Is the Debate on Limiting Bettors by Operators a Storm in a Teacup?

What’s New on Limits?

Last summer, the Massachusetts Gaming Commission (MGC) set out to untangle the Gordian knot of player limiting by sports betting operators. But problems arose right from the start.

Prompted by complaints pouring in from across the state, the MGC organized a roundtable with operators to share their perspectives. Operators weren’t thrilled about the idea, especially since the roundtable was to be public, and discussing the issue meant delving into broader company policies.

The result was the infamous “roundtable,” where no representatives from any operators active in the state showed up. The sole exception was Bally’s Bet, which wasn’t even operating in Massachusetts at the time. The first attempt at discussing limits went about as well as the CFTC’s roundtable on prediction markets.

The second attempt fared better. At a rescheduled meeting, representatives from all operators attended, and while no groundbreaking changes have emerged to date, they offered some intriguing insights into limits. Here are a few (with the source companies in parentheses):

• Limits affect less than 1% of players (BetMGM).
• Limits apply to less than 0.05% of bets (FanDuel).
• 90% of winning bettors are not limited (Fanatics).

In a relatively unified voice, operators stated that limits don’t target winning players but those who win by deliberately exploiting operator errors and limitations. These include:

• Exploiting odds errors
• Arbitrage betting
• Promotion abuse
• Betting large sums on niche markets
• Syndicate betting
• Courtsiding

Let’s linger on that last one. Courtsiding – watching a match live from the stands and betting on in-game events that have already occurred before the operator can take the market or adjust odds. On one hand, it’s clearly exploiting a loophole. On the other, it raises a kinda provocative question: if operators lack the technical ability to react quickly enough in certain cases, should those markets even be offered?

The Massachusetts roundtable showed we’re dealing with a situation where, realistically, a satisfying resolution is hard to find. On the other hand, it’s no surprise that operators, as the dominant party in the player relationship, are under scrutiny.

“There was a misunderstanding, or misrepresentation of what I said during our Commission meeting related to the patron limiting in Wyoming. Wyoming patrons are not being limited for cheating. I used that as one example of a reason that Operators use for limiting a patron. There are many different reasons Operators limit patrons cheating (court-siding, syndicate betting, etc.), bonus abuse, targeting weaker markets, and others. I won’t go into all of them here and I didn’t want to get into all of them in the meeting so I merely used “cheating” as an example, not to illustrate why Wyoming patrons were being limited.”

Post-roundtable, the MGC announced it would request further clarification from operators. Months have passed, and there’s been no visible progress. We reached out to the MGC directly but have yet to receive a response.

It feels a bit like the Commission realized this topic could be debated for a decade without reaching a sensible solution.

Why Do Operators Limit?

From the operators’ perspective, or at least how they present it, limits make a lot of sense. They’re a safety valve to maintain financial liquidity. Completely abandoning limits, even in the cases listed above, would erode operators’ financial stability. Publicly available data shows that, depending on the month, 7-12% of all player wagers stay with the betting company. We’re certainly not talking about operating on astronomical margins.

To put it bluntly: if operators allowed players to get too clever and exploit technological flaws, they’d have to cut costs elsewhere to keep operating.

According to operators, this would lead to:

• A reduced betting offer
• Lower odds for all players
• Pushing players to the black market

From a business perspective, it’s hard to argue with their reasoning.

“Keeping players on-site while optimizing profitability should be the main objective for all operators and requires an expert team and tools, which Altenar proudly provides to ~150 operators across the globe,” says Matthew Ferrara, Altenar’s Sales Manager for North America.

The problem arises because players don’t think from a business perspective. They don’t have to, and in theory, they shouldn’t care.

Why Do Players Feel Wronged?

Let’s venture a bold claim: the complaints cited by the Massachusetts Gaming Commission likely didn’t come from casual bettors but from those who take sports betting more seriously. The average bettor may not even know where to turn when they feel wronged by an operator.

We’re likely dealing with a group of players who understand the mechanics of sports betting and know how to leverage them to their advantage. They may have partly cracked the game, aware that the ultimate goal is to outsmart the bookmaker, be wiser, and… savvier than them.

The strategy of outwitting the bookmaker at all costs isn’t illogical from a player’s perspective. After all, you should seize every advantage you can get. But this is where limits come in, potentially derailing players’ ambitious plans.

The biggest issue is that players… have every right to feel wronged. They won, outsmarted the bookmaker, and achieved their goal. From their perspective, it looks like this: if I lose, everything’s fine, but if I start winning, the bookmaker pulls every trick to curb my opportunities.

Ultimately, it boils down to the asymmetrical player-operator relationship. The operator draws the line on what’s allowed and what isn’t. They set the rules (in line with regulator guidelines), and the player can either agree or walk away. By placing bets, players implicitly or explicitly consent to those rules.

What Can a Limited Player Do?

The goal of this article isn’t to blindly defend operators or accuse players of being overly cunning. Players have rights throughout their journey with an operator that should be respected. What can a player do if they believe they played by the rules but were hit with a stake limit?

The first step should be contacting the operator to ask why a limit was imposed on a specific bet. In an ideal world, the response would be clear enough to resolve doubts. But here’s another pebble to toss into the operators’ garden: transparency around these decisions and their reasons often falls short.

This is a common complaint from players and regulators, and there’s little room for interpretation. Operators typically don’t inform players about limits or their reasons. Players only discover them when trying to place a bet. This minimizes negative reactions, as many players don’t even realize they can’t wager larger amounts on certain bets, and it doesn’t affect them.

Greater transparency would help clear up doubts but could also spark backlash from a wider group of players. This is another tricky situation where the interests of both sides clash, making reconciliation a tough task. Transparency would only be a small part of addressing the contentious issue of limits, far from the core of the problem.

Players who feel unfairly treated can follow the example of those in Massachusetts and file complaints with the regulator. As a last resort, legal action is an option, though we haven’t heard of such cases related to limits so far.

What Should Operators Do?

As mentioned, setting the rules largely falls to operators. They draw the line between what’s allowed and what isn’t. It’s impractical to detail every scenario in the terms and conditions, so interpretation comes into play.

Consistency in interpreting and enforcing those terms seems key. Clear rules and uniform handling of disputes build credibility, despite occasional player frustration.

Another critical aspect is maintaining active dialogue with regulators to prevent misunderstandings from escalating into negative outcomes. It feels like this was mishandled in Massachusetts, where operators initially responded to mounting player complaints by skipping the roundtable. That’s hardly the best way to engage with a regulator.

The Wyoming Gaming Commission assures us of ongoing operator engagement.

“The Director and myself have met with all the Operators during and after receiving the data to discuss the limitations. We have had, and will continue to have positive dialogue with all the operators as this process continues,” confirmed Michael Steinberg.

“We will continue to request ongoing data from the Operators related to limiting Wyoming patrons so we can monitor the situation. This will help us understand if any further initiatives or regulations are needed to address any concern,” he added.

Regulators should know how players eligible for limits are identified, what tools are used, and what factors drive these decisions. We’ve heard a bit more about this already.

Finally, operators should aim to minimize errors, though avoiding them entirely is likely impossible. Operators work with limited information to make accurate decisions. Fostering a sense of unfairness in players isn’t in their interest. It tarnishes their reputation and the industry’s credibility. We don’t want to reach a point where players see little difference between legal and offshore operators.

“Over-limiting bettors or being too strict will only push bettors away from their sportsbook and potentially to the black market. Which is why risk management is so important for a successful B2C operation,” says Matthew Ferrara.

Sometimes, it’s better for operators to pay out a larger win in ambiguous cases than to get embroiled in public disputes with players and regulators. The presence of sharp bettors can even be helpful.

“Sharp bettors help sportsbooks refine odds and deliver the most accurate price which in turn, attracts recreational bettors who then drive most of the revenue,” Ferrara notes.

What Should Regulators Do?

What’s in the regulators’ hands? Primarily, fulfilling their role of monitoring and auditing various aspects of operator activities, not just limits. The Wyoming Gaming Commission is doing a solid job here.

“We are going to continue to monitor the limitations of Wyoming patrons periodically, looking for any changes in the number of patrons being limited, limitation levels, and the reasons for their limitations. The data we received recently was an initial look and base-line from which to compare future data from the Operators. We also have a complaint system we monitor and will look into any complaint we may receive from a patron,” Michael Steinberg told US iGaming Hub.

Fortunately, operators are often responsible in this regard, proactively reporting errors that led to unfair player treatment.

Top-down regulations on limits, however, aren’t a particularly sensible solution. With operators facing competition from offshore platforms, prediction markets, sweepstakes, and rising taxes, additional external restrictions wouldn’t benefit the market.

Ultimately, to operate and offer top-quality products, companies need financial liquidity. Regulations that would likely lead to financial losses for operators would force them to cut costs elsewhere, offering less favorable odds or less appealing products. This would further drain resources from the legal industry to offshore markets.

“I think this should be left to the operators, as a well-run risk management team is as competitive advantage as an operator. The difference between a good sportsbook and a great one lies in risk management, and state-imposed regulations will punish operators who’ve invested in robust risk management while rewarding those who cut corners,” says Matthew Ferrara from Altenar.

Organizing discussions, roundtables, and monitoring the situation is absolutely appropriate and advisable. Overzealous intervention, however, would tilt the scales toward the black market.

In summary, is there a single optimal solution for limits that would satisfy everyone? Honestly, it’s hard to imagine one. It’s easy to get stuck in an endless tug-of-war that leads nowhere productive. Efforts to clarify the issue and gather more data, like those by the MGC or Wyoming Gaming Commission, are commendable, but trying to resolve this definitively in one direction or another might, unfortunately, prove ineffective.