© Provided by Boston 25 News Legalized mobile sports betting begins in Massachusetts
For gaming lobbyists Bill Pascrell and Martin Lycka, the legalization of online sports betting in Massachusetts – and the deluge of ads featuring Boston sports legends – heralds a fatal blow to illegal betting sites and provides a data-driven way to target hard-to-reach problem gamblers.
“Those legislators coming up with these crazy ideas to ban advertising, all that’s going to do is push people to the black market,” Pascrell, a partner at the nation’s largest statewide lobbying firm Princeton Public Affairs Group, told 25 Investigates in a wide-ranging interview with anchor and investigative reporter, Kerry Kavanaugh.
But for several public health experts and researchers, the head of the Massachusetts Council on Gaming and Health, a lawmaker and two problem gamblers, the legalization of online sports betting on March 10 means that it’s now easier and faster than ever for sports betting companies to target young adults and other vulnerable groups who may have never tried it otherwise.
“Young people are certainly of great, grave concern for us,” Marlene Warner, Chief Executive Officer of the nonprofit Massachusetts Council on Gaming and Health, told 25 Investigates.
“The speed of being able to bet on these online apps is as much a concern, in my opinion, as the greater accessibility,” Researcher Rachel Volberg, research professor in the Department of Biostatistics and Epidemiology in the School of Public Health at the UMass Amherst School of Public Health and Health Sciences, said.
As of early May just about 950,000 unique users in Massachusetts have signed up to bet on sports online, according to the state gaming commission.
“Back in the day, we had to get on planes or get in cars and drive to Atlantic City or fly to Las Vegas,” Marty Tirrell, who is in recovery from problem gambling, said. “Now, it’s in the palm of your hand.”
That’s why a growing chorus is calling for Massachusetts to further tighten its restrictions on ads touting online sports betting, despite pushback from the industry.
“Because it’s new, there’s still a lot more that we have to do to make sure it is not actually having the same effects as those in the black market would have on those young people,” Attorney General Andrea Joy Campbell, a Democrat, said in an interview with anchor and investigative reporter, Kerry Kavanaugh.
She added: “When you have sports betting on an addictive device, it compounds it and makes it even more difficult for a resident or a consumer to, frankly, not become addicted to gambling.”
“IT’S A LOADED GUN”
About one in ten – or half a million adults in Massachusetts – already meet the criteria for problem gambling or are at-risk.
That’s according to 2014 survey data reported in the Social and Economic Impacts of Gambling in Massachusetts project’s 2017 report.
And the state public health department says more than 40,000 kids already report problems with gambling – a figure that’s quadrupled in two years.
Once kids or young adults get hooked, gambling can lead to far ranging consequences for their health, relationships, finances and jobs down the road, according to Vllberg.
That could mean increased demand for addiction and mental health treatment.
Researchers are still gathering data about online sports betting – including who’s playing, their ages and the extent of problem gambling.
Kenny Olson, 57, of Foxboro, said he remembers starting off gambling on sports as a kid, and feeling the rush of betting on any game – from wiffle ball to ping pong.
“I never wanted to do anything for fun,” Olson said. “I always wanted action, whether it was Wiffle ball, ping pong, you know, darts, bowling, anything I thought I could control the outcome of. I wanted to gamble on it.”
“I remember I was probably ten, 12 years old and I was playing Horse and I won,” Olson said. “I came home with $21 and I remember throwing it on my bed and my mother said: ‘Where did you get that money?’ .. And it seemed like a lot of money.”
The Red Sox’ loss in the ‘75 World Series served as a turning point for Olson – a marker of when his fascination with sports began to morph from love of the game into a compulsion to gamble.
Soon, Olson began to rely on the high that gambling offered.
“You couldn’t do the damage at 13 that you could do at 23 and 33,” Olson said.
“Gambling compulsively, believe it or not, is an action high,” Olson said. “It’s an endorphin kick that’s euphoric, it’s excitement. And when you’re not gambling and you’re a compulsive gambler, you have withdrawals from it.”
Olson recalls planning to bet only on the 1:00 p.m. NFL games and not the 4:00 p.m. – only to end up betting on both as well as the 8 p.m. game, and the Monday night game.
“I thought I was in control, you know, and I thought that boundaries were eventually going to take over and be rational,” Olson said. “And if you were to tell me that I would have to lose X amount of dollars, I would tell you that will never happen. I’ll stop way before that.”
He went to Gamblers Anonymous meetings in the late eighties and early nineties, and “kicked around the program” for several years. But it didn’t stick.
His wake-up call – Dec. 27, 1998. He had placed “thousands” of bets on a Washington-Dallas game.
“And if I had won, it wouldn’t have been my last bet, you know,” Olson said.
He continued: “And that becomes a high for a compulsive gambler. How low can you go? How desperate can this get? You know, what can I leverage? What can I refinance? What credit card can I pull on?”
The next Sunday, he walked into his first gambling support group in five years.
Since then, he’s been on the road to recovery.
For Marty Tirrell, of Deerfield, he says his problem gambling began as soon as he started placing bets as a teenager: “I don’t ever remember gambling normally,” he said.
Tirrell, who grew up in a family with horses, said he remembers placing his first bet as a 15-year-old in 1975: “I had a win and then I lost, and I”m still chasing that money.”
He went through $2 million but didn’t hit rock bottom until 2018, when the federal government indicted him for wire fraud. He pleaded guilty and got a 41-month sentence.
“It was directly tied to my online horse and illegal sports gambling offshore before it was legal,” Tirrell said, estimating hundreds of thousands of dollars in losses.
He’s now coming up on five years clean.
“The compulsive gambler always thinks that big win is going to come and you’re going to get even,” Tirrell said. “You never get even. You get even worse.”
He credits the 12-step program, his sponsor, and his fellowship as his lifeline.
Both Tirrell and Olson said they’re going public to speak out against the flood of alluring ads by sports betting companies.
Olson calls himself a “free market,” “free-will” person and doesn’t believe in an outright ban on gambling.
But he’s concerned about the draw of enticing promotional offers and so-called “risk free” bets on young people.
“Younger minds can be more manipulated and younger minds can’t process what is in store for them,” Olson said.
“They’re able to think that, oh, I can gamble on these games for $5 a game and that $5 turns into 20 bets, that’s $100, you know, and play ten more bets that’s $1,000,” Olson said.
Olson said he’s worried about young people with disposable incomes, or those who can rely on parents and others around them to bail them out.
“The mindset of a young person is that they’re going to win,” Olson said. “They could actually think that they could get something for nothing. And life doesn’t work like that.”
“STILL A LOT OF WORK TO BE DONE”
Massachusetts has taken lessons from other states to address potential problem gambling.
Sports betting operators must allow players to set limits on how much time and money they spend.
But 25 Investigates reviewed all the websites run by Massachusetts’ six sports betting operators, and found some don’t make it easy for users to find help with problem gambling.
FanDuel has a link to their responsible gaming resources listed prominently in the center of their home page.
Caesars Sportsbook’s webpage has a icon linking to GameSense – the MA gaming commission’s responsible gaming hub – and details to the state’s gambling hotline.
Barstool Sportsbook has a banner promoting responsible gaming resources at the top of their webpage.
WynnBet places its link to responsible gaming resources nearly all the way on the bottom of its webpage.
DraftKings, meanwhile, has a small icon in the top right corner linking to gambling resources.
DraftKings, which is headquartered in Boston, doesn’t list any problem gambling resources for Massachusetts on their website. Hotlines and provider lists are provided for Pennsylvania, in contrast.
And on BetMGM’s website, users have to click as many as 4 pages before they find any help for problem gambling.
None of Massachusetts’ six sports betting operators agreed to an on-camera interview with 25 Investigates. Some provided statements outlining their efforts to follow state regulations.
When asked about BetMGM’s website, lobbyist Lycka said: “I take your point, there’s still a lot of work to be done.”
Lycka is senior vice president for American Regulatory Affairs and Responsible Gambling at Entain, one of the world’s largest sports-betting and gaming companies. BetMGM is a joint venture of Entain and MGM Resorts.
Lycka stressed operators are taking the issue seriously.
“The operators, in my view, have recently, in the last few years have done a much better job at encouraging patrons to opt in and start using those tools,” Lycka said.
The state gaming commission’s website doesn’t have data on how many people have signed up for tools like self-exclusion lists, which prevents someone from entering a casino or placing a bet online.
Another issue is how often sports betting platforms are offering help – like gambling treatment referrals – to users who are showing signs of addiction.
This year, New Jersey began requiring online betting companies to track customers’ behavior for signs of problem gambling: from spending increasing amounts of time playing, to betting until they have less than $1 left.
Further steps range from offering resources to reaching out to players directly.
“That’s the benefit of online sports betting, casino and poker,” Pascrell said. “The industry can track you as well as the regulators. So we know we don’t want to get into the old style tradition of looking at the problem gambler as the VIP customer.”
Pascrell said other states should “absolutely” adopt New Jersey’s model.
“Give us a chance to self-regulate, give us a chance to have a conversation with you about what to do,” Pascrell said.
AG Campbell said she wants Massachusetts to put more of the onus onto operators by looking at examples like New Jersey’s.
“We know New Jersey, and other places we’re looking at, are putting some of that onus on the operator, and rightfully so,” Campbell said. “Because not only do they have the ability to design the technology in a certain way that is helpful and useful, they also have the tools to look at tracking certain information that is available to them.”
AGE VERIFICATION
It’s already illegal to bet if you’re under 21.
And sports betting operators say they’re a safe and better regulated option for young adults than illegal apps.
Would-be players have to submit the last 4 digits of their Social Security number for age verification.
But Campbell, as well as Massachusetts Council on Gaming and Health CEO Marlene Warner, want regulators to go farther.
They say requiring users to submit an ID like a driver’s license and selfie will do more to prevent underage use of older siblings’ or friends’ accounts.
“I think that goes a long way to make sure that the person sitting in front of that computer is who they say they are,” Warner said.
Lobbyist Martin Lycka said requiring such authentication provides “an additional layer of control.”
25 Investigates tried signing up for accounts on all of the six betting platforms.
Unlike the rest of the platforms, 25 Investigates was able to create a user account for DraftKings without needing to provide the last 4 digits of a Social Security number.
“RISK-FREE BETS”
Massachusetts regulators have also banned the use of terms like “risk-free” or “free bets” in gambling advertising and promotions.
But Campbell said even stronger regulations would have prevented many of the sports betting ads that ran on Massachusetts airwaves this spring.
Warner said she’s concerned that sports betting advertisers are trying to get around that ban with similarly enticing offers.
“They’re not saying free bets or risk free bets,” Warner said. “But when you have spent $10, get $200 in the very fine print. It talks about bonus betting. I think that impacts people. I think referral bonuses impacts people.”
Caesars and BetMGM both offer bonus bets up to $1,000 or so for those who lose their first wager of $10 or more. Wynn Bett also offers “bet credits” for first time bets of $100.
DraftKings and FanDuel both offer $150 in bonus bets for new customers who bet $5 or more. Both, along with BetMGM also offer bonus bets for users and referred friends.
But the fine print for those offers makes clear that bonus bet amounts aren’t included in returns or winnings.
And the platforms typically say that users will only get bonuses if the credit officially is settled as a loss: Barstool Sportsbook excludes bets settled using the “cash out” feature.
State Sen. John Keenan, a Democrat, has sponsored a bill taking aim at “deceptive” gambling ads.
His bill could make it easier for the public and the AG to file lawsuits against gaming ads that offer bonus promotions, same-game parlays, odds boosts or risk-free, no sweat or other free wagers.
“THE POWER OF A CELEBRITY”
Both Campbell and Warner also want more scrutiny about the use of well-known former Boston sports figures in advertisements.
DraftKings has draped trash bins and buses across Boston with advertisements featuring legends like Big Papi and Olympic medalist and gymnast Aly Raisman.
“Celebrities, they have a role in responsible gambling as well, in my view,” Lycka said. “Because who else would you take that message from then? An athlete, either a current athlete or retired athlete, who could be a very efficient and very effective, responsible gambling champion.”
But Warner said she’s worried about who’s being drawn in by ads featuring celebrities.
“Right now there are not current athletes being shown in the ads, but they’re pretty prominent players, right?” Warner said. “I mean, Big Papi is a big name around here. So it doesn’t matter that he’s no longer an active Red Sox player. It’s that we want to see: What is the impact on kids, but also vulnerable population, people most at risk?”
AG Campbell said her office isn’t looking at banning the use of celebrities in ads altogether.
“We’re just saying in this industry you have to be mindful of who you are using, but most importantly, who you are paying,” Campbell said. “These folks are being paid. Paid to do what? Not just to promote a particular gaming company, but to promote a particular app, to also promote at times a particular bet that they know is a losing bet. So our office says that’s unacceptable. We don’t want our people losing before they even start the game.”
Campbell also wants to take aim at the practice of third-party advertisers or paid influencers suggesting bets as if they had inside knowledge.
And there are more steps that the AG and other observers want regulators to take: from taking more steps to ensure advertising isn’t reaching people under 21, to limiting time and frequency of ads, to giving more teeth to regulators to pinpoint potentially illegal ads in the first place.
The state gaming commission provided details about regulations they’ve passed to strengthen scrutiny over advertising, but declined to answer questions about potential future steps they’re considering.
“THEY’RE NOT MAKING MONEY”
Casinos, sports betting operators and industry groups reported spending at least $1 million on lobbyists in Massachusetts in 2022 alone as lawmakers debated sports betting legislation, according to 25 Investigates’ analysis of state lobbying reports.
Former Gov. Charlie Baker, a Republican, signed sports betting legalization into law in August.
From March 10 through March 30, the six legal online sports betting platforms operating in Massachusetts reported $548 million in online bets placed.
The platforms reported $46 million in revenue. That resulted in $9.1 million in tax revenue for the state, which hopes to see as much as $60 million in the first year of legalization.
Nationwide, sports betting platforms have reported increasing revenues as more states have legalized online betting.
But lobbyist Pascrell claims sports betting is not a highly profitable industry yet, partly because of the cost of advertising and complying with differing state regulations.
“They’re not making money,” Pascrell, of New Jersey, said. “None of these businesses have made a profit yet. None of them… They’re not making a profit, none of them from Fan Duel and DraftKings to BetMGM, none of them have made a profit. The profit margin in sports betting is very thin.”
Indeed, the margin for sports betting is comparably small and depends on a high volume of customers.
The Associated Press in 2019 found that tax revenue fell far short of projections in four of the six states that launched in-person or mobile gambling on sporting events in 2018. New Jersey, which legalized online gambling, met its projections.
Still – DraftKings’ Chief Executive Officer and Co-founder Jason Robins told investors this month that he’s “confident DraftKings is well-positioned to achieve profitability” soon.
And Caesars Entertainment CEO Tom Reeg told investors in a May call that online sports betting is becoming profitable.
This is a developing story. Check back for updates as more information becomes available.
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