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New Jersey Attorney General Jennifer Davenport said her office is monitoring allegations that sportsbooks are ignoring consumer safeguards and targeting customers showing signs of problem gambling. Her warning comes amid state licensing reviews, proposed marketing restrictions and federal inquiries into betting companies’ practices, according to The Highland County Press.
“Let them be warned, our office stands ready to take action against anyone who violates our gaming regulations and tries taking advantage of New Jerseyans and those who gamble here,” Davenport said in remarks to the RG Journal cited by the newspaper.
DraftKings’ VIP and marketing practices draw scrutiny
The scrutiny followed a ProPublica investigation that tested the safeguards DraftKings and other sports betting companies use to protect customers from problem gambling.
ProPublica reported that DraftKings awarded VIP status to a reporter who bet like a problem gambler and continued encouraging wagering after he activated responsible gaming tools. The reporter lost close to $6,000 in three weeks before receiving VIP status.
After losing about $4,500 betting on tennis in 24 hours, the reporter used responsible gaming tools. ProPublica found that betting push notifications resumed 30 minutes later, with four arriving before he activated a more restrictive cool-off tool.
Separately, The New York Times reported that DraftKings used machine learning and artificial intelligence to target promotions to losing bettors. DraftKings disputed that characterization.
“We do not use artificial intelligence to target losing gamblers by any means,” DraftKings co-founder and president of operations Paul Liberman told Louisiana regulators. A company spokesperson also said DraftKings “does not market to customers based on indicators of potential problem gaming.”
Louisiana delays renewal; Ohio proposes marketing pause
The Louisiana Gaming Control Board tabled renewal of DraftKings’ five-year license and granted a temporary four-month permit while investigators review the issues raised by the reporting.
Ohio regulators proposed a rule barring betting companies from sending direct advertising or marketing to customers for 48 hours after they opt into responsible gaming tools or update their settings.
Ohio Casino Control Commission interim executive director Andromeda Morrison described the proposal as a restriction intended to let consumers make choices without betting push notifications.
New York attorney general investigators have contacted former DraftKings employees about issues raised in the Times report, according to that newspaper. Regulators in Maine, Massachusetts and Michigan have also said they are reviewing some of the same issues.
Federal lawmakers seek VIP program information
Three Democratic lawmakers — Richard Blumenthal, Paul Tonko and Valerie Foushee — sent letters seeking information from major sports betting and prediction market companies about VIP programs and related revenue. Their letters alleged that rewards tied to increasing wagering drive susceptible customers into debt and addiction.
In response, FanDuel said “the VIP program is intended to provide enhanced service and encourage customers who chose to wager to use FanDuel rather than another platform.”
More from playnj.com
- NJ Online Casinos Set Revenue Record with $276.9M in July
- DraftKings and FanDuel split with AGA over prediction markets
- NJ Online Sportsbooks Roll Out NCAA Tournament Pools And Big Money Promos
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Source: As reported by The Highland County Press.
