Massachusetts Gaming Commission to Continue Probe into Sports Betting Limits

A Data-Driven Approach

After an initially rocky start to its inquiry, the MGC has taken a methodical, data-driven approach. In April 2024, the commission required all licensed sportsbooks in the state (with the exception of Bally Bet) to submit detailed data on their account-limiting practices.

Faced with a “deluge of data,” the commission unanimously voted to hire a data analyst to sift through the information. The goal is to identify patterns and potential areas for regulatory action. Specifically, the MGC is looking at:

• The total number of customers currently facing limits.
• The percentage of the total player base that is limited.
• The number of winning players who are limited.
• The number of players treated as VIPs who exhibit losing behaviors.

The findings from this analysis will be used to formulate specific questions for operators about their customer limitation policies and their VIP programs. “I’m proud of the fact that we’re the first jurisdiction in the United States to openly discuss limiting with the operators and tying it to VIP,” stated MGC Chair Jordan Maynard.

It remains unclear whether the September meeting will be a progress update or if the data analysis will be complete, allowing the commission to present its findings.

The Operators’ Defense

The MGC’s investigation began after two roundtable discussions with licensed operators. While operators were initially hesitant to publicly discuss their internal risk management policies, they eventually participated in a rescheduled meeting.

During that discussion, sportsbooks presented a unified defense. They argued that limits are not used to target players who are simply successful, but rather to stop a very small fraction of users who exploit the system. Operators stated that limits are applied to customers engaged in activities such as:

• Betting on obvious pricing errors.
• Arbitrage betting (betting on all outcomes of an event across different sportsbooks to guarantee a profit).
• Abusing promotional offers.
• Placing large bets on niche, low-liquid markets.
• “Courtsiding,” or placing bets on events that have already occurred before the operator’s data feed has updated.

Fanatics claimed that 90% of its winning players are not limited. BetMGM stated that limits affect less than 1% of its players, and FanDuel reported that less than 0.05% of all wagers are subject to limits.

Operators contend that these limits are a necessary “safety valve” to maintain their financial stability and to safely offer a wide variety of betting markets to the general, more casual player base. They warn that eliminating their ability to manage risk could force them to reduce their betting offerings, offer less competitive odds, and inadvertently push sophisticated bettors toward the unregulated black market.

A Complex Regulatory Challenge

The issue highlights a fundamental tension in the sports betting industry. From the players’ perspective, being limited after winning feels unfair. They see it as a one-sided arrangement where operators are happy to take their losing bets but are quick to restrict them as soon as they demonstrate skill.

Regulators like the MGC and the Wyoming Gaming Commission are caught in the middle. They are tasked with ensuring a fair and transparent market for consumers while also allowing legal operators to run a viable business.

While the MGC’s proactive approach is notable, finding a solution that satisfies all parties is a difficult task. Some industry observers believe that heavy-handed, top-down regulations on betting limits could do more harm than good by damaging the legal market. The MGC’s current focus on data collection and dialogue represents an attempt to find a middle ground, but the path to a clear resolution remains uncertain.