According to The Guardian, the main gambling firms behind the U.S.’s sports betting boom are being criticised for allegedly encouraging gamblers to chase loses through VIP programs which reward high spenders with betting credits, bonuses, gifts and even trips. Customers selected for the VIP programs are assigned a host and are often rewarded with credits and merchandise if they keep using a certain operator’s platform.
Americans betted approximately $150bn last year – a 24% rise from the previous year. Earlier this month, the American Gaming Association (AGA) estimated that $1.39bn worth of legal bets would be placed on the Super Bowl.
The National Council on Problem Gambling estimates that about 2.5 million adults in the U.S. meet the criteria for a severe gambling problem, and that an additional 5-8 million face mild or moderate gambling problems.
The main gambling firms behind the boom told a prominent U.S. senator in 2024 that their VIP programs were “not designed” to cause betting addictions, but many distrust these gambling giants. For example, job adverts published by one of the gambling firms indicated that VIP hosts are expected to encourage gamblers. A host at DraftKings is expected to: “exceed engagement and service level performance targets” and “assist in reactivation efforts to re-engage inactive users.” Therefore, problem gambling advocates are becoming increasingly sceptical about the firms’ motives. DraftKings’ job adverts have since been updated after The Guardian drew attention to them, suggesting wrongdoing.
Cait Huble of the National Council on Problem Gambling expressed that VIP hosts appear: “financially motivated to keep people who are kind of considered high value engaged,” which “creates a conflict with identifying, addressing responsible gambling behaviours and problem gambling.”
She added: “The retention tactics that we’re seeing run potentially a little counter to” operators’ claims that their VIP programs are not designed to get frequent bettors to bet more. It definitely seems like there’s some encouragement around chasing losses, which is a huge factor of problematic play.”
Several lawmakers on Capitol Hill are similarly concerned. Richard Blumenthal, the Democratic senator of Connecticut, voiced: “Sports betting companies make a paltry pretence of stopping gambling addiction. They’re failing to address the national gambling addiction crisis, because their profits take priority over people.”
The lawmakers expressed their fears over what they described as “coordinated behaviour” between DraftKings and FanDuel. Together, the two firms control the lion’s share of the market, a dominance that, according to the senators, could be blocking new players, reducing competitiveness, and ultimately harming consumers.
Trump’s presidency could spark a new era for America’s gambling industry. In the 1980s, Trump used to be a dominant force in Atlantic City’s casino empire. However, his entire casino empire eventually crumbled into bankruptcy. Though, Trump later stated: “I took an incredible amount of money out of the city.”
Blumenthal also stated that current regulations are “falling woefully short.” He proposed a federal crackdown due to the severity of the issue. In March 2024, he sent a plethora of letters to the gambling firms demanding information on their marketing tactics, self-exclusion options and VIP programs.
Lisa D’Alessandro, whose estranged husband bet more than 440% of his salary in 2023 as his gambling addiction spiralled, told The Guardian that these gambling giants are trying “to make their players feel like they’ve won something,” especially through VIP programs.
D’Alessandro’s attorney, Matthew Litt, is representing several people who are suing gambling firms for allegedly exploiting their customers’ gambling addictions through VIP programs. Litt described the VIP host-player relationship as “quasi-intimate.” One of Litt’s clients claimed they were contacted by a VIP host up to 100 times a day.
Litt expressed: “If you’re in the throes of a gambling addiction, in most cases, nobody knows what you’re doing except your VIP host. You’re in one of the darkest times in your life, and the most honest relationship you have is with this VIP host.” This can lead to player exploitation.
Brianne Doura-Schawohl, a legislative director on National Council on Problem Gambling, disagrees with the gambling giants, such as BetMGM, when they argue that their VIP programs are similar to loyalty programs from coffee shops, for example. Gambling operators are “not like Starbucks,” she voiced. The products that they offer “are addictive, they come with risk, and they result in harm for a percentage of the population.”
FanDuel’s program offers “an enhanced level of customer service to a small cohort of customers,” it told Blumenthal, but a UK report found that while VIP users made up small percentages of the customer base, they accounted for a large percentage – in one case, 83% – of the deposits.
Additionally, Doura-Schawohl voiced that she was aware of a number of companies that offer bonuses to their VIP hosts that are linked to how much and how often their customers gamble.
In response to this, FanDuel expressed that its VIP hosts’ compensation “is not impacted in any regard by how much individual customers wager” and is “only impacted” by adherence to responsible gambling targets. However, Doura-Schawohl said that the responses from the betting companies should be “taken with a grain of salt.”
It was also reported that gamblers are typically offered VIP status after losing large amounts of money with one company, which has an interest in retaining them as a customer rather than see them bet with a rival instead, another reason why problem gambling advocates criticise these gambling giants and highlight how exploitative they are. However, Joe Maloney from the American Gaming Association (AGA) argues that the VIP programs prevent customers switching to a “competitor in the illegal market.”
This issue is also impacting the integrity of sport in different ways. As reported by ESPN, Jontay Porter, a former NBA player with a gambling debt, pleaded guilty to manipulating his performance for profit.
“In order to get out from under large gambling debts accumulated over time, I agreed with my co-conspirators to withdraw myself from certain professional basketball games on the basis of reported illness or injury so that my co-conspirators and I could bet on and profit from successful bets on my expected performance, including bets made on my unders,” Porter told Judge James R. Cho.
Porter, now 25, is scheduled to be sentenced on May 20. He is facing a maximum prison sentence of 20 years, but prosecutors estimate a 3.5- to four-year term.
Athletes at the professional and collegiate level have also been targeted with death threats from losing bettors.
Recent research suggests that legalised betting is fuelling a storm of financial ruin, with soaring debt levels, rising bankruptcy rates, and, in some cases, an increase in domestic violence, anger erupting in the wake of catastrophic losses.
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