertainment, which operates ESPN Bet, informed Massachusetts regulators that customers receive on-screen messages when wagers exceed their approved limits, which can be updated in real time. Customers can also request limit increases.

Holmes, who has won nearly $50,000 since adopting his mathematical approach to gambling, finds the lack of transparency from companies frustrating.

Holmes has been limited by five companies without any explanations, reducing his ability to wager from $100 to as little as $10, $25, or $50 depending on the company and the type of bet.