Schuetz: Players Getting Played And The Bad Friend Model Of Sports Betting

“Life is too short for fake butter, cheese, or friends.”

— Unknown

New Jersey Gov. Phil Murphy has recently suggested increasing the tax rate on sports betting and online casinos. I wrote about this topic just last week. An amazing flash of the obvious is that the people who provide these online sportsbook and iCasino products in New Jersey are unhappy with this effort.

The usual subjects were most offended by Gov. Murphy’s tax suggestion, and since they are paid to be offended by this type of thing, they have begun baying. This would include the Sports Betting Alliance, the Casino Alliance of New Jersey, and the operators — but I repeat myself.

A bit of a twist in this situation was an enhanced effort to mobilize actual bettors to contact the legislature and pressure it to deny the tax increase.

This is an excellent aspect of the strategic plan to slow down, stop, or reduce the tax increase. And let me be clear: An increase in the tax rate is bad for bettors. There is no question about this. I am on board with the recommendation.

But you know what else is bad for bettors? Banning or limiting more competent players who work harder, spend more time on their models, are more innovative, and put their all into it. As professional bettor Billy Walters often suggests, that is un-American. It is designed for the mediocre and punishes those who excel. It is also not sports betting. It is a model that is content with picking the low fruit while hoping to find gold mines to pillage.

But wait, there’s more!

Another bad thing for bettors is aggressively targeting players whose data trails indicate that they are getting over their heads. Check this out. Allegations of player abuse damage the whole system, lead to image issues, and enhance over-reaching regulation and legislation. Destroying lives may be positive on the short term for the operators’ profitability, but it is bad for all players. 

On that topic, you know what else is bad for bettors? Operators and their lobbyists losing their voice during the legislative process when it comes to funding programs for problem gambling. Too many states have no earmarks, and provide no guidelines, and that is a road to waste and abuse. That is bad for players.

Another bad thing for players is that putting money into the system is materially easier than taking money out of the system. The regulators should insist that all operators report the time lag from when the player requests his or her money to when they get it. This could be provided to the regulators monthly. They should find clear differences between operators, and these frictions are often designed into the withdrawal process. This is because of the operator’s desire to get another bet, as the bettor’s patience is exhausted when trying to move his or her bankroll out of the system or to another site; it also gives the operator more time to provide a spicy betting incentive. It also works to exploit problem gamblers and is a bad policy from the perspective of responsible gambling.

Another problem for bettors is the industry’s dependence on massive and often incomprehensible terms and conditions. I can walk into Caesars Palace and bet $5,000 on a dice game, and a dealer or supervisor will call out “money plays to table limit.” I do not need to read and sign off on a massive legal document that I am not qualified to read, interpret, or understand its legal implications. But I must sign this lengthy document to wager one dollar in the online sports betting space.

All regulators in leadership positions should be required to sign off that they understand and approve of the various terms and conditions used in their jurisdiction. Moreover, we should have regulatory contests at gaming conferences. Pick four regulators from different agencies, put each behind a podium with a buzzer, and ask T&C questions. 

The point is that terms and conditions appear designed to confuse and be ignored by players, yet they are used against them in multiple situations. What makes this fraud more appalling is that oftentimes in a dispute, the word from the operators is “based on our terms and conditions,” without further detail.

Operators call their own balls and strikes

As part of this, the nonsense about palpable or “obvious errors” being determined at the operator’s discretion is nonsense. Develop a regulatory review process or an ombudsman. The way it is now is a license for the operator to be sloppy, amateurish, and lacking appropriate internal controls. Also, it contradicts the notion of fairness, where the consumer suffers from operator errors. 

The ombudsman or regulatory process should also be available at a player’s request in any dispute with an operator that cannot be resolved. Moreover, all unresolved disputes over $500 must be referred to this entity. It should be required of the licensee to inform the bettor of these options.

The bettors need to wise up and not let the operators’ slowness to reply to disputes discourage them. If you don’t get a reasonable answer or a prompt answer, get in touch with the regulators. One avenue to try is here. Also, the regulator should require that all disputes are logged as to when filed and when resolved. That should be part of a monthly report to the regulators. This can also help them see who are the good operators and who needs to improve.

Another problem for bettors is the industry’s oligopolistic market structures. A first-year economics student can point out a wide range of reasons why this creates opportunities for artificially high pricing, excessive profits, and poor service levels. 

The hodgepodge of terms and conditions between operators and jurisdictions is also bad for bettors. This confuses people, and if one operator pays a bettor that another operator denies for the same event, the players feel cheated. The same goes for bet grading. If the operators care about the bettors and want to maintain a positive image of the industry, they should work to make the T&Cs and grading uniform across all jurisdictions and operators.

In response to a threat of increased taxation, the industry has instructed bettors to call someone who might help stop or reduce it. They have done this under the suggestion that it is bad for bettors, and I wholeheartedly agree. 

But while you are on the phone, or filling out a letter or form, mention the whole array of things that clearly demonstrate that the operators are not concerned about the bettor and ask the legislator to help fix those issues, too.

The industry and its paid voices are trying to be the type of friend who only needs you when they need help. Let them know it is a two-way street and that other issues are bad for bettors and should be addressed.

It only seems fair.

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Richard Schuetz entered the gaming industry working nights as a blackjack and dice dealer while attending college and has since served in many capacities within the industry, including operations, finance, and marketing. He has held senior executive positions up to and including CEO in jurisdictions across the United States, including the gaming markets of Las Vegas, Atlantic City, Reno/Tahoe, Laughlin, Minnesota, Mississippi, and Louisiana. In addition, he has consulted and taught around the globe and served as a member of the California Gambling Control Commission and executive director of the Bermuda Casino Gaming Commission. He also publishes extensively on gaming, gaming regulation, diversity, and gaming history. Schuetz is the CEO American Bettors’ Voice, a non-profit organization dedicated to giving sports bettors a seat at the table.