Sports betting firms cap sharp bettors while rewarding high-rollers

Sports betting companies are facing increased scrutiny over a dual approach to customer management that limits winning bettors to amounts as low as 49 cents while lavishing rewards on losing players. This disparity has drawn attention from state regulators and federal lawmakers who question whether the industry favors the house over the consumer.

The practice of limiting, or capping, bet sizes for successful gamblers is standard industry procedure. In a 2023 filing with the U.S. Securities and Exchange Commission, DraftKings explained that it restricts betting limits at the individual customer level based on risk profiles. A DraftKings spokesperson stated that these limits apply to less than 0.15% of accounts as an enterprise risk control, often in response to activity that appears to exploit odds discrepancies.

Mike Manning, a professional bettor who launched his account in Massachusetts in 2023, experienced these restrictions firsthand. He reported that his bet sizes on BetMGM dropped from $1,000 to $5,000 per game to just $5. In another case, a bettor in Michigan showed a ticket where DraftKings allowed a maximum wager of 49 cents on an NBA Cup game. The Massachusetts Gaming Commission found in 2024 that winning gamblers see their limits decrease while losing gamblers see theirs increase, a trend the agency described as a "ban or bankrupt" model.

Conversely, losing high-rollers receive incentives to continue playing. Chris Swett, a former South Carolina attorney, pleaded guilty to wire fraud and money laundering after stealing $2 million from his firm to fund his FanDuel gambling. Swett said a VIP host offered him free tickets and a 4% bonus on new bets after he indicated he was tapped out. In a two-year span, Swett wagered $11 million and lost approximately $1 million.

A group of U.S. lawmakers wrote to major gambling platforms last week, expressing concern that perks like Super Bowl tickets and celebrity access distract bettors from their financial losses. Brianne Doura-Schawohl, director of the Campaign for Fairer Gambling, argued that the industry ensures the house always wins while pervasive advertising suggests customers can win. Massachusetts became the first state to require companies to notify limited bettors and provide reasons for the restriction. FanDuel told Manning the action was based on an assessment of his wagering patterns, while DraftKings cited internal risk management purposes.

The number of affected accounts remains small relative to the total user base. The Massachusetts Gaming Commission found that only 0.64% of betting accounts in the state had been restricted. Matthew Litt, a New Jersey attorney, noted that the practice is legal provided companies do not discriminate based on protected characteristics such as race or religion. FanDuel stated it has made changes to its VIP program, including new technologies to identify problem gambling, and described itself as an entertainment company rather than a tool for professional bettors to gain an edge.