Massachusetts Sports Betting Seeking Another Rule Change

Massachusetts sports betting regulators are campaigning for yet another layer of consumer protection. And this time, they are taking aim at sportsbook VIP programs.

More specifically, policymakers want more information on such promotions from operators of sports betting in Massachusetts. As of now, they are concerned that these programs unnecessarily, if predatorily, target people who don’t have the income to warrant being treated as higher rollers.

“VIP programs should be for those who can afford to be VIPs, and it shouldn’t be predatory,” the Massachusetts Gaming Commission Chair, Jordan Maynard, recently said (via Michael Linnehan of Sports Betting Dime). “This jurisdiction cares about things like that. This goes hand-in-hand with the conversation we just had on limiting, and continue to have on limiting.”

Critics will highlight the hypocrisy in Maynards’ comments. Many do not believe that you can claim to be advocates for consumers while providing Massachusetts sports betting. Multiple studies have shown a direct correlation between legalized sports betting in the United States and an uptick in problem gambling reports. If states were truly concerned with the well-being of their residents, opponents believe, they wouldn’t make gambling so readily accessible.

Everyone is free to draw their own conclusions on this matter. However, the fact remains that Massachusetts sports betting isn’t going anywhere. The same can be said, as of now, for the industry at large. As supporters correctly point out, people would just flock to offshore betting sites if sports gambling wasn’t legal. That is what happened before the Supreme Court of the United States overturned the Professional and Amateur Sports Protection Act back in 2018.

Lawmakers in most states tend to agree that a regulated domestic market is safer. This runs counter to the rise of problem gambling reports, which makes the issue debatable. Still, relative to the legalized sports betting industry, Maynard is correct: The Bay State has shown more interest in protecting patrons. The push for transparency on VIP criteria is just the latest example.

Massachusetts Sports Betting Sites May Have to Provide More Data on Their VIP Programs

Here is Linnehan with a fuller breakdown of what Massachusetts sports betting regulators are after:

“VIP programs are typically low in number of customers, but represent a high percentage of total betting volume and gross gaming revenue across major operators, per Mark Vander Linden, Director of Research and Responsible Gaming. The programs are exclusively for patrons deemed ‘high value’ and regularly bet large amounts of money. Often, users are pressured with time-sensitive offers to bet more money, or play more often, to reach a higher tier of VIP status, Vander Linden reported.

While research is lacking on the evidence of harms linked specifically to VIP programs, Vander Linden said given that gambling frequently and spending substantial amounts on gambling are associated with increased risks of gambling harm, it then follows that loyalty and VIP programs may be associated with higher-risk gambling behavior. ‘Loyalty and VIP programs have been shown to encourage people who have resolved to stop gambling, or problem gamblers, to return to gamble to maintain that loyalty tier or achieve that higher tier, Vander Linden said’”

Basically, sports betting VIP programs are eerily similar to rewards programs at any customer-facing business. The difference is, rather than spending money in exchange for tangible goods that help you rack up points and reach certain tiers, you’re flat-out wagering cash or lines of credit.

This type of dynamic lends itself to more problematic spending. For example, you most likely wouldn’t try to offset a regrettable purchase at a clothing store by buying something else. When it comes to betting on sports, though, you may be more likely to chase bad beats with other wagers. This opens the door to more extreme forms of debt and gambling addiction.

This Latest Debate Aligns with the MGC’s Overall Agenda

The frequency with which VIP programs advertise, as noted in Linnehan’s piece, requires more research. Even without that data, though, the stakes are high. It is one thing to direct advertisements toward clients with disposable income to bet on sports in Massachusetts. It is another thing to target prospective members in a tighter financial situation.

This is the crux of the MGC’s issue with VIP programs. They want to know how sportsbooks decide who warrants the offerings. Ideally, they probably want Massachusetts sportsbooks to set an annual income threshold. This jibes with other discussions that have taken place in recent months.

Prospective betting limits in Massachusetts have received a lot of attention over the past year. Various lawmakers are also in favor of requiring sportsbooks to underwrite thorough financial background checks as part of the registration process. These are all measures many believe can help stem not just Massachusetts sports betting issues, but gambling problems in the United States at large.

It is a reasonable hypothesis on the surface. Sportsbooks, of course, do not feel the same way. They have and will continue to push back on various legislative agendas. It isn’t just about the money they’ll have to spend on stricter regulation. It’s about the money they could lose by being forced to adjust their promotional practices.

In turn, operators argue that restricting access even further will drive legal sports betting customers back to unregulated markets offshore. It’s unclear how much weight this case holds. Especially because Massachusetts sports betting regulators are among the first to push for such aggressive regulation. If it catches on, we could see more states follow suit. If these messages fall flat, we may not see much change anywhere. All of which, by extension, makes the Massachusetts sports betting market one to watch.

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