U.S. Senator Raises Alarm Over Sports-Betting Companies Targeting Problem Gamblers

March 22, 2024
Connecticut Senator Richard Blumenthal continued to scrutinize the sports-betting industry on Thursday by challenging leading operators to end what he describes as the targeting of problem gamblers.

Editor's Note: This story was updated at 12:40 p.m. EST on Friday (March 22) with comment from the American Gaming Association.

Connecticut Senator Richard Blumenthal continued to scrutinize the sports-betting industry on Thursday (March 21) by challenging leading operators to end what he describes as the targeting of problem gamblers. 

Blumenthal said he has written to eight leading sports-betting operators — FanDuel, DraftKings, BetMGM, Penn Entertainment's ESPN BET, Fanatics, Caesars, bet365 and Betfred — to demand they stop leveraging data to target problem gamblers with promotions and advertisements.

He also urged operators to make it easier for problem gamblers to remove themselves from mobile sportsbook platforms, particularly as March Madness begins and fans are encouraged to wager on their favorite men’s or women’s college basketball team.

“What is happening during March Madness, and 365 days a year, every year, is the data collected by the companies in real time is weaponized or monetized to drive, promote at problem gamblers, instead of trying to provide options, treatment or self-exclusion,” Blumental, a Democrat, claimed during a press conference at The National Press Club in Washington, D.C.

“The companies know this,” said Blumenthal, “and that’s why they are continuing to make money from it.”

Messages seeking comment on the letters from BetMGM, and FanDuel were not returned Thursday.

“The legal gaming industry welcomes stakeholder interest across all levels of government,” said Cait DeBaun, vice president strategic communications and responsibility of the American Gaming Association (AGA).

”We look forward to this opportunity to share our impressive responsible gaming investments and innovations with Senator Blumenthal in the coming weeks,” DeBaun said in an email.

In his letter, Blumenthal expressed his concern about operators using data to engage in aggressive marketing practices that entice gamblers who spend the most to keep spending.

“I urge you to leverage the data you collect to identify problem gamblers and proactively provide these individuals with services, such as a confidential advisor, to help them access treatment,” he wrote.

Blumenthal also asked the operators to “quickly and frequently direct potential problem gamblers to transparent and easily accessible information on self-exclusion so they can remove themselves from your platform.”

“Further, I demand you end any promotions or marketing practices that encourage ‘high value’ gamblers to continue spending money through exploitative bonuses, credits and enticements,” he wrote. “Instead, you should divert the resources spent on these problematic practices to programs dedicated to treating individuals with gambling addiction.”

Blumenthal’s letter to sports-betting operators also requested answers by April 8 to a list of 15 questions focused primarily on how they protect their users and how they collect and use data.

“The letters demand that they do better to provide self-exclusion or treatment to people who are going down that rat hole,” the veteran senator said Thursday.

Blumenthal's move to send the eight letters was his latest effort to question some of the business practices used by sports-betting companies in the United States.

In January, Blumenthal introduced the Gambling Addiction Recovery, Investment, and Treatment (GRIT) Act in the Senate, while Representative Andrea Salinas of Oregon, also a Democrat, introduced companion legislation in the House.

The GRIT Act would specifically set aside 50 percent of the federal excise tax of 0.25 percent of the handle or total money wagered on sports in the U.S. for gambling addiction treatment and research.

Currently, Blumenthal said, all the money raised by the federal excise tax goes to the federal government's general fund. 

“In fact, there is no money going to [gambling] addiction treatment in this country,” Blumenthal said. “Billions go for treatment of drugs, alcohol and tobacco. They are all serious addictions, but gambling is as well.”

Blumenthal also made headlines in November 2022 when he sent letters to Caesars and the AGA to express his “grave concerns” about the gaming company’s efforts to promote sports betting on two college campuses in violation of advertising standards established by the industry’s own trade group.

Caesars previously agreed sports-betting partnerships with the athletic departments at Michigan State University and Louisiana State University. PointsBet, now owned by Fanatics, had also formed a marketing partnership with the University of Colorado.

“We wrote to them saying this is really wrong,” Blumenthal said. “We don’t have to spell it out for you, and they stopped. They are not impervious to public pressure, and I am hoping [the eight companies receiving the latest letters] will act the same.”

New Federal Bill Incoming

U.S. Representative Paul Tonko, a Democrat from New York, has also taken aim at the sports-betting industry and this week said he plans to introduce new legislation titled the Supporting Affordability and Fairness with Every Bet (SAFE) Act in the U.S. House of Representatives. 

Tonko said the bill would replace his so-called Betting on our Future Act of 2023, which sought to ban all digital and broadcast advertising for sports betting.

“Just as when it was determined that the tobacco industry was possibly a public health situation, we have now displaced Joe Camel with celebrity spokespeople,” Tonko said Tuesday. 

“This product becomes even more dangerous because with mobile sports betting the addictive product is in your pocket, in your hand.”

Tonko's new bill would not altogether prohibit sports-betting advertising but it would ban ads between 8am and 10pm and during live sporting events, while also introducing an Ontario-style restriction to prevent ads that induce gambling by referencing terms such as “bonus bets,” or odds boosts. 

In addition to advertising restrictions, Tonko's bill would effectively set up a federal oversight system for sports betting, according to a summary of the SAFE Bet Act provided to Vixio GamblingCompliance by his office.

States that regulate sports betting would have one year to align their regulatory regimes with new federal minimum standards for sports betting and receive authorization from the U.S. Attorney General.

Among other things, those minimum standards would prohibit operators from accepting more than five customer deposits in a 24-hour period and require operators to conduct “affordability” checks on customers before accepting large wagers.

The minimum standards would also prohibit operators from accepting credit card deposits and use of artificial intelligence would be banned for tracking a player’s gambling habits.

States would also have to require their licensed operators to participate in a new national self-exclusion system to be established via the federal government's Substance Abuse and Mental Health Services Administration.

“We are dealing with a massive and growing health crisis involving another addictive product,” Tonko said.

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