Gaming America's Ricky Gray Jr.takes a look at self-regulation and self-deposits in a future where operators are increasingly worried about problem gambling.

Many mobile sportsbooks are hoping that self-regulation is in their future. However, at the moment, it doesn’tseem as if it will come to fruition. Why? Frankly, the government has deemed that self-regulated sportsbooks could skirt the normal protocol. The questionis whether or not sports betting appsshould be allowed to be self-regulated.

Another area concerning bettors and sports betting apps are self-deposits. Self-deposits allow bettors to make deposits and withdrawals from the comfort of their own homes. However, not every state isallowing these functions. In certain areas, you’ll actually need to go to a physical location to deposit or withdraw money.

Both self-regulation and self-depositsgo hand in hand, which is the focus of this article. What does itmean for sports betting apps to beself-regulated and how could it help or hurtthe industry. Along with that, is it possible that self=deposits could promote problem gambling. If so, what is the foreseeable future of self-deposits.

What is “self-regulation” and why does it matter?

Self-regulation has to do with individual sports betting apps keeping government regulations out of the mix. However, it does pose a question that has to do withresponsible gaming and what regulations will be put in place.

Plenty of countries are doing whatthey can to ensure that “problem gambling”doesn’t continue to grow. From advertisingrestrictions to disallowing credit card usefor gambling, there are a plethora of tools being used.

The question for sports betting apps surroundswhat would they do to ensure problem gambling doesn’t continue to grow. For example, during the first month of sports betting and online casinos in Michigan, calls to the state’s gambling helpline soared 1,000% year over year.

Considering that more states arelegalizing sports betting and mobile sports betting,there is likely to be more problems with gambling. However, there are steps that sports betting apps can take to ensure it doesn’t get too out of control. However, they’ll have to lead the way.

Sportsbook and sports betting app technology and how it can help

As more sportsbooks and sports betting apps develop new technology, it canbe used in self-regulation. Christopher Snowden recently wrote a paper for the London-based Institute of Economic Affairs regarding this.

Snowden stated: “Not every company uses their technology to prevent harm in the same way, but they could. Best practice could be made standard.There is currentlya mix of regulation, self-regulation,guidance, and private initiatives aimed at reducing gambling harm that could be consolidated, formalized, and madelegally binding.”

Although Snowden is referring tothe UK, the same thing could be saidfor the United States. Keith Whyte of theNational Council for Problem Gambling (NCPG) was quoted in 2021 stating: "If the industry says, 'Hey, we don’t want to be over-regulated because we’ve got all these great behavioral data tools toaddress responsible gambling,' thenthey’re going to have to own that.”

With the technology available,self-regulation shouldn’t be much ofa problem for sports betting apps.The question is, what are they doing nowto take steps in the right direction?

Protecting yourself while betting online or through mobile sportsbooks is a top priority. However, sports betting appsneed to have functions in place to prevent another surge of problem gambling.

For example, the NCPG had the Safer Sports Betting Initiative (SSBI). The goal was to develop innovative responsible gamblingpartnerships and comprehensive problemgambling programs. Individual sportsbetting programs could use the samemetric used by the NCPG to develop their own programs.

These were a few of the key indicators of problem sports betting listed in the SSBI program: mobile wagering; allowing for instantaneous and immediate gambling, which has been shown to be associated withincreased gambling problems; young adults, who already have high rates of gambling and will be increasingly exposed to advertising and promotions for sports betting. Problem gambling prevention and treatment services, the NCPG found, are insufficient in most states and non-existent in several.

As always, part of the responsibility falls on the gambler and their tendencies. However, most problem gamblers don’t recognize they have a problem until it’s too late. This is where sports betting apps canstep in and use these indicators as a guide for their own programs.

Sports betting ads could be targeted in the US

One way to help their case for self-regulation in the US is by limiting ads that promote sports betting. In the UK,ads are banned from running during the broadcast of games, in what’s called the “whistle-to-whistle”ban.

In Italy, sportsbooks are banned fromadvertising on players’ jerseys or as partof a stadium’s name. Italy also restrictsbroadcast ads for any form of gambling between 1-5 am.

According to the Associated Press, this is something that one NFL organization, in particular, doesn’t want. Jeff Fernandezwants “to make sure we don’thave to go to a whistle-to-whistle ban like what happens in the UK.” Fernandez is the New York Jets VP of Business Development.

Joe Asher cautioned against “a backlashon the advertising going on today and the excessive amount of it going on,” adding that “it’s not something that lends itself to self-regulation.” Asher is the president of sports gambling tech company IGT. Asher also added that, “it’s not something that lends itself to self-regulation.”

During this conference, others voicedthat advertising is needed to attract newcustomers. For instance, PointsBet Chief Marketing Officer Kyle Christensen said: “We have taken a focused view by listening to what our bettors want and reaching them where they are.”

Christensen continued: “We have a philosophy not to spend irrationally but be aggressive and disciplined. It hasservedus well, made our users happy, and willcontinue to be our perspective as we look at future advertising budgets.”

President of the American Gaming Association Bill Miller called these ads “an unsustainable arms race.” He also asked the question,“Is it too much? Is it an unsustainable thing?”

To avoid what happened in the UK, companies need to avoid over-advertising.It’s definitely a way to acquire new customers, but it doesn’t help promote self-regulation. In fact, you could argue that it forces the US government to take more action.

How sites like DraftKingsand FanDuel combatproblem gambling

Limiting ads during broadcasts and preventing gambling at certain hours isdefinitely a way to help. However, thereare other ways to promote self-regulationby providing resources of your own.

Both DraftKings and FanDuel have areas of their sites dedicated to responsible gaming. They also have links containing ways to gamble safely and signs that you might have a problem. DraftKings also has “self-exclusion” which offers all users the ability to self-exclude on all DraftKings products.

FanDuel has a similar operation but focuses on state-wide exclusion.  However,it looks as if the state-wide exclusionis onlyavailable in Pennsylvania. Connecticut residents can exclude themselvesfromFanDuel through the Department of Consumer Protection’s website.

Something that other mobile sports betting apps can take from FanDuel is the “Timeout” feature. All users need to do is enter the amount of time they need away from the app and they’ll be logged out until the time has passed.

Betblocker is a tool that was designed to help with problem gambling. The tool is designed to help users control their urge to bet by blocking access to nearly 15,000 gaming websites. Similar to the Timeout feature offered by FanDuel, Betblocker can be set for an amount of time and will restrict access for the duration. 

To be fair, most mobile sportsbooks have an area designated for responsible gamingtools. However, these are mostly all basedon the user admitting that they have aproblem or need help. To push for self-regulation, these companies need to usetheir own technology to identify problem gamblers and restrict access.

Deposits are a popular topic among companies looking for self-regulation. However, self-deposits directly from bettors could pose an issue.

Self-deposits and whetherthey’ll help or hurtself-regulation

This is an area where things begin to get a little muddy because of what self-depositscan mean. In some places such as LasVegas, you have to go out of your way toset up self-deposits and ACH transfers.Some sports betting apps don’t evensupport the function. However, there’s areason for this and again it has to do with responsible gaming.

If self-deposits were allowed nationwide, we could see an uptick in problem gambling.Bettors would have access to instant with drawals from their own personal accounts, which could be trouble.

In an article for Wired, the story of GregWeber proved to be an eerie warning ofself-deposits. Fascinated by the recentlegalization of sports betting in 2018, Weberbegan betting heavily from his phone. Over the course of two years, Weber hadexhausted his sources of cash, no longerable to open loans or credit cards. Weber stated: “My entire life was kind of in a hectic state.”

This is just one of the problems that can arise from mobile self-deposits, which is why some mobile sportsbooks don’t offerit. There are some upsides, such as being able to instantly withdraw yourwinnings. Offshore sportsbooks don’t offer this feature which is why business has boomed stateside.

 The current state of self-deposits in the US

Here’s where things continue to get more interesting. In May of 2022 Nuvei partnered with Hard Rock Digital to offer payments for its Hard Rock Sportsbook mobile app. The app is currently live for players in Arizona and Virginia.

What Nuvei will offer players is the ability to instantly deposit funds to and from their gaming wallet to their bank account using Nuvei’s  Instant  Bank Transfer technology. This process operates through Nuvei’s integration with The ClearingHouse’s real-time payments (RTP) network.

Executive Managing Director and President of Hard Rock Digital, Matt Primeaux, said: “Hard Rock Sportsbook isbuilding the best product in the marketwith an engaging, entertaining andfrictionless experience for the sportsbetting player, and being able to provideinstant access to funds is fundamental.”

In another move, earlier this month, Nuvei announced a partnership with Fifth Third Bank, National Association to add real-time deposits for sports betting and iGaming inthe US. This partnership will allow merchantsto receive instant real-time deposits.

The difference between this and ACH transfers is that these real-time depositsuse The Clearing House’s RTP network and move more quickly. The RTP network isaccessible to financial institutions that hold75% of US demand deposit accounts orDDAs. The network currently reaches 61% of US DDAs.As we can see, instant deposits andwithdrawals are already here, whetherwe like it or not. The only question is howit will affect self-regulation going forward. 

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