Sports Betting States Fall Short with Consumer Protections
Author:
Zach
Published:
Sep 24, 2024
,
11:53 a.m.
ET
As sports betting continues to expand across the U.S., many states are falling short when it comes to recommended consumer protection standards. A recent report commissioned by the National Council on Problem Gambling (NCPG) evaluated how well states’ online sports betting regulations align with their recommendations for responsible gambling and consumer protection, and the results were mixed. While some states have taken strong steps, many lag behind in meeting the recommended measures, potentially leaving bettors vulnerable to gambling-related harms.
What Consumer Protection Measures Are Expected from States?
The NCPG’s Internet Responsible Gambling Standards (IRGS), established in 2012 and continuously updated, set out specific recommendations for states regulating online sports betting. These recommendations address several critical areas:
Policy & Governance
States are expected to create clear and enforceable regulations governing online sports betting operators. These policies should prioritize player protection, focusing on minimizing harm and ensuring responsible gambling practices. States that meet this standard have established robust frameworks to guide operators in promoting safe gambling.
Staff Training
Responsible gambling doesn’t just stop with rules and regulations – staff at betting operators need to be trained to identify and assist individuals at risk of problem gambling. This includes knowing the signs of gambling addiction, providing resources to help players and guiding them toward self-exclusion programs if necessary.
Informed Decision-Making by Players
One of the most important aspects of responsible gambling is ensuring that players can make informed decisions. This includes providing tools to set limits on betting time, budgets and self-exclusion options, all aimed at helping bettors control their behavior. States that lack clear requirements for operators to offer these tools are missing a key aspect of consumer protection.
Advertising and Promotion
Advertisements for sports betting can often be misleading, especially when they target vulnerable populations or promote bonuses that encourage risky behavior. States are expected to enforce strict guidelines for marketing, ensuring that ads are not deceptive and that they promote responsible gambling. The recent push for federal oversight, like the SAFE Bet Act, is in part a response to concerns over lax advertising regulations at the state level. Multiple sportsbooks have even been fined for misleading promotions of “free bets” and “risk-free” wagers, when actually they were bonus bets as initially non-withdrawable site credit.
Self-Exclusion Programs
Self-exclusion allows players to voluntarily ban themselves from gambling sites for a set period. It’s a crucial tool for those struggling with problem gambling. However, the effectiveness of these programs depends on how well they’re implemented and enforced. Some states have developed strong self-exclusion programs, while others offer only limited protections, or worse, no options at all.
Game and Site Features
Sports betting platforms should include features that promote responsible gambling. For example, warning messages should alert players when they’ve been gambling for a prolonged period or are betting beyond their preset limits. These features help mitigate the risk of compulsive gambling behaviors. States that fail to mandate these features leave players exposed to greater risk.
Research and Data Collection
Continuous research is necessary to evaluate the effectiveness of consumer protection measures and adjust them accordingly. States that fund or support research into problem gambling are better equipped to understand the issue and improve their regulations over time.
Important Caveats from the Study
While many states have taken steps to regulate online sports betting responsibly, the NCPG report found significant gaps in the implementation of these standards.
10 states, along with Washington D.C., met 40 or more of the 82 IRGS standards, including Colorado, New York, and Virginia.
9 states, including Arizona, Michigan, and Ohio, met between 25 and 39 standards.
11 states, such as Florida, Nevada, and West Virginia, fell short of even 24 standards.
Notably, states with older, more established sports betting markets, like New Jersey and Connecticut, performed better in adhering to the IRGS recommendations. These states had stronger self-exclusion programs, required annual staff training on responsible gambling and strictly regulated marketing efforts. In contrast, newer markets and states with fewer regulations left critical gaps, particularly in staff training and player support.
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State vs. Federal Oversight: A Crucial Debate
As highlighted by the ongoing push for federal legislation, including the SAFE Bet Act, the debate over state versus federal oversight continues to intensify. Proponents of federal regulation argue that national standards are essential to protect consumers uniformly across state lines, particularly as mobile sports betting allows for easier access and greater risks. Federal measures would also address inconsistencies in advertising practices and self-exclusion programs, where some states are far more stringent than others.
On the other side, states argue that they are best positioned to regulate sports betting, given their understanding of local markets and needs. State regulators contend that federal oversight would impose unnecessary restrictions and bureaucracy, stifling the growth of a thriving industry.
Conclusion: Gaps in Consumer Protection Need to Be Closed
The NCPG’s report makes it clear that while many states have made significant strides in regulating online sports betting, there is still much work to be done. The disparity between states that meet the majority of IRGS standards and those that don’t highlights the need for stronger consumer protections across the board. Whether through state-led reforms or federal intervention, there is a growing consensus that more needs to be done to protect vulnerable players.
As the SAFE Bet Act moves (slowly) through Congress, the future of sports betting regulation could shift toward some level of federal oversight, potentially setting new standards for responsible gambling nationwide. However in the meantime, state legislators and regulators must take immediate steps to close the gaps in consumer protection, ensuring that the rapidly growing sports betting industry prioritizes the well-being of its players.
