Designing promos to attract problem gamblers
The Mayor and City Council of Baltimore have sued DraftKings, Inc. and Flutter Entertainment plc, the latter the parent company of FanDuel, for what they call “deceptive and unfair practices.” The lawsuit, filed by the law firm of DiCello Levitt, claims that the companies specifically target “vulnerable” gamblers.
The City of Baltimore claims that DraftKings and FanDuel do two things. First, they offer promotions like “bonus bets” to attract gamblers and design them to “encourage compulsive gambling behavior.” Second, and this is the much more serious accusation, the lawsuit says the companies use the data and analytics they have on current customers to identify those with gambling problems and tailor offerings to “extract what they can from them.”
“These companies are engaging in shady practices, and the people of our city are literally paying the price,” said Baltimore Mayor Brandon Scott in a press release. “DraftKings and FanDuel have specifically targeted our most vulnerable residents—including those struggling with gambling disorders—and have caused significant harm as a result. This lawsuit is a critical step to hold them accountable and protect all Baltimoreans.”
Industry has a history of promo problems
The topic of bonus bets and similar promos has long been a point of controversy in the gambling industry, not just in sports betting, but in other verticals like online poker and online casino games. It has become much more visible to the American public in recent years, though, as sports betting has been legalized in nearly 40 states and sports betting advertising is commonplace.
Certainly, companies and industries use promotions to attract customers all the time. Department stores have holiday sales, car dealerships offer financing deals, grocery stores issue coupons. The problem people have with sports betting promotions, though, is that they make it sound like an almost too-good-to-be-true deal, while the fine print is either difficult to access, difficult to understand, or both.
In the early days of legalized sportsbooks in the United States, many betting companies used language like “risk-free” or “free” bets to attract customers, when the bets were anything but. To that end, some states updated regulations to prohibit that type of terminology. The NBA has barred sportsbooks from using “risk-free” language in their promos.
Things have improved, as terms like “bonus bets” are a bit clearer and do not imply that there is no way a person can lose. But even then, gamblers often do not understand that it is not simply a matter of the sportsbook giving them more money with which to bet, but rather there are requirements on how much one has to bet and in what time frame in order to earn said bonuses.
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