College sports wagering scandals hit the University of Iowa and Iowa State University this spring, with each school suspending multiple athletes. Several of the violations led to criminal charges being filed.
A handful of players, including Iowa State quarterback Hunter Dekkers, who placed underage wagers via an account shared with his parents, recently agreed to plea deals.
The Iowa Racing and Gaming Commission’s regular review of its gambling regulations included a few notable proposed changes to sports betting rules, which were posted Aug. 24. Among the proposed changes are stricter rules against account sharing, seemingly in response to the in-state college scandals.
Dekkers wagered on legal platforms using someone else’s account not only because he was underage, but because his name also appears on involuntary exclusion lists available to operators and regulators since he’s a member of an NCAA football team. The NCAA prohibits athletes from betting on any NCAA-sanctioned sport.
“This seems like a knee-jerk reaction to everything that happened in Iowa,” an industry consultant told Sports Handle.
The rules aren’t finalized yet — that process can take 3-6 months, according to the IRGC — but the initial proposal includes some potential challenges for operators. The written public comment period on the proposed changes runs through Oct. 10.
“The notice process is very preliminary, and it’s quite likely we could see some modifications as it moves through,” IRGC Administrator Brian Ohorilko told Sports Handle.
Inside the proposed changes
The proposed changes include specific language that requires Iowa sports betting operators to clearly display that people under the age of 21 are not allowed to wager on the platform and that account sharing is prohibited.
Massachusetts has a similar standard for underage betting, with its regulations also requiring all sports betting advertising to include visible language that sports wagering is only legal for customers 21 and older. Regulators there also went a step further, requiring earlier this year that any sportsbook logo that is visible in or from a sports stadium include a “21-and-older” notification on it.
Other proposed changes in Iowa include more detailed know-your-customer (KYC) steps in the account registration process, as customers will need to provide not only their name, address, and age, but also their Social Security number, date of birth, and ID verification. Proposed regulations include lines about operators needing proper geolocation tools to detect (and subsequently report) potential fraudulent activity.
Iowa was one of the first 10 states to offer legalized mobile sports betting when it launched operators in 2019, and since then has regularly reviewed its regulations in an effort to stay current with sports betting technology enhancements. Recent technological improvements include the ability to quickly move a customer through a detailed KYC process.
“We feel that the model is strong in Iowa, and these enhancements will just continue to build on that,” Ohorilko said.
Another noteworthy proposed regulation would require customers to use multi-factor authentication at least once a week. The industry source told Sports Handle that could require tech work for mobile sports betting operators, which may lead to operators pushing for a move to mandatory multi-factor authentication use every 14 days. Pennsylvania’s regulations require multi-factor authentication every two weeks.
Proposed regulations would also mandate that operators not allow customers under the age of 21 to fund sports betting accounts.
One regulation requires operators to either maintain their own list of prohibited bettors or use a third party (U.S. Integrity’s Prohibet would be a likely source) to have a list of prohibited bettors. That’s not an entirely different regulation, but some of the language added to the proposed regulation is new. The proposed regulation calls for operators to prohibit wagering from not only coaches, athletic trainers, officials, and players, but also “persons employed in a position with direct involvement with coaches, athletic trainers, officials, and players.”
Likely operator feedback
There could be some questions from operators about the prohibited betting list regulation. Every operator has a list of banned customers, and the regulator is a clearinghouse for excluded lists in some jurisdictions, but Iowa’s proposed regulation may be easier to implement in theory than in practice.
The industry consultant called it “impossible” for an operator to realistically manage a prohibited betting list that expands to not only players and coaches, but also trainers and people close to coaches, trainers, and players. That list could be hundreds of people long for each college athletic department, considering the number of college sports available for wagering.
There are more than 350 Division I men’s basketball teams, for example, all with more than a dozen players in addition to coaches, trainers, academic advisers, and more. There are over 130 FBS football teams, each with a roster size of around 100 players before accounting for coaches and support staff.
Similarly large numbers exist across professional sports. Maintaining a list that lengthy is a challenge, and if an operator relies on ProhiBet or another outside source rather than an in-house effort, there’s still the question of whether ProhiBet is receiving sufficient information from every professional team or college or university to track every prohibited bettor. ProhiBet is a paid service, and not all pro sports, colleges, or universities have signed on.
“It’s only as good as the information ProhiBet is being provided,” the industry consultant said.
Brendan Bussmann, a managing partner of B Global, understands the IRGC’s desire for increased specificity across some of the proposed rules. He questions how much the operators can realistically crack down on the account-sharing violations at the center of some of the recent collegiate scandals.
“If we need to spell things out more to make everybody happy, I guess that’s OK,” Bussmann said. “But the fact of the matter is, in some cases, I don’t know how operators are going to be able to come after this.”
According to the complaint from Story County, Dekkers engaged in the scheme with Scott and Jami Dekkers enabling Hunter to disguise his identity and manipulate online/mobile transactions in order to create the appearance that sports wager transactions conducted by Hunter were… https://t.co/Khusk3pmvK
— Jeff Dubrof KCCI (@JeffDubrofKCCI) August 1, 2023
Operators can follow those regulations thoroughly, but there are still ways for people to skirt the rules. It’s nearly impossible for an operator to detect if a parent hands their college-aged child their phone to place wagers while a student visits home for Thanksgiving break.
“At some point, personal responsibility comes into this, and we can’t legislate enough for stupidity,” Bussmann said. “We can’t legislate for the minority, and we can’t legislate for stupidity because otherwise there’s not a manageable entertainment activity here.”
How to fix the problem?
Account sharing and underage betting are issues, but it’s unclear if the Iowa regulations will be able to sufficiently cut down on those activities.
Brianne Doura-Schawohl, a responsible gambling consultant, says the IRGC’s effort to prevent account sharing is admirable. Data suggests that the earlier children are exposed to gambling, the more likely they are to develop a gambling problem later in life. If an adult shares a betting account with an 18-year-old under the belief that it’s harmless fun, it could lead to issues for the underage bettor in future years.
“We need to ensure that we are preventing individuals from having access to something that could cause them harm later in life,” Doura-Schawohl said.
If an operator fails to keep up with account-sharing regulations or underage betting rules, Doura-Schawohl wants to see state regulators more strictly enforce penalties for those violations so the consequences of an operator’s shortcomings are felt.
Responsibility doesn’t fall solely on the operator, though. In some cases operators follow the regulations perfectly, but people still break state regulations by sharing betting accounts. In that instance, she’d like to see improved education from regulators.
“Enforcement is really key here, but so are educational campaigns to the consumers,” Doura-Schawohl said. “I don’t feel as though the states are doing enough to talk to players and parents and children about the seriousness of allowing someone else to play on your account.”
Sharing responsible gambling best practices with not only younger people, but also their parents, could prove beneficial to protecting younger people.
Iowa’s specific rule proposals appear to target the incidents seen at Iowa and Iowa State, but it may take a larger effort from educators, regulators, and operators to really address the issue of underage betting and account sharing.
“I think the intent is very clear, and it’s appreciated by operators,” the industry consultant said of the proposed rules. “Everyone wants to be compliant, and no one wants to implicate their business by accepting wagers from prohibited bettors, but in reality there’s only so much that can be done from a practical standpoint.”