Getty Images / illustration by Liz Spangler
The modern, tricked-out sportsbook apps that now live on the mobile screens of more than 20 million U.S. adults not only allow for a dizzying array of bets, but come equipped with a level-headed menu of controls meant to keep recreation from spiraling into addiction.
Users can set limits on how much money they can deposit into their betting accounts in a day, week or month; how much they can wager over those spans; how large a wager they can place; and how long they can spend on the app before being locked out.
In a nod to free choice, sportsbooks allow them to change those self-imposed limits, but will institute those changes only after 24 hours — or in the case of FanDuel, 72 hours — a safeguard meant to keep overly hopeful, or desperate, moments from clouding a bettor’s judgment.
Though hailed as effective guardrails by problem gambling experts and regulators and embraced by sportsbook operators, none of those tools are used by more than 2% to 3% of users of any of the leading U.S. sportsbook apps, industry sources said.
In surveys and focus groups, users say they regard responsible gambling tools as being “for someone else” — problem gamblers — rather than what clinicians assert them to be, self-imposed limits meant to keep them from developing a problem.
One benefit of more than 90% of legal U.S. sports betting being online is that it allows operators to know users’ identities and track every aspect of their play. Research of online play in Europe found that early indicators of an eventual problem often surface in a customer’s first 90 days on a site.
It’s reasonable to assume that the same modeling that sportsbooks use to predict a bettor’s lifetime contribution to its bottom line also could be used to identify problem play and intervene. Operators say they are working on that sort of modeling, as well as researching ways to make customers more receptive to the tools they provide and to develop new tools.
Setting limits is a pillar of the recommendations that sports fans see in the responsible gambling content that airs during events and appears across digital platforms. It’s one of three that appear in the current NFL responsible gambling spot featuring Hall of Fame quarterback Kurt Warner. And it’s the only one that shows up in a recently released spot that the NBA, NHL and Major League Baseball released in November.
This is not a new concept for bettors in legalized states. The “Have a Game Plan” public service campaign offered by the American Gaming Association and now signed on to by more than 30 leagues, teams and operators, has listed “Set a budget” at the top of its recommendations since its launch in 2020.
And yet, setting limits, at least hard ones, is so far from catching on that some sportsbooks are pivoting toward wording that at least sounds less restrictive, such as creating budgets. There also are suggestions that the term “responsible gambling” be abandoned entirely.
Whatever it is called, those in the gambling and sports industries and problem gambling advocates agree that the rapid expansion of legalized sports betting, which has unleashed a blizzard of advertising in each state as it opens, cries out for a proportional increase in problem gambling prevention and support.
The National Council on Problem Gambling estimates that the risk of gambling addiction in the U.S. has grown by more than 30% since the federal prohibition was lifted in 2018, with men 18 to 24 the most likely to struggle.
“Twenty years ago, I’d have said gambling is gambling is gambling, because sports betting has been around for a long time and we certainly have seen a lot of people in treatment,” said Keith Whyte, executive director of the NCPG. “But none of them had the ability to make hundreds of different bets within a particular game, on dozens of games a day and on hundreds of games on a weekend.
“Modern sports betting has a lot more clinical risk than traditional sports betting or other forms of gambling. It certainly is associated with higher rates of gambling harm.”
This is a realization that all of the leading U.S. leagues say they accepted when they chose to open the spigot on hundreds of millions in annual revenue from the sale of sponsorships and streaming data rights to sportsbooks.
“We came out with a public position that we think sports betting should be legal and regulated,” said Scott Kaufman-Ross, executive vice president of media and gaming at the NBA, the first league to publicly embrace legalization. “So I think it would be disingenuous of us to say we don’t feel like we’re a stakeholder here. We feel the NBA and sports leagues are a key stakeholder in sports betting. And therefore we have a responsibility to take a role in this aspect of it.”
The role of leagues
In the six years after the Supreme Court cleared the way for legalized sports betting, that role has evolved.
The NBA and most other leagues began by including responsible gambling components in their sportsbook sponsorship agreements and as part of authorized operator designations that allow sportsbooks to use league and team marks on their apps. Then came public service campaigns, often funded jointly with the sportsbooks, who in some cases commit to include announcements in their media spend. (see related story)
“We have spent a lot of time trying to figure out what our role is in responsible gaming,” Kaufman-Ross said. “And I think it’s more on the education side. Where we have shaken out is, given the platform that we have and the fact that sports bettors watch our games and access our platforms, education has to be a big part of what we do.”
The NFL began its responsible gambling journey during the 2021 season, the same year in which it struck its first sponsorship deals with sportsbooks and opened its game telecasts to sportsbook advertising.
Unlike the other leagues, it opted to align with the NCPG, expanding a long-standing relationship to include a three-year, $6.2 million grant, the largest in the history of the nonprofit.
That funding would be earmarked for three projects that the NCPG identified as priorities: The creation of a responsibleplay.org website that would serve as a responsible gambling information hub that the NFL and others could tag in their messaging; an annual grant to be awarded to other gambling prevention nonprofits; and, most importantly to the NCPG, funding for a badly needed modernization of its 1-800-GAMBLER line (see related story).
A Sports Business Journal review of data provided by the NCPG showed that calls, texts and chats to that and other help lines managed by the nonprofit have more than tripled in the last four years, rising from 26,087 in 2020 to 92,033 last year. That includes only contacts that lasted one minute or more.
Help line contacts in states with legal sports betting have risen from 5,716 to 44,726 during that same span, growing to account for about 48% of NCPG calls, which is about the same percentage of U.S. adults that now have access to online sports betting.
“It’s not something we created, but we know that sports gambling is going to increase as all these states are legalized,” said Anna Isaacson, senior vice president of social responsibility for the NFL. “So what does that mean for us? It means our fans are going to be gambling more. They’re going to be seeing more about gambling. They’re going to have more access to gambling. And so what can we do from a proactive standpoint to make sure that we aren’t doing any harm?
“We’re not in the business of causing harm and problems. It is our responsibility — and we do see it as our responsibility — to make sure we’ve got our heads on straight in thinking about things long term, and what could potentially not go right.”
The NCPG cautions against reading the dramatic increase in calls as a parallel rise in problem gambling.
“You haven’t created a whole lot of problem gambling addicts in the first month of sports betting in a state,” Whyte said, pointing to call spikes that often occur early on. “We think that one of the biggest drivers of help line calls is not the underlying rate of problem gambling, but the promotion of the help line. I think a lot of people with gambling problems have suffered in silence and never known where to turn. But when online sports betting was legalized, and all of a sudden the airwaves are blanketed with ads that include 1-800-GAMBLER, there’s a lot more people that are saying, ‘Oh, maybe there is hope and help available.’”
Now the vice president of gaming for the PGA Tour, Scott Warfield was managing digital media at NASCAR when he took on a side project assessing the implications of legalized sports betting shortly after prohibition was lifted. He remembers frank discussions with leadership about the risks that would accompany the commercial gains.
Late in 2020, NASCAR became the first league to sign on to the AGA’s “Have a Game Plan” campaign, developing content around the sport-specific tag line “Know When to Pit.”
“Whether you make cars, you sell beer, or you work in sports betting, I think there are impacts of what you do or build or sell that are going to have potentially damaging ramifications to a certain subset of society,” said Warfield, who left NASCAR to join the PGA Tour soon after the AGA campaign launched. “We went into it saying, this is going to happen one way or the other. If we’re going to reap the benefits of it, we’re also going to do everything in our power to take care of those who are going to need help. And that is honestly the core of where our outreach to AGA started.”
Warfield and his counterparts at the other leagues concede that they’re also motivated by the fear that problem behavior, left unchecked, could lead to increased regulation, such as the “whistle-to-whistle” ban on commercials during Premier League broadcasts in the U.K. or restrictions on jersey sponsorship in other countries.
In April, the five major U.S. leagues, NASCAR, Fox and NBC formed a coalition for responsible sports betting advertising that said it would address both the themes and volume of sportsbook advertising. That followed the AGA’s tightening of its responsible marketing code for sports wagering last year.
“When a fan becomes a problem gambler, it’s a terrible thing for us, it’s a terrible thing for our brand and it’s a terrible thing for the success of this industry,” said Casey Brett, senior vice president of business development for MLB and the former vice president of gaming at the league. “And we’re going to do everything we can to prevent it.
“We see [data] that there’s a lot of commercial value in a healthy sports betting environment. I don’t need any data to tell us what the pitfalls are if this starts going in the wrong direction.”
Identifying the problem
Entrusted with oversight of responsible gambling strategy when he was hired as vice president of communications at FanDuel late in 2020, Chris Jones quickly learned the business case that accompanied the obvious social contract that comes with running a licensed gambling operation.
The same tools that help bettors avoid addictive behavior and gamble within their means also can bolster customer retention.
“We don’t want to shake people upside down and get every penny out of them; that’s not sustainable,” said Jones, who handed off primary responsibility for responsible gambling two years ago but has remained engaged on the topic. “There’s a pool of money. And unlike Las Vegas, if the pool runs dry, I don’t have a free hotel room or a show to give you two tickets to. When that person loses money, they have to decide whether they want to put more money in.”
To that end, FanDuel has increasingly linked responsible gambling to its CRM functions, reviewing accounts not only to identify the best way to engage customers, but also watching for signs of problem play.
A user who drains an account during the early games on an NFL Sunday, replenishes and doubles down trying to get even during the late games, and deposits again on Sunday night is engaging in what is known as “chasing losses,” a behavior that often indicates the start of a problem.
Though users typically won’t have limits in place to prevent that, a sportsbook can take action when it sees it. That might start with serving up more responsible gambling content, and if necessary, escalate to a chat invitation or a phone call and the recommendation of a 90-day timeout.
Those who mention self-harm or financial hardship in a FanDuel chat — such as “If he misses this kick, I’ll kill myself” or “Looks like no rent money this month” — likely will invite at least a temporary shutdown, along with a closer examination of their accounts for indications of problem play.
Other leading sportsbooks have similar intervention policies to deal with problem behavior. And all offer tools that allow for self-imposed limits that could be the answer — if only customers would use them.
The FanDuel app allows users to set limits on bet amounts and the time spent on the app, in addition to taking a timeout from using the app.
Last year, FanDuel added monthly player statements that show how much a customer wagered and won or lost each month, delivered through push notifications. While it typically sees the same 2% to 3% pickup of traditional tools as other sportsbooks, FanDuel said 17% of monthly active users accessed the new player statements last year, with some of those also adding limits to their accounts.
“Not everyone is going to look at it, just like not everyone views their bank statement,” said Jill Watkins, senior director of strategy, operations and compliance at FanDuel. “But the idea is to have a re-occurring prompt that doesn’t feel too invasive but starts the conversation.”
In the coming year, the company hopes to tie player statements more closely to the tools, positioning them as budgeting devices rather than limits.
FanDuel also began tying responsible gambling more closely to CRM in the second half of last year, adjusting the push notifications and marketing messages that a customer will see if they’ve shown early indications of problem play. While they still will receive marketing messages and notifications of promotions, some might be replaced by links to responsible gambling content, such as reminders of limits and other budgeting tools.
“We need to work as an industry and ecosystem to understand how we can make those tools more engaging because they are a great resource to help manage play,” said Cait DeBaun, vice president of strategic communications and responsibility at the AGA. “So what can we do to make responsible gambling not be your mom putting rules and limits on you, but have it be something that is cool and people want to engage in? That’s the challenge we have at hand. We’re looking to invest in research that can help us understand that.”
One of the newer U.S. sportsbook entrants, Fanatics, is considering an intriguing approach, creating incentives for customers to set account limits. But rather than using the bonus bet credits often used to get customers to sign up or try new bet types, Fanatics would offer merchandise as rewards.
The company likely will test offering free caps to a small sample of customers who try tools later this year.
“We are the only company in the space that can provide non-gaming options as incentives,” said Anthony D’Angelo, who leads responsible gambling for Fanatics. “We’re doing research on that. Can we give things like Lids hats and collectibles to get customers to actually try a tool? That’s the beauty of the experience Fanatics can provide.”
Fanatics is considering using free or discounted merchandise as an incentive for users to try sports betting self-limit tools.fanatics
The thing that could prove even more effective than a broader acceptance of self-imposed limits is the early identification of customers who are likely to encounter a problem.
Using machine learning, FanDuel and other leading sportsbooks have fine-tuned their ability to predict which bettors are likely to deliver the most profit, over a sustained period, and serve them promotions designed to keep them moving in that direction.
If the research that indicates early markers of problem behavior proves applicable to the larger swath of U.S. sports bettors, sportsbooks also should be able to identify, and correct, problematic play.
“That’s an area we are very much on a journey with,” said Watkins, whose background at FanDuel and its parent, Flutter, is in CRM. “We are not there yet. We’re incredibly motivated to get there. We are putting people resources and financial resources behind it. A substantial amount of both.
“The sooner we can predict these things, the better for everyone. The better for customers, firstly. But also for us to maintain a sustainable business. If we can flag something sooner, we can take action sooner. And hopefully, as a result, you can be a customer of ours for a very long time. Or, we can say we know out of the gate that sports betting isn’t for you.”