Sportsbook VIP Programs facing scrutiny, lawsuits

Key Points

• Lawsuits and regulatory scrutiny are raising concerns about whether sportsbook VIP programs may be fueling at-risk betting behaviors and addiction

• DraftKings and FanDuel face lawsuits alleging that their VIP programs exploit problem gamblers, with claims of aggressive tactics.

• Some lawmakers and advocacy groups argue that current responsible gambling measures are insufficient, calling for stronger protections and oversight.

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Problem gambling advocates have long questioned whether sportsbooks’ player-engagement practices are ethical. Today, lawmakers on Capitol Hill are taking a closer look at the industry’s methods, especially when it comes to VIP programs and their role in encouraging high-frequency bettors to wager more.

VIP programs unlock access to exclusive, high-value benefits for big-spending bettors, and are now facing legal and regulatory scrutiny. Lawsuits and comments from legislators are raising questions about whether these programs can exacerbate potentially addictive behaviors. Leading operators such as DraftKings and FanDuel are at the center of these controversies, with allegations that their VIP incentives encourage unhealthy gambling.

What are gambling and sports betting VIP programs?

VIP programs in the gambling industry are like loyalty programs in other sectors, rewarding top-spending customers with perks such as betting credits, promotional bonuses, gifts, tickets to big events like the Super Bowl or even all-expenses-paid trips. However, unlike typical rewards programs, sportsbook VIP initiatives specifically cater to frequent bettors, often assigning them personal account managers known as VIP hosts or associates.

These hosts maintain direct contact with high-value bettors, offering incentives that encourage continued engagement. While sportsbooks argue that VIP programs are designed to enhance the player experience, critics argue that they can incentivize problematic gambling behaviors.

Common features of sportsbook VIP programs include bonuses and promotions, dedicated VIP hosts, luxury perks, increased betting limits and rebates for continued play. They can also feature tailored betting bonuses and enhanced odds, rewards for maintaining constant communication with the VIP host, invitations to sporting events, complimentary vacations and high-end merchandise, and programs that compensate for losses. The concept is not new, as casinos have deployed similar tactics for decades to compel big-betting “whales” to gamble at their locations through significant incentivization, including credit lines for betting that can be in the hundreds of thousands or millions of dollars.

Why are sportsbooks being sued for their VIP programs?

DraftKings Lawsuits

DraftKings, one of the leading online sportsbooks in the U.S., has faced multiple lawsuits around its VIP program. A heart-wrenching case comes from Lisa D’Alessandro, who learned through a letter written by her husband that he had a debilitating gambling addiction and had lost all his money on DraftKings. Lisa and her husband had just had an offer accepted on a new home in New Jersey. 

D’Alessandro rushed to the bank, where she found their accounts – including funds from her 2021 home sale and money gifted to their children – drained and overdrafted. The next day, D’Alessandro filed for divorce. Her husband never returned to their home. In December, she filed a lawsuit against DraftKings and its New Jersey casino partners, accusing the company of “actively” fueling her husband’s addiction by targeting him with incentives, bonuses and gifts designed to deepen his compulsion.

The complaint alleges that between January 2020 and January 2024, her husband deposited and lost nearly $1 million, much of it belonging to his wife and children. In 2022, he deposited 300% of his annual salary into his DraftKings account. By 2023, that figure had risen to 440%.

DraftKings had designated him a VIP player, granting him access to a personal host who encouraged him to keep gambling. The lawsuit claims that despite training employees to identify problem gambling behaviors, DraftKings ignored clear red flags in his betting patterns.

The allegations against DraftKings mirror broader concerns about VIP programs across the industry. Some lawsuits allege that VIP hosts have contacted bettors over 100 times per day, urging them to place additional bets despite clear signs of distress. 

In some cases, VIP associates’ compensation has been tied directly to their ability to get bettors to wager, so they are monetarily incentivized to focus on their betting frequency, not the potential impact it’s having on their mental or financial wellbeing. 

FanDuel’s Legal Challenge

FanDuel, owned by Flutter Entertainment, is also embroiled in legal troubles. A lawsuit filed in early 2025 accuses the company of fostering gambling addiction through its VIP program. Former Jacksonville Jaguars finance manager Amit Patel alleges that FanDuel and Flutter “actively and intentionally targeted and preyed” on him, leading him to gamble over $20 million in four years.

Patel embezzled millions from the Jaguars’ virtual credit card to fund daily fantasy sports (DFS) entries on FanDuel and purchase luxury items, including a putter used by Tiger Woods that sold for $47,113. He claims FanDuel knowingly exploited his addiction through its VIP program, offering enticements such as gifts and trips to major events. Patel is seeking $250 million in damages, arguing that FanDuel violated the Florida Deceptive and Unfair Trade Practices Act.

In response, Flutter and FanDuel have filed a motion to dismiss the case, asserting that Patel’s claims are baseless and that they had no legal obligation to prevent his gambling. They also argue that Patel’s guilty plea to wire fraud undermines his ability to shift responsibility onto the company. Furthermore, Flutter maintains that its VIP services are no different from other common loyalty programs in entertainment industries.

BetMGM also sued

At the heart of another legal battle is Sam Antar, a self-identified compulsive gambler, and BetMGM, one of the nation's leading casino operators. Antar accuses BetMGM of exploiting his gambling addiction by encouraging him to wager tens of millions of dollars over a brief period. His case, dismissed in early 2024 by a U.S. District Court judge, has reignited questions about the responsibilities of casinos and sportsbooks to prevent gambling addicts from betting in the digital age.

Antar has alleged that BetMGM knowingly encouraged his gambling addiction through targeted marketing tactics, including five-figure casino bonuses. According to court filings, Antar risked nearly $30 million over nine months in 2019 and 2020. He claims these behaviors were exacerbated by BetMGM's analytics-driven marketing, which preyed on his compulsive tendencies.

Antar has also argued that the New Jersey Consumer Fraud Act should protect individuals like him from "unconscionable" practices. However, U.S. District Judge Madeline Cox Arleo dismissed his case in January 2024, citing the superiority of the Casino Control Act, which governs gambling operations in New Jersey. Judge Arleo's decision emphasized that current state laws impose no legal duty on casinos to prevent compulsive gamblers from betting.

Antar’s attorney, Matthew Litt, contends that the Casino Control Act, written for a pre-digital era, is outdated. He argues that online casinos now wield advanced technologies capable of identifying and targeting problem gamblers, necessitating regulatory updates.

Legal Precedent

It’s worth noting that legal precedent in these types of cases is typically not on the side of the bettor. In 2008, a U.S. District Judge ruled against Arelia Taveras, a compulsive gambler who sued Atlantic City casinos, claiming they had a duty to stop her from losing nearly $1 million over two years. 

Similar cases in Indiana and abroad in Sweden have echoed these rulings, asserting that casinos are not legally obligated to shield individuals from their own compulsive gambling behaviors.

Courts have generally taken the view that gambling is a consensual activity. Bettors engage in wagering with full knowledge of the risks, and casinos profit from the entertainment they provide. Legal arguments hinge on whether operators cross a line by exploiting vulnerable individuals, but so far the legal system has largely sided with the industry.

Are VIP associates turning a blind eye to problem gambling?

Industry experts and problem gambling advocates argue that VIP hosts operate with financial incentives that conflict with responsible gambling principles. These hosts are often rewarded for player engagement and betting volume, creating concerns that they are incentivized to encourage problem gamblers to continue wagering despite significant losses.

Cait Huble of the National Council on Problem Gambling expressed concerns about the structure of VIP programs, stating, “VIP hosts appear financially motivated to keep high-value players engaged, which creates a conflict with responsible gambling practices.” 

Reports also suggest that VIP hosts sometimes facilitate lines of credit or encourage high-risk wagers, further deepening financial losses and increasing the potential for addiction.

What do sportsbooks do now to combat Problem Gambling?

In response to mounting criticism, sportsbooks have implemented responsible gambling (RG) measures aimed at mitigating problem gambling behaviors. 

One measure is a self-exclusion program, where players can voluntarily ban themselves from betting platforms. Many sportsbooks also offer deposit and wagering limits, although it's up to the user to set restrictions, leaving them to be ignored by most users. Some have also introduced reports that clearly show how much a bettor has wagered and won/lost over certain periods of time. In Australia, there is proposed legislation to make these data points more prominent and ever-present by having a mandatory display of monthly, annual and lifetime results (which are usually losses) on screen at all times. 

Sportsbooks have begun introducing AI and behavioral monitoring to detect problematic gambling patterns, but some have posited that VIP-level bettors may receive exceptions. Lastly, sportsbooks assert that they provide robust responsible gambling training for VIP hosts, but when they are financially incentivized to encourage more betting, perhaps learnings from that training is disregarded or at minimum deprioritized. 

In essence, these initiatives offer evidence that gambling operators are making efforts to combat the issue, but may fall short of effective intervention, in particular with high-value VIP players. Some lawmakers and advocacy groups are now arguing that regulatory intervention is necessary to ensure sportsbooks prioritize the wellbeing of bettors over their own profits.

Specialized treatment for gambling addiction 

As scrutiny around sportsbook VIP programs increases, specifically with a focus on gambling addiction prevention measures, experts have also emphasized the importance of increasing awareness of and direct access to specialized gambling addiction support options when issues inevitably arise. Traditional methods, such as helplines and self-exclusion programs, may not be sufficient for bettors who develop serious gambling problems.

For individuals struggling with gambling addiction, help from a specialized treatment provider like Birches Health can be essential. Birches is dedicated to providing convenient virtual care for individuals affected by problem gambling. Their evidence-based approach includes custom treatment plans with certified gambling counselors nationwide. Care is covered by insurance for most clients, as Birches has partnered with all major providers to help keep out-of-pocket costs low (or $0) for all individuals in need. 

Here are some different options for connecting with Birches Health:

• Book an appointment 

• Call 833-483-3838

• Email help@bircheshealth.com