New York Legislation Aims to Stop Sportsbooks from Limiting Winning Bettors
Several states, including Massachusetts and Wyoming, are examining the practice of limiting or banning successful bettors amid ongoing discussions about fairness and responsible betting practices in the sports betting industry. NewYork limiting bettors
In New York, legislative activity is underway that could significantly impact how sportsbooks manage winning players. In September, Assemblymember Alex Bores introduced the Fair Play Act, a bill aimed at preventing sportsbooks from restricting or banning customers solely based on their frequent winnings. The legislation stipulates that sportsbooks cannot impose limits or bans on bettors unless there are concerns related to responsible gambling or integrity issues. NewYork limiting bettors
The New York legislature is set to reconvene in January, and the bill has been assigned to the Assembly Racing and Wagering Committee. Should it pass, New York would become the first U.S. market to implement such a regulation. However, it is noteworthy that other states have already begun scrutinizing the practice of limiting bettors.
The Massachusetts Gaming Commission (MGC) has conducted extensive studies on this subject, including holding hearings with sportsbook operators. The agency emphasizes consumer protection as a primary concern. Last year, the MGC requested data from operators regarding limiting practices, and the findings were released last month.
Carrie Torrisi, head of the MGC’s Sports Wagering Division, explained, “Analysis confirmed that players who consistently beat the closing line are likely to have a lower stake factor, meaning have their limit lowered, and players who do not consistently beat the closing line are more likely to have a higher stake factor, meaning have their limit raised.” The data revealed that just over half a percent of bettors face limits, with the extent of restrictions varying among individuals. MGC Chair Jordan Maynard acknowledged that while the data supports some of the concerns raised by bettors last year, sportsbooks need to manage risk effectively. The commission expressed a desire for better notification to bettors regarding when and why their bets are limited but decided against immediate regulatory action.
Similarly, the Wyoming Gaming Commission also examined limiting practices this year. Their findings indicated that fewer than 1% of accounts are limited, and less than 10% of these cases involved exploiting sportsbook errors. A report concluded, “Given all the data we’ve collected, staff does not see a problem in Wyoming with the limiting of sports wagering.”
In New York, sportsbooks are expected to oppose any legislative measures that could threaten their profitability. During the legalization process, sportsbooks successfully opposed a proposed 51% tax rate, highlighting their resistance to regulatory changes that could impact margins.
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Executives from DraftKings and Penn Entertainment have expressed concerns over restrictions on limiting customers, noting that such practices are integral to their risk management strategies. DraftKings stated in its fiscal year 2023 report that, “It is customary for sports betting operators to manage customer betting limits at the individual level to manage enterprise risk levels. We believe this practice is beneficial overall, because if it were not possible, betting options would be restricted globally and limits available to customers would be much lower to insulate overall risk due to the existence of a small segment of highly sophisticated syndicates and algorithmic bettors, or bettors looking to take advantage of errors and omissions on our platforms.”
Since its launch in 2019, the New York sports betting market has seen over $74.9 billion in wagers, with a surge following the mobile platform rollout in January 2022. The industry has generated more than $3.4 billion in tax revenue and $6.7 billion in operator revenue, underscoring the significant economic footprint of the sector.
