New York to target “predatory” sports betting bonuses with new legislation

Bonuses issued to players by New York-licensed sportsbook operators could soon be subject to potentially strict standards as a new bill targeting the practice works its way through the Empire State’s Senate.

Proposed by 40^th District Senator Peter Harckham, Senate bill 9605 compels the New York State Gaming Commission (NYSGC) to implement rules and regulations concerning “predatory” sportsbook bonuses in mobile sports betting.

The bill defines this as including deposit matching, risk free betting, free money, free bets, site credits, and profit boosts.

Further details on the types of regulations which the industry could potentially be subjected to have not been provided in the bill’s language, however the bill’s justification cites a hugely controversial recent article by the New York Times as a motivating factor in the decision to file.

In a number of pieces published over recent weeks, the New York Times has taken aim at the US sports betting industry, attacking its lobbying practices, marketing methods, and relationships with state colleges, legislatures, and regulators alike.

The slew of articles has drawn criticism from the industry’s trade body, the American Gaming Association (AGA), which recently slammed what it called “mischaracterizations” in the Times reporting over tactics used by the sector.

However, those reports appear to have found their mark in the Empire State, with Harckham attacking common practices used to “lure in” new customers.

“New gamblers are often drawn in with marketing campaigns citing ‘free bets’ or even ‘free money.’ Sportsbooks often give away free bets, not just upon signing up to the site, but sometimes as a trigger response as a reward for betting many times or as an incentive to return,” Harckham said in the bill’s justifications.

“Risk-free” betting gives customers refunds following a losing bet, only to be used towards a new wager. The mobile sports betting industry is utilizing targeted advertising that is personally tailored to lure in new customers from right within their homes.

“This means that by following legal sports betting in New York State, multitudes of people who were not formerly presented with these predatory practices will fall susceptible to gambling addiction that could have otherwise been avoided,” the Senator added.

Expanding on his stance, Harkham cited limitations on free bet advertising in other jurisdictions such as the UK, which has strict rules, and Canada, where such practices are expressly prohibited. He also slammed regulators, suggesting they had dropped the ball with enforcement.

“Across the country, the enforcement of mobile sports betting rules and regulations has been haphazard, with punishments often light or non-existent, according to a NY Times survey of dozens of state gambling regulators,” Harckham wrote.

“In New York, gambling companies accepted thousands of bets on lower-division football and basketball games, even though they were supposed to be off limits.

“Industry officials have cited their voluntary support for anti-addiction resources as proof that they can be trusted to operate without stricter government rules, but more safeguards must be put in place as this reporting has illustrated these predatory practices are triggering a spike in gambling addiction,” the Senator concluded.

Following the launch of mobile sports betting on January 8, New York State punters were subject to a huge marketing drive by operators looking to gain quick market share in the Empire State, with thousands of dollars’ worth of free bets and bonuses offered for customer signups.

However, as the effects of the state’s 51% tax rate on sportsbook revenue have come to be felt by the licensed market, and its profitability from these tactics has waned, it has led to a more measured approach by operators.