New York lawmakers could soon consider a proposal to make it illegal for sportsbooks to limit or ban customers simply because they win too often.
Assemblymember Alex Bores introduced the Fair Play Act in September, which would prohibit sportsbooks from banning or limiting bet sizes. The bill does make exceptions for instances tied to responsible gambling or integrity issues.
The New York legislature reconvenes in January. The bill is assigned to the Assembly Racing and Wagering Committee.
If the legislation is enacted, New York would become the first US market to implement such a rule. However, it is not the first state to look into the issue of limiting bettors.
States scrutinise limits on bettors
The Massachusetts Gaming Commission has studied the issue at length, including holding hearings with sportsbook operators. MGC commissioners said their focus is consumer protection. The MGC requested information last year for operator data on limiting and the results came in last month.
“Analysis confirmed that players who consistently beat the closing line are likely to have a lower stake factor, meaning have their limit lowered, and players who do not consistently beat the closing line are more likely to have a higher stake factor, meaning have their limit raised,” Carrie Torrisi, head of the MGC’s Sports Wagering Division, told the commission.
The data found that just a little more than one half of 1% of bettors are met with limits and the amount by which they are restricted varies. MGC Chair Jordan Maynard said the data confirms the complaints received last year from bettors, but also that the sportsbooks must manage risk. The commissioners said they would like to see better notification for the bettors about when and why their bets are limited, but the MGC took no action.
The Wyoming Gaming Commission also looked into the issue this year. It likewise found that sportsbooks limit fewer than 1% of accounts. Less than 10% of those instances were because of exploitation of a sportsbook’s error.
“Given all the data we’ve collected, staff does not see a problem in Wyoming with the limiting of sports wagering,” a report found.
New York sports betting market
Operators will likely fight to prevent any measure that could negatively impact their bottom line in New York. During the sports betting legalisation process, the sportsbooks opposed the 51% tax rate the market carries.
DraftKings and Penn Entertainment executives have discussed how restrictions on their ability to limit customers could be a negative for their business. Sportsbooks use the practice to help mitigate losses to sharp bettors.
“It is customary for sports betting operators to manage customer betting limits at the individual level to manage enterprise risk levels,” DraftKings said in its fiscal year 2023 report. “We believe this practice is beneficial overall, because if it were not possible, betting options would be restricted globally and limits available to customers would be much lower to insulate overall risk due to the existence of a small segment of highly sophisticated syndicates and algorithmic bettors, or bettors looking to take advantage of errors and omissions on our platforms.”
Still, New York sportsbooks have seen more than $74.9 billion in wagers since launch in 2019, a figure that exploded after the state’s January 2022 mobile rollout. That has brought in more than $3.4 billion in taxes, as the operators have generated $6.7 billion in revenue.
Other states, including Massachusetts and Wyoming, have studied similar practices amid growing debate over fairness in sports betting.