Reuters: Gambling Firms Admit to Using High Risk Features in U.S. Market That They Prohibit in the UK
The European companies behind FanDuel and BetMGM admit to using features in America that they dropped in Britain after acknowledging said features presented risks to gamblers.
In 2018, British regulators sanctioned the UK arm of online gambling giant Flutter after it failed to catch an astonishing anomaly. The head of an animal shelter had been embezzling money from his employer to fund his bets, losing what the charity said was more than half a million dollars over four years. A fine of $2.8 million was imposed as a result and Flutter’s Chief Executive Peter Jackson publicly apologized for allowing the problem gambler to continue placing bets.
From Reuters:
"Over the next few years, another one of Jackson’s customers — this time in America — spiraled even further out of control, gambling millions of dollars of stolen money with Flutter’s U.S. brand FanDuel. Amit Patel, then a mid-level finance manager at the Jacksonville Jaguars football team, deposited $20 million of his employer’s money into his FanDuel account between 2019 and early 2023, and then lost most of those embezzled dollars, according to court documents. Patel and the British animal-shelter chief each pleaded guilty to fraud."
Despite the enormous sums, FanDuel didn’t question the source of Patel’s funds until late 2022, his lawyer, Alex King, told Reuters.
"In Britain, where online gambling is more established than the United States, Flutter and other bookmakers have in recent years acknowledged some of their previous practices risked causing harm and ended those practices. Some have also publicly accepted a responsibility to protect customers from problem gambling as cases of addiction, suicide and gambling-related crime stacked up there.
"But in the booming American market, Dublin-based Flutter and Britain’s Entain (ENT.L) — which jointly owns U.S. sports betting company BetMGM — have not implemented many of those same safeguards. They also routinely employ practices they discontinued in Britain after admitting they put UK gamblers at risk, Reuters found, based on a review of corporate filings, company statements, executive testimony to lawmakers, job advertisements and interviews with gamblers and former employees."
And it's not just FanDuel ignoring protections that appear to be working in the UK while being ignored in the U.S.
Entain's Chief Financial Officer Rob Wood told Reuters: "It is true to say right now the U.S. is in its infancy, and there is less of the kind of protections that you see in the UK."
One feature prohibited in Great Britain that is common in the U.S. is allowing some online slots features such as enabling gamblers to set the game to play automatically without even having to watch the screen.
Flutter in 2021 introduced a limit for UK customer bets on online slots games to £10 per spin, or about $13 after identifying a trend in its data that “suggested that customer risk levels may increase more sharply” among clients wagering more.
In the U.S. customers are allowed to bet $800 on each spin. We would note that only a handful of states allow for online casino gambling presently and this haphazard approach by operators might hamper their ability to enter new markets.
Online betting firms appear to be fighting any efforts to impose restrictions.
U.S. Representative Paul Tonko, a New York Democrat, announced plans this year for a bill that would require sports betting operators to introduce measures to help prevent gamblers spending more than they can afford. His bill would have prevented credit cards for funding betting accounts or placing wagers and it required background checks on customers. Tonko told Reuters the companies opposed his bill, though he failed to provide Reuters with any details.
Online sports bookmakers alone took $114 billion of U.S. bets in 2023, according to the American Gaming Association, the industry’s main lobbying group.
The Reuters story is extensive. Check it out in its entirety here.
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