The Massachusetts Gaming Commission is reviewing regulations concerning VIP programs implemented by online sports betting platforms, following apprehensions that these schemes may primarily attract frequent losing bettors.
VIP or loyalty initiatives, employed by prominent operators like DraftKings and FanDuel, offer various rewards such as vacations, sports event tickets, and betting credits. Critics claim that these programs might incentivize vulnerable gamblers to increase their betting activities.
“VIP programs ought to be intended for individuals who can genuinely afford such luxuries, and they shouldn’t exploit vulnerable players,” stated Chair Jordan Maynard during the commission’s meeting on October 9, according to a report from WBUR.
A recent study by the commission highlighted that some online sportsbooks in Massachusetts have occasionally limited access to customers with consistent winnings, while often bestowing VIP status and associated rewards on those who experience frequent losses.
Research Director Mark Vander Linden remarked at the recent meeting that available research connecting VIP programs with gambling-related harm is sparse but alarming. International studies indicate that VIP clientele are at a greater risk of facing gambling issues. Vander Linden contended that loyalty programs can counteract the efforts of individuals attempting to curb their gambling habits or quit altogether.
Proposed regulations include establishing a minimum age of 25 for VIP involvement, which exceeds the state’s legal betting age of 21. Additionally, the commission is contemplating mandating affordability assessments prior to awarding VIP status, similar to existing frameworks in the UK. Furthermore, regulators are contemplating the removal of incentives that could promote high-risk gambling behavior.
While loyalty programs have long been a feature of traditional casinos, online VIP schemes frequently involve “hosts” who reach out directly to VIP clients through texts and emails, according to reports.
Numerous lawsuits have claimed that these programs have contributed to gambling addiction and financial strain, with some hosts reportedly contacting troubled bettors on a daily basis. Two notable cases involving DraftKings reached settlement earlier this year, though specific details remain undisclosed.
On a national level, some industry advocates argue that VIP programs do not promote excessive gambling and assert that hosts undergo training to detect problematic behavior, likening these programs to standard customer loyalty initiatives found in various industries.
Commissioner Eileen O’Brien expressed her concerns regarding host compensation, emphasizing that pay based on betting frequency may encourage risky gambling actions.
The commission intends to gather additional data from sports betting organizations as part of its ongoing evaluation of VIP programs.