Many countries — such as the United Kingdom, Spain, and Australia, to name a few — are in the grips of a lot of hand-wringing over problem gambling, specifically online. Their respective markets are more mature than here in the U.S., and governments are stepping into the breach in an effort to stop gamblers from getting themselves in trouble, or help steer them into recovery. From advertising restrictions to disallowing credit card use for gambling, everything seems to be on the table right now.
But here in the states? Not so much. The nascent sports betting industry is like a teenager given a hot rod on their 17th birthday (we’re trying for a non “wild west” metaphor here). Each state that legalizes sport betting has their own rules, the federal government has remained hands-off since PASPA fell, and the sportsbooks — while not given carte blanche — are pretty much being given carte almost-blanche when it comes to dealing with problem gambling.
To be clear: The operators are all doing, at minimum, what’s required of them, and a few go further in trying to stem problem gambling.
But as more and more states open the floodgates, more and more Americans are going to have trouble controlling their gambling. Take Michigan, for example. In the first full month online sports betting and online casinos were made available, calls to the state’s gambling helpline soared 1,000% year-over-year.
It doesn’t take a doctorate in statistics or sociology to see the obvious: As more people gamble, there will be more problem gamblers, and more gamblers potentially grasping for a safety net that hadn’t previously existed.
This is the situation facing other countries, and the late-stage response has been for the government to come in and try to clean up the self-regulated mess.
I agree with Ruth Davidson on this. Gambling company advertising and sponsorship should be banned pic.twitter.com/duX3ywJqmV
— Andrew Adonis (@Andrew_Adonis) June 8, 2021
No one — not the sportsbooks, not the problem gambling advocates, and clearly (at least not now), not the federal government — wants to see the same thing happen here in America.
But past is prologue, history repeats itself. There is every reason for American operators to look at other countries and not wonder “will it happen here?” but instead wonder “when will it happen here?”
Unless they get proactive about it.
Sportsbooks need to lead the way
Sportsbooks need to use the technology at their disposal — and the technology to come — to identify problem gamblers and help them.
That’s the TL;DR takeaway of a recent paper by Christopher Snowden, written for the London-based Institute of Economic Affairs.
“Not every company uses their technology to prevent harm in the same way, but they could,” Snowden writes. “Best practice could be made standard. There is currently a mix of regulation, self-regulation, guidance, and private initiatives aimed at reducing gambling harm that could be consolidated, formalised, and made legally binding.”
While Snowden was writing specifically about the UK, his points resonate here across the pond.
“I absolutely think he’s 100 percent right on the power of technology for this field,” said Keith Whyte, the executive director of the National Council on Problem Gambling. “The future is profound, but also profoundly challenging. The terabytes of data the companies are collecting on their players will contain a lot of warning signs and clues for players who have gambling problems. We can never diagnose someone from their data set, but some of these markers of harm, some of these warning signs that are so glaringly obvious in these data sets … it creates an obligation, a responsibility, and a liability for the industry. If the industry says, ‘hey, we don’t want to be over-regulated because we’ve got all these great behavioral data tools to address responsible gambling,’ then they’re going to have to own that.”
Whyte makes clear he’s not a prohibitionist, but he does think the triad of operators, regulators, and problem gambling advocates need to do exactly what Snowden is advocating: Create best practices and make them legally binding.
“It’s a three-legged stool,” Whyte said. “If you want to stave off regulation, you have to start now. It’s high time.”
Plenty of action, but more is needed
Sportsbook operators in America are not doing what Snowden is advocating. They are doing a lot, but the worry remains: To prevent the potential of the heavy hand of government, a more proactive approach is probably needed. Again: History repeats itself.
Here’s a sampling of some highlights of the sportsbooks current approach to dealing with problem gamblers …
- “We take responsible gambling very seriously and aim to create the safest possible playing environment for all of our BetRivers.com and PlaySugarHouse.com customers,” said Mattais Stetz, the COO for Rush Street Interactive. “Toward that end, we have a variety of resources available, including online tutorials detailing how to establish wagering limits, as well as how to initiate ‘cooldown’ periods for example. And we have links to problem gambling support readily accessible on all of our sites and apps, all with the goal of ensuring a safe playing environment.”
- “PointsBet has multiple measures in place, including pre-commitment limits on deposit and spend, and have been viewed as industry leaders for responsible gaming efforts and awareness,” said Patrick Eichner, the director of communications for PointsBet. “Additionally, PointsBet’s commitment to responsible gambling has helped push the industry standard for the better, making the message and commitment to awareness more prevalent across all operators.”
- DraftKings, through a spokesperson, states that, “We have aggressive systems in place to flag potential issues, and we have teams trained on intervening and escalating things that need to be addressed by others who are specialists trained to deal with these types of things.”
- Kevin Hennessy, the spokesperson for FanDuel, brought much of the industry into the fold when discussing this. “I think FanDuel, DraftKings, Pointsbet, and MGM do a lot for responsible gaming. We all have tools in place to provide customers with ways to manage their play. We also provide new states with tips on how to do RG better when rules are set up.” Hennessy further pointed out FanDuel offers customers GamBan subscriptions, which blocks all gambling sites.
DraftKings is proud to support Problem Gambling Awareness Month.
— DraftKings (@DraftKings) March 1, 2021
Again, to be clear: Plenty is being done by the industry on this front. But, as Snowden — who, it must be noted, is the brains behind the NannyStateIndex.org (translation: he’s not a “heavy hand of government” advocate, to say the least) — points out, more can be done. Much more. And while “more” is not mandated, taking a peek at the woes operators are facing in other countries should be a wake up call to step up the game here in the colonies.
Three legs needed
“So many operators are doing what is expected of them for licensure and compliance, and who can fault them for stopping there when there’s never been a need for them to change that?” said Brianne Doura-Schawohl, the VP of US policy and strategic development for EPIC Risk Management. “It’s been a few of the U.K. operators moving into the U.S. space saying, ‘hmm maybe we should go above and beyond because I know what it feels like across the pond where I’m facing overly burdensome, cumbersome regulation, which is all predicated on this public health outcry involving gambling addiction.’”
And that’s exactly what it is, as Snowden pointed out in his paper. There are plenty of prohibitionists in other countries seeking to shut down the whole of gambling, claiming it’s a public health issue that needs drastic measures.
Let’s ban gambling and save lives.
— Paul O’Connor, #FBPE (@POCX100) June 13, 2021
Snowden thinks no matter what anyone does there will always be problem gamblers, and if the industry wants to avoid a nightmare scenario, they have to take ownership of the issue.
So, what, exactly, is Snowden advocating? Nothing too draconian, that’s for sure. Basically, it’s leveraging the information the sportsbooks are already gathering on their players — and using all current and future technology at their disposal — to make sure no one is getting in too deep. From gentle email reminders to phone calls, and all the way up to account suspension. The way Snowden sees it, if the industry takes the lead and does (very literally) all they can do, there would be no basis for an intrusive and disruptive government inquisition that could, potentially, lead back to some form of prohibition.
Much like Whyte, Doura-Schawohl is not a prohibitionist. But also much like Whyte, she sees a potential future of the federal government getting involved, and would like to help the sportsbooks avoid that.
“Rutgers does a study every few years on the prevalence of gambling disorders, and last time they did it, it was at 6%, which is three times the rate of the perceived national average. But no one is changing anything by way of regulations to try and get that number down and a little more stable,” she said, “Even prohibition of gambling isn’t going to cure gambling addiction, which is why I’m not for prohibiting it, but you have to do something once you know there’s a problem. I think the U.S. is setting itself up in so many ways to replicate what’s happening in more mature markets. They are not being proactive. If they (the operators) continue in the trajectory the industry is shaping right now, if there is an eventual public outcry and the government feels the need to intervene, it wouldn’t just be a gambling addiction intervention. It would be a one fell swoop, gambling addiction and gambling intervention. And that’s not ideal for anyone.”
Much like Whyte, Doura-Schawohl sees a way forward, with the government taking a role, advocacy groups taking a role, and the operators leading the charge.
“All three legs of that stool have to be on the same page and I think we’re starting to get there,” she said. “We’re starting to have these discussions, starting to engage with the industry about how to not find ourselves in a similar predicament. We already can see negative trends emerging, New Jersey with the 6% prevalence, Michigan and Tennessee with increasing calls to help lines. If we intercept the issue now, by having these tough discussions and finding that balance, there is hope to be had, but there’s a lot of work ahead of us. A lot of self-reflection about intentions and what is best for long term gains and not just short wins. Right now it’s hard because everyone is focused on customer acquisition. And don’t forget, for this to work … well, the industry is only as strong as its weakest link.”
‘A cautionary tale’
“I used to work at the AGA, believe me, I understand self-regulation,” said Whyte. “One of the biggest things that led to the backlash in the U.K. — which is squarely at the feet of self-regulation — is that self-regulation only works when every single company meets those standards, and holds not just themselves, but everyone accountable. One company that behaves unethically or breaches the guidelines, the whole foundation of the system crumbles.”
Whyte sides with Snowden with the idea of having set rules that the operators and advocacy groups hash out, but that are also enforceable by law.
But to even think about getting there, everyone has to agree to be on the same page, namely that it’s time to look ahead before it’s too late.
“What I keep hearing is ‘we’ll get around to responsible gambling once we get our market share,’” Whyte said. “But that’s inadequate and too late. I do think while the situations are different, the UK is a cautionary tale. Industry self-regulation can only take you so far. I think there are a number of obvious weaknesses with industry self-regulation that can lead to public backlash, political backlash, media backlash, consumer backlash. And that’s what we’re seeing in the UK. No one wants to see that here.”