Betting Apps Cap Winners, Reward Losers

Sports betting platforms routinely restrict the wagering limits of their most successful customers, often capping bets at amounts as low as 49 cents, while simultaneously extending lavish rewards to bettors who are losing money. This dual approach has drawn scrutiny from state regulators and federal lawmakers who question whether the industry prioritizes long-term risk management over fair play.

Last week, a group of U.S. lawmakers sent a letter to major gambling companies expressing concern over the treatment of vulnerable bettors. The letter cited the use of exclusive events, celebrity videos, and Super Bowl tickets to keep losing customers engaged. In contrast, winning gamblers face strict caps. DraftKings described this practice in a 2023 SEC filing, stating it follows industry standards by managing limits based on individual customer risk profiles.

Mike Manning, a professional better in Massachusetts, said he was winning on nearly every app until platforms began limiting his accounts. He reported being restricted to $25 per bet on DraftKings and $5 on BetMGM, despite previously wagering up to $5,000 per game. The Massachusetts Gaming Commission investigated the practice in 2024 and found that 0.64% of state accounts were restricted. The regulator required companies to notify bettors of limits and provide reasons for the restrictions.

Matthew Litt, a New Jersey attorney, noted that the practice is legal provided companies do not discriminate based on protected characteristics. FanDuel told Manning his account was restricted due to an assessment of his wagering patterns and their impact on the company's risk position. DraftKings cited internal risk management purposes. Michael Trevithick of Michigan shared a ticket showing DraftKings limited his NBA Cup wager to 49 cents.

On the other end of the spectrum, Chris Swett, a former South Carolina attorney, pleaded guilty to wire fraud and money laundering after stealing approximately $2 million from his law firm to fund his gambling. He claimed a FanDuel VIP host incentivized him to bet more by offering free tickets and bonuses. Swett wagered $11 million over two years and lost about $1 million. He faces a maximum of 20 years in federal prison and is currently awaiting sentencing.

FanDuel stated in a statement that it has made changes to its VIP program, including additional employee training and new technologies to identify problem gambling. The company emphasized that it is an entertainment platform rather than a tool for professional bettors. A DraftKings spokesperson said customer-specific limits apply to less than 0.15% of accounts and are generally a response to activity that appears designed to exploit odds discrepancies.