Winners Capped at 49 Cents as Betting Firms Face Scrutiny

Sports betting platforms are under fire for a dual strategy that rewards losing customers with luxury perks while capping the wagers of successful bettors to near-zero amounts. This practice, known as limiting, creates a sharp divide in how major gambling companies treat their users. The industry faces increased pressure from state regulators and federal lawmakers to explain the disparity.

First, the platforms use extravagant incentives to keep losing gamblers engaged. A group of U.S. lawmakers wrote to major gambling sites last week to express concern over these tactics. The letter noted that perks such as Super Bowl tickets and celebrity video access distract bettors from their financial losses. Brianne Doura-Schawohl, director for the Campaign for Fairer Gambling, argued that the pervasive advertising promises wins, yet the house ensures it always does.

Second, successful bettors face strict restrictions on their account limits. In a 2023 filing with the U.S. Securities and Exchange Commission, DraftKings explained that it restricts betting limits based on individual customer profiles and risk levels. Mike Manning, a professional bettor in Massachusetts, described this experience. He was limited to $25 per bet on DraftKings and as low as $5 on BetMGM, despite previously wagering up to $5,000 per game.

Third, state regulators have begun investigating these limits. The Massachusetts Gaming Commission found in 2024 that winning gamblers have their betting limits decreased while losing gamblers have theirs increased. The commission required companies to provide data on how they limit bettors. Gadoon Kyrollos, another professional bettor, described the system as a ban or bankrupt model. Manning called the disparity predatory, stating that the companies exploit losing bettors while showing successful ones the door.

The number of accounts affected remains small relative to the total user base. The Massachusetts Gaming Commission reported that 0.64% of betting accounts in the state had been restricted. A DraftKings spokesperson said the company applies customer-specific wagering limits to less than 0.15% of accounts. The company stated these decisions are based on customer behaviors, irrespective of whether a customer is winning or losing. Matthew Litt, a New Jersey attorney, noted the practice is legal as long as companies do not discriminate based on protected characteristics.

The context of these limits becomes clear when examining specific user experiences. Michael Trevithick of Ann Arbor, Michigan, shared a betting ticket showing the maximum wager allowed on the NBA Cup was 49 cents. DraftKings told Manning it took action for internal risk management purposes. FanDuel wrote to Manning that he was restricted due to an assessment of his overall wagering patterns and their impact on the company's long-term risk position.

The treatment of losing bettors often involves dedicated VIP hosts. Chris Swett, a former South Carolina attorney, pleaded guilty to four counts of wire fraud and four counts of money laundering in federal court. He stole about $2 million from his law firm to fund his gambling addiction on FanDuel. Swett said a FanDuel employee paired him with a VIP host after he spent $25,000 a month. The host provided free tickets and complimentary entries to keep him betting.

Swett wagered $11 million over a two-year span and lost about $1 million. He faced a maximum sentence of 20 years in federal prison for defrauding his law firm and its clients with fake invoices. In a 2020 email, Swett told his host he was tapped out for the month, and the host offered a 4% bonus on new bets two days later. Swett said the system seemed designed to keep him playing, despite his personal responsibility for his actions.