A recent regulation in Massachusetts has not been well-received by sharp bettors, although the state's gaming commission has been praised for acknowledging their concerns.
The new rule mandates sportsbooks to inform customers about the reasons behind any betting limitations, a move that many industry insiders anticipated. The notices received by sharp bettors since the regulation took effect on June 1 can be interpreted as, “We don’t want your business.”
This regulation is seen as a significant advancement in the efforts of player advocates aiming to foster a more equitable and sustainable sports betting landscape. However, according to Sigma Squirrel, a board member of the American Bettors’ Voice who assisted the Massachusetts Gaming Commission in formulating the rule, further action is necessary.
“It’s a crucial development that state regulatory bodies are recognizing that player limitations are genuine and occur more frequently than online sportsbooks (OSBs) report, often for reasons beyond simple cheating,” Sigma Squirrel shared with Gambling Insider this week. “What they discovered in Massachusetts is that players who excel at spotting advantageous odds are often the ones facing restrictions.”
For instance, FanDuel informed its customers that exploiting “pricing inefficiencies and/or market timing” is not permissible, while BetMGM cautioned bettors that engaging in “low-volume or unusual markets” could lead to restrictions.
To an unbiased observer, this approach may appear counterintuitive. If a sportsbook is reluctant to accept bets on an “unusual market,” why is it even offering such options?
“Understanding your market and pricing it appropriately is essential; with a menu of 90,000 items, it’s impossible to do that every time,” Sigma Squirrel explained. “The downside is that they may have mispriced odds available.”
He likened finding mispriced odds on a sportsbook to an online shopper searching for the best deal on Amazon: “Sportsbooks offer bets at set prices. I’m purchasing the product they presented, and now they no longer want to conduct business.”
In some instances, sportsbooks are adhering to the new regulation, while in others, reports suggest that instead of notifying customers of limitations, accounts are simply being closed.
“The regulation specifically targets the practice of limiting,” stated an MGC representative in an email. “Account closures were not intended to be part of this regulation.”
“We will monitor the situation over the coming months, and if this behavior persists, I believe the commission will take notice,” Sigma Squirrel remarked. “I doubt that account closures were the desired outcome of a regulation aimed at promoting fairness for players.”
Unfair and Unsustainable Practices in Sportsbooks
While winning bettors face restrictions from sportsbooks, losing players are encouraged to wager more. This dynamic poses risks from a responsible gaming perspective and creates a precarious situation for operators.
Prediction markets are emerging as a viable alternative for bettors who contribute significantly to overall handle, while recreational gamblers are experiencing financial strain at an unsustainable rate.
DraftKings CEO Jason Robins has openly expressed that customers aiming to win are not the type of clientele the company seeks. This position is becoming increasingly precarious for operators, according to Sigma Squirrel.
“When we revisit this discussion in a year, and if overall handle has plateaued or declined while prediction markets continue to thrive, we will see where we stand,” he concluded.