Limit the Winners, Court the Losers? Sportsbook Bet Limits and VIP Programs

Timeline

1. Spring 2024The Massachusetts Gaming Commission begins reviewing how and why sportsbooks limit bettors, holding roundtables with operators and experts.
2. Nov 21, 2024The commission directs staff to request data from licensed operators on limited accounts, closing line value and VIP status.
3. Dec 10, 2024The data request is sent to operators.
4. Dec 2024A New Jersey mother sues DraftKings, alleging that VIP hosts encouraged her husband's gambling addiction.
5. Apr 10 and Jun 5, 2025Follow-up requests ask operators about limiting practices and VIP programs, and for updated data.
6. Sep 30, 2025Commission staff report that winning bettors are more likely to be limited and raised-limit bettors far more likely to be VIPs.
7. Nov 10, 2025A federal judge remands Baltimore's consumer-protection suit against DraftKings and FanDuel to state court.
8. Feb 26, 2026The commission unanimously approves a rule requiring notice within 48 hours, with a specific reason, when a bettor is limited.
9. Jun 1, 2026The notification rule takes effect, including for existing limits.

The ethical issues

• Fairness: sportsbooks advertise betting as a contest of skill but restrict the customers who show skill.
• Exploitation: VIP perks and higher limits concentrate on customers who lose the most, some of whom may have gambling problems.
• Transparency: bettors were often limited without explanation.
• Regulatory capture and confidentiality: operator data was given voluntarily on a promise of confidentiality.
• League partnerships: leagues and teams that profit from sportsbook deals share in the reputational risk.

Stakeholders

Stakeholder	Interests & obligations
Recreational bettors	Fair treatment, clear rules and protection from harm.
Winning ('sharp') bettors	Being allowed to bet on advertised terms.
People with gambling problems and their families	Not being targeted with incentives that deepen losses.
Sportsbook operators	Managing risk and profitability; brand reputation.
State regulators	Consumer protection and market integrity.
Leagues and teams with betting partnerships	Revenue and the credibility of partners whose brands appear in their venues and broadcasts.

The case

Sportsbook advertising often promises that knowledge pays: study the matchups, trust your instincts, beat the odds. Bettors who actually do beat the odds over time frequently discover a different reality. Their accounts are “limited,” so that a $500 bet is cut to $5, often with little or no explanation. At the other end of the spectrum, customers who lose heavily may be assigned a personal “VIP host” who sends bonuses, tickets and gifts. In 2024, one state regulator decided to find out how these practices actually worked.^[1][5]

Background

Legal online sports betting spread across the United States after 2018, and leagues, teams and broadcasters signed lucrative partnerships with operators. Sportsbooks are businesses that set prices (odds) and profit from the margin built into them. A customer who consistently bets at better prices than the final market price, known as beating the “closing line,” is a financial risk to the operator. Limiting such customers is common practice and is generally legal.^[1]

Operators also run loyalty and VIP programs for their highest-volume customers. Lawsuits filed in 2024 and 2025 alleged that some VIP customers were people with serious gambling problems. In one, filed in December 2024, a New Jersey mother sued DraftKings and its casino partners, alleging the company had “actively” participated in her husband’s addiction by “targeting him with incentives, bonuses, and other gifts.” According to the complaint, he was placed in a VIP group in 2022 and 2023; his average monthly deposits rose from about $2,000 in 2020 to about $64,715 in 2023, against an annual salary of roughly $175,000; and his bets rose from about 1,600 a year to more than 14,000. She alleged that nearly $1 million belonging to her and their children was lost. DraftKings did not comment to The Guardian, and the allegations had not been tested in court at the time.^[5] In April 2025, the city of Baltimore also sued DraftKings and FanDuel over their promotional tactics and safeguards.^[6]

The rules and governance

Sports betting in the United States is regulated state by state. Regulators license operators, approve house rules and internal controls, and can require reporting. Before 2026, no state specifically regulated how or why operators limited bettors. Responsible-gaming requirements typically focused on tools such as deposit limits and self-exclusion, not on how VIP programs selected and treated customers.^[1][2]

The Massachusetts investigation

The Massachusetts Gaming Commission began reviewing the practice in spring 2024, seeking to understand “how, when, and why a player might be limited.” After two roundtables, it directed staff on November 21, 2024 to request data from licensed operators, and a request went out on December 10. It asked operators for each customer whose “stake factor,” the multiplier operators use to raise or lower a bettor’s maximum wager relative to the default, was below or above normal, along with each customer’s closing line value and whether they had a VIP host. Participation was voluntary, and the commission promised to keep the data confidential. Follow-up requests in April and June 2025 asked about limiting procedures and VIP programs and sought updated figures.^[1][4]

Staff presented the results on September 30, 2025. Across operators, the analysis “confirmed that players who consistently beat the closing line are more likely to have a lower stake factor (i.e., have their limit lowered)” and that players who do not are more likely to have their limit raised. It also found that “individuals whose limits have been raised are far more likely to be classified as VIPs while very few limited players had VIP status.” On average, 0.64 percent of Massachusetts accounts were limited as of December 2024. Of those, 12.7 percent were limited to less than 1 percent of the default stake and 57.6 percent to between 1 and 24 percent. Most players’ stake factors did not change over six months even when their betting performance changed substantially. The memo noted that operators likely consider other factors as well.^[1]

Staff set out options, including requiring operators to notify limited players, to disclose in advance the behavior that could lead to limits, to document limiting procedures, to report regularly and to review limits every six months. They also floated research into capping how far limits could be raised or lowered and how many players an operator could limit.^[1]

The 2026 rule

On February 26, 2026, the commission voted 5–0 to require sportsbooks to notify a bettor within 48 hours of limiting them, making Massachusetts the first state to regulate the practice directly. Commissioners and staff said a generic explanation such as “due to a business decision” would not be acceptable; Commissioner Paul Brodeur called that suggestion from one operator “kind of offensive.” Each further reduction requires a new notice, limits imposed in other states that follow a bettor into Massachusetts are covered, and the requirement applies retroactively to existing limits. Operators must keep the notices, which the commission’s sports wagering division planned to audit. Chair Jordan Maynard said, “We’ll know pretty quickly who’s making good faith efforts.” The rule took effect on June 1, 2026.^[2][3]

Inside the vote

The commission’s minutes of the February 26, 2026 meeting show how the rule’s details were worked out. The draft regulation, 205 CMR 238.30, required “timely” notice. Chief Deputy General Counsel Justin Stempeck recommended that this mean 48 hours, and the commission agreed by consensus. Commissioners also agreed that operators must notify customers who had been limited before the amendment, send a new notice each time a limit is set below the default, notify Massachusetts customers whose limit was first imposed in another state, and keep all limiting communications for audit. Staff expected operators’ revised internal controls to be submitted and approved by June 1, 2026.^[7]

Commissioner Nakisha Skinner warned that “specific explanation” might need more guidance, since an explanation such as “due to a business decision” would not be enough. Stempeck said the goal was for bettors to receive a “real” explanation. He said the Sports Wagering Division would write to operators making clear that a “copy-and-paste message” sent to every limited bettor would not satisfy the commission. Commissioner Eileen O’Brien said the bettor “should understand what act or omission triggered the limit.” Chair Jordan Maynard called the transparency “a net positive” for operators. Skinner also asked about requiring advance warning of the risk of being limited. Staff noted that the commission had decided in fall 2025 not to pursue that option but could bring it back. The final vote was 5–0.^[7]

The same meeting showed the commission’s approach to VIP programs. Sports Wagering Division chief Carrie Torrisi proposed following the UK Gambling Commission, which had asked operators to draft a code of conduct for VIP schemes. Massachusetts operators would propose standards covering assessment before a customer is enrolled, accountability for VIP teams, relationship management and the incentives VIP hosts offer. Gambling Research Exchange Ontario would review the proposal against the evidence, while also carrying out a separate study of VIP program structures. Torrisi said the commission would “reserve the right to make changes” to whatever the operators proposed.^[7]

The meeting also dealt with a self-exclusion case. The commission fined Bally’s Interactive (Bally Bet) $7,500 after marketing emails reached two Massachusetts patrons who were on the voluntary self-exclusion list or in cool-off periods. The discussion noted that 177 prohibited individuals across 11 jurisdictions had been contacted in all. The penalty passed 4–1. O’Brien said the fine was too low, and Skinner voted against it.^[7]

The Baltimore case

Baltimore’s lawsuit raised a different question: whether a city could police sportsbook marketing at all. The city sued under its local Consumer Protection Ordinance. It alleged that DraftKings and FanDuel’s parent, Flutter, designed their platforms “to encourage problem gambling and to induce users already exhibiting signs of problem gambling to increase their use,” and sought civil penalties of up to $1,000 per violation plus an injunction. The companies removed the case to federal court. On November 10, 2025, U.S. District Judge Stephanie Gallagher sent it back to the Circuit Court for Baltimore City under the Burford abstention doctrine.^[8]

Gallagher wrote that there is no automatic “gambling” exception to federal jurisdiction. But defining “unfair” and “deceptive” in sportsbook marketing under a new local law, never yet interpreted by any court, would risk creating “parallel federal and state oversight” of Maryland sports betting. She acknowledged the companies’ “fair point” that the city’s own, stricter rules could themselves disrupt a coherent state policy. She concluded that Maryland’s courts were “far better equipped” to resolve that tension first.^[8] The ruling did not address whether the companies had done anything wrong.^[8]

Aftermath

The rule did not ban limiting or regulate VIP programs, which the commission said it would take up separately.^[1][2] Litigation over VIP practices continued in several jurisdictions.^[5][6]

The core dilemma

A sportsbook is a business entitled to manage risk. But when it markets betting as a game of skill, restricts those who show skill, and rewards those who lose most, including some who may be addicted, the business model raises questions of fairness and exploitation. What do sportsbooks owe their customers, what should regulators require, and what responsibility do the leagues and teams whose brands sit alongside them bear?

Competing values

• Business freedom vs. consumer fairness: operators can choose whom to serve, but customers deserve honest terms.
• Profit vs. duty of care: VIP rewards boost revenue but may deepen harm.
• Transparency vs. confidentiality: the commission’s data was given on a promise of confidentiality.
• Regulation vs. prohibition: notification rules leave the underlying practice intact.

Strongest arguments

For operators’ discretion: bookmaking is risk management. Sharp bettors often exploit pricing errors or bet in coordinated ways; limiting them keeps odds competitive for everyone else. VIP programs are standard loyalty marketing, and responsible-gaming tools already exist.

For stronger rules: the data shows a systematic pattern of restricting winners and courting losers. Combined with aggressive marketing of skill, this misleads customers. Where VIP treatment targets people showing signs of addiction, operators are profiting from harm.

For the Massachusetts approach: notification and audit respect operators’ right to manage risk while giving customers the information they need and regulators the evidence to act further if needed.

Applying the frameworks

Kantian (duty)

A Kantian would ask whether operators treat customers merely as means. Advertising that betting rewards skill, then quietly limiting skilled customers, involves deception. Rewarding a customer whose behavior shows addiction uses his weakness for profit. The duty of honesty supports at least full disclosure of limiting practices.

Care ethics

A care lens focuses on the vulnerable: people with gambling problems, and the families who bear their losses. It asks what responsibilities VIP hosts and operators have when they see escalating deposits and betting frequency. A relationship built on gifts and personal attention carries obligations, not just marketing opportunities.

Justice & fairness

A justice lens asks who benefits and who bears the burdens. Behind a veil of ignorance, would you accept a market in which winners are restricted and heavy losers are rewarded? The lens also asks whether the gains of the betting boom, including league sponsorship revenue, are distributed fairly relative to who bears the costs.

Walk it through: the Simple Decision Model

1. Spot the issue. You are a league’s head of partnerships in 2026, renewing an official sportsbook deal after the Massachusetts findings and VIP lawsuits. Stakeholders include fans who bet, people with gambling problems, the operator, your teams, broadcasters and regulators. The codes in play are state gambling regulations, the league’s integrity rules and its stated values.
2. Gather facts. What do your partner’s limiting and VIP practices look like? What responsible-gaming tools does it use, and how does it handle high-risk customers? Watch for the bias of letting revenue shape what you choose to learn.
3. Test options. Options: (a) renew on current terms; (b) renew with conduct standards on limiting transparency, VIP practices and responsible gaming; (c) decline to renew. Run each through consequences, duties to fans and character.
4. Check codes and law. The practices may be legal, but are they consistent with the spirit of your league’s commitment to fans? What would regulators expect?
5. Decide and document. Record the evidence, the trade-offs and your rationale. Consult responsible-gaming experts, fan representatives and legal counsel.
6. Communicate and follow up. Disclose the standards publicly, require reporting from your partner and review compliance annually.

What’s settled and what’s contested

• Settled: the Massachusetts data findings, the February 2026 rule and its June 1 start date.
• Contested: whether limiting winners is legitimate risk management or unfair; whether VIP programs exploit problem gamblers; and the allegations in the pending lawsuits.

Why this case matters

Legal sports betting has made sportsbooks central commercial partners of sport. The Massachusetts findings put numbers to a long-suspected pattern: restrict the winners, court the losers. Whether or not the practice is lawful, it raises a basic question of fair dealing that leagues, teams and regulators can no longer treat as someone else’s business.

Key terms

Legal but unethical

Law sets out what can be punished; ethics asks what is right. Compliance is a minimum, so an action can be lawful and still wrong.

Commercialization

The process of turning sport into a product and a business enterprise, with profit pressures that can compete with principle.

Stakeholders

Everyone with something at stake in a decision: athletes, coaches, parents, officials, fans, employees, sponsors, media, communities and regulators, including the less visible ones.

Moral hazard

When someone takes more risk because others will bear the cost.

Consent and autonomy

Whether people have agreed freely and with full information, and whether their right to make their own choices is respected.

Brand as ethical promise

A brand is more than a logo: it is a promise to stakeholders about values and conduct, and it is broken when actions contradict it.

Definitions from the Ethics Cases glossary.

Discussion questions

1. Is it ethical for a sportsbook to limit customers because they win, while advertising that betting rewards knowledge and skill?
2. Should VIP programs that reward the heaviest losers be restricted or banned? What duties should VIP hosts have?
3. Massachusetts chose transparency rather than prohibition. Is that enough?
4. What responsibility do leagues and teams bear for the business practices of their official betting partners?
5. How should a regulator balance confidentiality promised to operators with the public's interest in the data?

Sources

1. Memorandum: Player Limiting Data Analysis Results and Possible Next Steps (Sept. 30, 2025 meeting materials) — Massachusetts Gaming Commission
2. If You Get Limited In Massachusetts, You'll Now Know Why — InGame
3. 205 CMR 238 (Mass. Register #1572, Apr. 24, 2026) — Commonwealth of Massachusetts
4. MA Sportsbooks Will Need to Provide Data on Limiting Bettors — SBC Americas
5. One woman's fight against VIP schemes fueling the US sports betting boom — The Guardian
6. Baltimore sues FanDuel, DraftKings over promo tactics, lack of safeguards — The Athletic
7. Meeting materials, Mar. 26, 2026, including minutes of the Feb. 26, 2026 public meeting — Massachusetts Gaming Commission
8. City of Baltimore ex rel. Thompson v. DraftKings Inc., No. SAG-25-01487, Memorandum Opinion (D. Md. Nov. 10, 2025) — U.S. District Court for the District of Maryland (GovInfo)