New Jersey’s chief gambling regulator, its Division of Gaming Enforcement, recently announced a welcome prohibition of a pretty despicable practice by sports books operating in the state.
Some of them have been trying to stop gamblers from cashing out their betting accounts. While their withdrawals were slowly being processed, the companies pushed them to leave the money and bet more instead. At least one reportedly offered gamblers bonus money if they’d cancel their withdrawal — an encouragement to become a gambling addict if we ever heard one.
David Rebuck, DGE director, said sports books asking customers to cancel withdrawals will face regulatory actions including civil fines.
That was too weak a response for Stop Predatory Gambling Director Les Bernal, who called the action by sports books “a naked attempt by online gambling operators to get citizens to lose more money.” He said New Jersey should also suspend their licenses for such behavior.
We have strongly urged the state to regulate sports and online gambling sufficiently to reduce their impact on gambling addiction.
Even before their arrival, 6% of New Jerseyans were gambling addicts and 15% reported gambling problems, both triple the rates for elsewhere in America.
Problem gambling increases suicide, domestic violence, bankruptcies and workplace issues, according to the Council on Compulsive Gambling of New Jersey.
A case last year raised doubts about the effectiveness of New Jersey’s oversight and regulation of its burgeoning new gambling industries. Sports book DraftKings allowed 54 gamblers to keep betting past the limits they had set. Far worse is that the state was unaware of the infraction for several months and learned from self-reporting by DraftKings.
The company was fined $5,000. That’s not even a rounding error in an industry that took in more than $6 billion in wagers last year in New Jersey.
The most immediate challenge for regulators is to rigorously monitor withdrawal requests by gamblers and the response of sports books to them.
That may give the DGE an opportunity to show that it’s ready to do more than simply warn about attempts to reverse withdrawals by gamblers. By making an example of one or more offenders with substantial fines, the state would show it has a bite to back up its bark. Then if there are repeat offenders, license suspensions would be the appropriate regulatory response.
New Jersey is considered to have a strong gambling regulatory structure and its sports and online gambling oversight has served as a model for other states that have followed it into those markets.
Banishing this sort of attempt by sports books to manipulate gamblers to their detriment would benefit the people of this state and others across the nation.