The Massachusetts Gaming Commission made limiting bettors one of the U.S. sports betting industry’s hottest topics in 2024 when it called a roundtable discussion on the practice to learn more and potentially intervene. Operators failed to attend the first scheduled meeting, but eventually had a discussion which inevitably led to several executive sessions.
It’s true that limiting bettors is a secretive topic; operators don’t want to give away their secrets and what they believe gives them a competitive advantage.
Matthew Ferrara, sales manager at sportsbook provider Altenar, did want to chat about limiting bettors and he told SBC Americas that there are two clear reasons why an operator would limit a bettor.
Sportsbooks limit for risk management and responsible gaming reasons
They can either limit sharps who have an edge over the operator, or those who are losing too much and are at risk of problem gambling.
“Limiting sharp bettors is part of the current landscape but there is a fine line between limiting bettors because they’re profitable and limiting others due to problem gambling,” Ferrara said. “I think sometimes operators are a little too strict on limiting sharp bettors while still letting those problem gambling bettors go.”
It’s not that Ferrara disagrees with limiting those bettors who are sharp and are consistently profitable; rather, he wants to see a fairer system that ensures those who are at risk of problem gambling are protected.
He added: “If you want to do that, fine, but you also need to limit customers on the other side who are betting too much and losing money irresponsibly.”
There is still a fine line when it comes to interventions for responsible gambling purposes, however. Ferrara posited that players could be required to set deposit and loss limits as part of the sign up process, or that some sort of affordability checks must be put in place.
But there is a well-trodden argument against these measures.
“Adding all this information to the sign up process might drive those players to the black market and to operators with no KYC processes,” Ferrara said.
“It’s a tricky balance because you also want to make sure that sportsbooks are able to stop problematic gambling and identify when a player is losing too much money. If something is going to be rolled out across all sportsbooks, then it makes sense. If it’s going to happen, it needs to happen across all the regulated businesses.”
Besides, stringent measures have been rolled out in some European markets – with adverse effects. Altenar has experience of this as a global provider with over 400 brands in its roster of partners so knows about this all too well.
Ferrara explained: “It’s killing business for a lot of operators and is pushing players into the black market. So there are examples where regulation is too strict and it hurts the market and boosts the black market. Risk Management and setting proper limits without pushing the customer elsewhere should be a competitive advantage for the operator. This is where Altenar expertise has been proven to help operators. Managing their risk to ensure profitability and still allowing customers a fair and enjoyable experience.”
Altenar is a tested and experienced risk management outfit
As mentioned, Altenar provides risk management solutions for over 400 global operators and has a whole team dedicated to identifying players who may have an edge, or any suspicious activity.
“We’re stopping those problematic customers through a number of measures, relying on automated systems with a manual overlay. Once we have limits for each individual sport and market, we may see a suspicious bet. Our team works according to the operator’s risk appetite and customer behavior. We establish limits and risk tolerance at the beginning of our partnership and our 24/7 trading/risk team works hand-in-hand with the operator as our partnership progresses.”
Complementing its risk management tools – and providing an “industry leading service” – Ferrara noted that Altenar’s reporting capabilities set the standard in the industry.
He said that the firm can pull reports on any individual customer for all their activities.
“It gives us a really in depth insight into each players’ profitability and liability,” he noted. “We’re able to go very granular with each player and for example raise the moneyline limits where they may be profitable for us but then maybe limit them on player props where they might have an edge.”
Regulatory concerns
Despite licensed sportsbooks in Massachusetts outlining that less than 1% of players are impacted by limiting, the MGC still took action. The regulator collects data on limiting, specifically: the percentage of their players that they limit (2) how many players are being limited and exhibit winning behavior and (3) how many players are being treated as VIPs and exhibit losing behavior.
But Ferrara warned that any stringent action against limiting players could have adverse and unintended consequences.
“I don’t think there is a golden answer here. Limiting bettors can lead to reputation damage because it can draw criticism from players who think the operators are being predatory or unfair. It also draws players to the black market.
“In my view, the focus of enforcement and limits should be on problem gamblers—those who are consistently losing beyond their means.”
Ferrara also believes that operators should be able to limit players as a sound business decision and as part of standard risk management. Altenar has established itself as a leader in this regard with its 10+ years of experience across multiple jurisdictions.
Rounding off his conversation with SBC Americas, Ferrara noted that AI will have an increasingly important role in risk management and identifying where players need to be limited moving forward.
“I think the future of responsible gambling and risk management will likely involve deeper integration between sportsbooks and financial data,” he said. “When users sign up, they already provide a fair amount of personal information. Expanding that—perhaps through integration with payment platforms or banking details—could offer operators more insight into a customer’s financial situation.”
He added: “From there, you could imagine an AI-driven system or formula that evaluates a player’s income bracket and determines a reasonable range of potential losses. For example, if someone falls within a certain income range, the system could set default limits that align with what they can likely afford to lose.”
As for Altenar, the firm explained that it will continue to lead in the risk management space and build out its AI and automation systems to remain at the top of the pack.
As Ferrara concluded, the firm has a significant differentiator in this product vertical: “Our approach to player limits—factoring by sport, market, and event type—is already among the most advanced in the industry. We’re investing heavily in automation. Instead of having manual traders review and adjust bets or limits case by case, we’re building tools that can make those decisions in real time.”
