VIP programs offered by online gambling companies draw federal scrutiny
Federal lawmakers concerned about gambling addiction are starting to scrutinize online betting companies’ targeting of big spenders and VIPs. Sen. Richard Blumenthal (D., Conn.) sent letters last week to eight online gambling companies, including FanDuel and DraftKings, urging them to stop using player data and other marketing tactics to target customers with gambling problems.
He noted The Wall Street Journal’s report last month profiling a psychiatrist who tried to quit online gambling but lost more than $400,000 in less than a year, egged on by perks and thousands of dollars in betting credits doled out by VIP hosts. “Gambling addiction is so pernicious because it is so prevalent and so rampantly denied as a problem," Blumenthal said in an interview. Meanwhile, Rep.
Paul Tonko (D., N.Y.) said he is working on legislation that would impose federal oversight of online sports betting in any state that has legalized the business. Blumenthal is exploring ways that sports betting companies encourage gamblers, including people with a problem, to continue playing. “The bonuses and credits, the promotions and pitches, the VIP hosts.
It has to be seen as a whole, and there may be aspects of it that should be prohibited or much more rigorously restricted," he said. Online sports-betting and casino games have exploded in the U.S. over the past six years, as more states legalized the industry.
A total of 38 states and the District of Columbia have legalized sports wagering, while six states allow online casino games such as slots or blackjack. Gambling companies rely heavily on top spenders to generate revenue. Companies deploy so-called VIP hosts who form personal relationships with the biggest spenders, frequently handing out
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