Online sports betting companies are facing questions over a two-sided practice: generous rewards for customers who lose large sums, and tight restrictions on those who win consistently. The restrictions, known in the industry as "limiting," have drawn the attention of state regulators and lawmakers.
Brianne Doura-Schawohl, director of the Campaign for Fairer Gambling, argues the platforms are built so the house always comes out ahead. "I would argue it's not fair, and what makes it more unfair is all of the pervasive advertising tells us all that we can win," she said.
Last week, a group of U.S. lawmakers wrote to major gambling platforms about the exploitation of vulnerable bettors. Their letter said perks such as access to exclusive events, videos from celebrities and athletes, and Super Bowl tickets "distract bettors from their financial losses and encourage betting when they otherwise would not." Successful bettors, by contrast, can see their wagers capped at under $20, and sometimes below 50 cents.
Mike Manning, a full-time professional bettor who relies on mathematical models, signed up with every available app when Massachusetts launched sports gambling in 2023. He says he won on nearly every one before the platforms began restricting him. On DraftKings, he said, he was limited to $25 per bet. On BetMGM, he went from wagering $1,000 to $5,000 per game to being allowed only $5. "You're exploiting the losing bettor, you're taking advantage of them, and guys like me get shown the door," he told CBS News. BetMGM declined to comment.
The Massachusetts Gaming Commission began examining the practice in 2024, requiring companies to answer questions and supply data. Its investigation last year found that winning gamblers tended to have their limits lowered, while losing gamblers had theirs raised. The commission also found that 0.64% of Massachusetts betting accounts had been restricted. The state became the first to require companies to tell bettors when they are limited and explain why. FanDuel cited an assessment of Manning's wagering patterns and their effect on its "long-term risk position," while DraftKings pointed to "internal risk management purposes."
Another bettor, Michael Trevithick of Ann Arbor, Michigan, showed CBS News a ticket indicating that the most DraftKings would let him wager on the NBA Cup was 49 cents. A DraftKings spokesperson said the company applies customer-specific limits to less than 0.15% of accounts as an enterprise risk control, generally in response to activity that appears designed to exploit errors or odds discrepancies, regardless of whether the customer is winning or losing. New Jersey attorney Matthew Litt said the practice is legal as long as companies do not discriminate based on protected characteristics such as race or religion.
The other side of the industry is illustrated by Chris Swett, a former South Carolina attorney who is awaiting sentencing after pleading guilty to four counts of wire fraud and four counts of money laundering. He stole about $2 million from his law firm to fund a gambling addiction, much of it spent on FanDuel. By 2019 he was wagering $5,000 to $10,000 a month, and he says a FanDuel employee then told him that customers spending $25,000 a month could be paired with a VIP host offering free event tickets and contest entries.
In one 2020 email, Swett told his host he was "tapped out" for the month. Two days later, he says, the host offered a 4% bonus on new bets. Over one two-year period, Swett says he wagered $11 million and lost about $1 million. He faces up to 20 years in federal prison. "I take personal responsibility for everything I did, but it just seems like their system was designed to keep me playing," he said.
FanDuel said millions of customers use its service responsibly and have tools such as deposit limits, timeouts and self-exclusion. It said it has since made significant changes to its VIP program, including more employee training and new technology to identify problem gambling. The company added that it is an entertainment business, not a tool for professional bettors, and that its risk protections have been reviewed by multiple state regulators.
