Ahead of March Madness, Blumenthal Demands Sports Betting Companies Stop Targeting Problem Gamblers

[HARTFORD, CT] – This week, U.S. Senator Richard Blumenthal (D-CT) wrote eight major sports betting companies to demand they stop leveraging data to target problem gamblers with promotions and ads. Blumenthal’s call to action comes at the start of March Madness and urges companies to make it easier for problem gamblers to remove themselves from online gaming platforms as the tournaments begin in the coming days.  

“Sports betting companies are exploiting, targeting, and taking advantage of vulnerable problem gamblers, especially during these coming weeks. How? They are enticing those problem gamblers to do more. They are enticing problem gamblers by targeting them based on the data they collect in real time about who is betting how much and where, and they are collecting that data and then targeting the most vulnerable problem gamblers to do more, leading them down dark paths to addiction. And the reason very simply is that they want to make more money,” said Blumenthal on Monday at an event at the Wheeler Clinic Family Health & Wellness Center in Hartford, Connecticut. On Monday, Blumenthal also visited the Connecticut Renaissance’s Gambling Treatment Program’s open house in Norwalk – which offers individual, couples, family and group treatment for anyone affected by problem gambling – and the No Kiddin’ Social Sober Club, a sober social club founded by Bobbie Malatesta.

In January, Blumenthal introduced the Gambling Addiction Recovery, Investment, and Treatment (GRIT) Act, which sets aside federal funds to help prevent, treat, and study gambling addiction in the United States.

“Every other form of addiction—drugs, alcohol, tobacco—involve federal funding. But none for gambling addiction, and that is wrong,” continued Blumenthal at Monday’s event in Hartford. “And that is why the measure I have proposed, the GRIT Act, would devote about half of the revenue from the federal excise tax on gambling. It's a quarter of one percent, but it would produce millions of dollars for treatment, research, and other measures to help people who are addicted.”

Video of the Blumenthal’s remarks in Hartford can be found here. The text of Blumenthal’s letter to FanDuel is available below. Identical letters were also sent to Draft Kings, MGMBet, ESPNBet, Fanatics, Caesars, BetFred, and Bet365.

Dear Ms. Howe,

As the 2024 March Madness tournaments kick off, more and more Americans will place wagers. Last year, the American Gaming Association estimated a record 68 million Americans wagered on March Madness.[1] That number is expected to increase as gambling becomes more accessible. I am deeply concerned about gambling operators using data to engage in aggressive marketing practices that entice gamblers who spend the most to keep spending, undoubtedly fueling problem gambling. Instead of using this data to identify and proactively offer help, such as self-exclusion and treatment services, gambling operators have prioritized profits over people.

I urge you to leverage the data you collect to identify problem gamblers and proactively provide these individuals with services, such as a confidential advisor, to help them access treatment. You should also quickly and frequently direct potential problem gamblers to transparent and easily accessible information on self-exclusion so they can remove themselves from your platform. Further, I demand you end any promotions or marketing practices that encourage “high-value” gamblers to continue spending money through exploitative bonuses, credits, and enticements. Instead, you should divert the resources spent on these problematic practices to programs dedicated to treating individuals with gambling addiction.

            Rather than leveraging data collected on users to identify those who may be gambling beyond their means, and then intervening to help, gambling companies instead use this data to entice frequent gamblers – including problem gamblers – to continue placing bets. A common practice engaged in by major sports betting websites assigns VIP Hosts to frequent bettors. These are customer representatives whose job it is to provide those high-value bettors with promotions and credits to entice them to continue gambling, often at their own financial peril.

            VIP Hosts have access to real-time data of a customer’s betting activity, and they can monitor when the customer used the app, how frequently they’ve been betting, and whether they are winning or losing money.[2] The strategy for VIP Hosts is to get their most-valued gamblers to continue gambling – even providing them with payment options that give gamblers access to funds they wouldn’t otherwise be able to cover. Unsurprisingly, the most valued gamblers are those who lose money most frequently – and those most at risk to become addicted to gambling.

            A recent Wall Street Journal investigation profiled a psychiatrist who fell victim to one of these exploitative programs.[3] As she spent more and more, recognizing that she was becoming addicted, she received dozens of texts and emails from a customer representative enticing her to keep spending. She continually received ten of thousands of dollars in credits, keeping her in the game long after she wanted to stop. She attempted to self-exclude from several platforms to prevent further financial losses but was unable. Finally, six figures in debt, she was able to successfully self-exclude and seek help.

It is clear that these marketing practices are abusive and cannot exist alongside an alleged desire to promote responsible gambling. Therefore, you must end any marketing practice that uses hosts, promotions, credits, and other enticements encouraging gamblers to bet beyond their means and instead use the data you collect and monitor to proactively identify potential problem gamblers and meaningfully engage with them on available resources – such as self-exclusion funds – and treatment options. Further, funds spent on these exploitative marketing practices should be directed towards treatment services.

Finally, when one of your users recognizes that they are gambling beyond their means, you have an obligation to make it as easy as possible for them to self-exclude from your platform. The option to self-exclude cannot be buried in the depths of your app or website. It must be front and center, simple to navigate, and proactively provided to individuals who are potential problem gamblers.

            Betting is known to be a highly addictive activity, and cognitive distortion can often take place within people who have lost large amounts of money due to gambling. This leads to a dangerous habit of “chasing losses,” or trying to recoup money lost by placing more bets. As a gambling company, you have a responsibility to your users to be transparent about how addictive betting can be, and to use every tool at your disposal to identify and assist those who are gambling beyond their means.

            Given the seriousness of the matter, I request a written response to the following questions by April 8, 2024:

1. What is the process on your site or application for a player to self-exclude?
2. How many times must a player click starting at your homepage to access a page where they may self-exclude?
3. Do you proactively provide information on self-exclusion to users?
4. How does your company ensure that it applies the same standards for self-exclusion across all states in which your platform operates, and how do you define those standards compared to your competitors and other market practices?
5. Please explain what data you collect on players and how you utilize that data.
6. Does your software identify high-risk players or others who may be at risk for problem gambling? If so, do you prompt those players to self-exclude or offer other assistance?
7. If you do use data to identify to high-risk players, what do you do to provide those players with assistance? Do you provide dedicated staff to help them navigate the process of getting help or treatment? Will you commit to doing so?
8. Last year, New Jersey began requiring mobile betting operators in the state to utilize certain player data to intervene and to offer the player assistance if the player engages in specific, potentially troublesome, behaviors. Has your company complied with this mandate? Have you expanded this practice to any other state, specifically where it is not required by law? If not, why not?
9. Have you ever proactively shut down an account of a high-risk player? If so, what percentage of accounts have you shut down for high-risk behavior?
10. Does your company offer a “VIP host” or customer representative program designed to get frequent bettors to continue to bet? If so, will you commit to ending this practice?
11. Does your company share self-exclusion requests with other properties, affiliates, third-parties, joint operators, and related firms? If so, how does your company accomplish this?
12. What percentage of players request to be self-excluded? Of that number, how many of those requests have you honored? If all players who have requested self-exclusion have not had their request honored, please explain why.
13. Once a player’s self-exclusion period has expired, do you proactively contact them, via email or other means, to market your product to them? Does this practice vary by state? If so, why?
14. Given that 38 states and Washington, DC now have legalized sports betting, and others have additional forms of gambling such as casinos or state lotteries, would your company support a national self-exclusion registry that allows players to self-exclude in one state and choose to have it apply nationally?
15. How much does your company direct towards treatment services for problem gambling or other problem gambling help services? Will you commit to increasing that amount as gambling grows in popularity?

Sincerely,

____

[1]              American Gaming Association, ”68 Million Americans to Wager on March Madness,” press release, March 12, 2023, https://www.americangaming.org/new/68-million-americans-to-wager-on-march-madness/

2           Katherine Sayre, “A Psychiatrist Tried to Quit Gambling. Betting Apps Kept Her Hooked.” The Wall Street Journal (New York, New York), February 18, 2024, https://www.wsj.com/business/hospitality/gambling-addiction-sports-betting-apps-4463cde0

3           Ibid

-30-