Sports betting firms limit big winners while rewarding frequent losers

CBS MoneyWatch reported that online sports betting companies are under scrutiny for how they treat their biggest winners and frequent losers. While companies offer extravagant perks to customers who lose large sums, such as VIP status with access to exclusive events and celebrity videos, they often limit the bets of their biggest winners.

The practice of "limiting" involves capping the bet amounts for successful gamblers, sometimes restricting bets to under $20 or even 50 cents. This tactic is used to ensure that the house maintains an advantage, according to Brianne Doura-Schawohl, director of the Campaign for Fairer Gambling.

A group of U.S. lawmakers recently expressed concerns about the exploitation of vulnerable bettors through VIP perks that encourage continued betting despite losses. Conversely, big winners face restrictions that can effectively cut them off from placing larger bets.

DraftKings, a major sports gambling company, explained in a 2023 filing with the U.S. Securities and Exchange Commission that they restrict betting limits based on individual customer profiles and risk levels. This industry practice aims to manage risk but raises questions about fairness.

The case of Mike Manning, a professional bettor who uses mathematical models and was winning on nearly every app in Massachusetts, illustrates the issue. After consistent success, he experienced bet limits imposed by the platforms, demonstrating the impact of the limiting practice.