ANDREW TOPPS: We have a question from the audience. Do the bills on sports betting have limits on how much individuals can bet, and what sort of safeguards do the bills have for the bettors?
DIRECTOR MCINTYRE: In our state, there's not a limit on the amount. We have limits in terms of risk liability per wager but we regularly take six-figure wagers—meaning over $100,000 per bet—quite frequently. And our retail sportsbooks, more than half of our revenue comes from bets that are $1,000 or more. We obviously go through all of the anti-money laundering checks. We comply with the Federal law related to financial transactions, suspicious activity reports. We have surveillance on every one of the wagers, but you can bet a lot of money. There are a lot of people who bet sports who are quite wealthy.
CATHY JUDD-STEIN: The caller might be interested in those bettors that place more modest bets, but they place too many of them and they get into trouble. I think I'm sure that all of the panelists could also comment on this. But there are more and more technological tools that can be put on your mobile device, and also in-person betting to help. As I mentioned earlier, the bettor needs to make choices that are good for them to keep it fun and not harmful. And those tools are kind of cool and everybody can help me out here. But they can set their own budget and get pop-up messages as to where they are in their budget, so that they can plan accordingly and not find themselves in trouble.
ANDREW TOPPS: Absolutely, Professor Holden, same question to you. In Oklahoma, what safeguards are there for the bettors?
JOHN HOLDEN: Sure, so we have casino gambling. We certainly have responsible gambling programs. In regard to sports betting some of these limits that I think the question references are things that are being talked about in the U.K. And speaking to people from the U.K., they tend to see themselves as maybe a decade ahead of the U.S. market in terms of sports betting. And the pandemic really created a major gambling addiction problem in the U.K. Particularly amongst young men, and it reached such epidemic proportions that the U.K. gambling commission, as well as their parliament, have taken an interest in regulating gambling. So, these are some of the checks they are talking about. They are talking about imposing limits on the amount that you can deposit per month or per week. They're talking about limiting the frequency that you can bet and imposing these technological checks along the way. And certainly, we have the technology to impose these checks.
I think that the sooner companies proactively begin to impose problem gambling checks along the way the better. I don't think any company wants the regulator to tell them what to do when they can self-regulate and avoid that headache. But this type of conversation is already happening in the U.K. and the regulators there are looking at taking a very serious crackdown and some of the limits that they're talking about being placed on wagers, I mean there will be no more six-figure bets. They're talking about four-figure bets a month as a limit. So, the U.S. should probably take note of what's happening and especially if the U.K. commentators are correct that they're ten years ahead of what's happening here.
ANDREW TOPPS: Oh, very interesting … Professor McCann.
MICHAEL MCCANN: When you hear about what Professor Holden just talked about, it'll be interesting to see if those measures work, or if the bettors use offshore sites and other illegal options to bet their money. If that's the case some of these measures may not be as effective as they are intended to be.
JOHN HOLDEN: Exactly, and that's the same fear we have with excluding college games or in-state colleges. You aren't taking away those bets, those bets are going somewhere. Simply stopping people from betting on one site isn't treatment for gambling addiction. So, I think you're absolutely right. It's a first step but if there's not more behind it that they're likely to not be a sustained solution.
ANDREW TOPPS: And we have another question from the audience. How are these current and new regimes preventing spoofing of locations for mobile bets? Director McIntyre, I'll go to you first.
DIRECTOR MCINTYRE: We have significant technology on the back end that actually looks for that in real time through our partnership with DraftKings, this is one of their main functions and main strengths. The difficulty is in-game event wagering when you can wager on who scores the next goal, or who makes the next basket. That data doesn't get transported to the central system for, say, 10 seconds, and if the person at the event is able to wager at the event and watch it live, it's what we call fast fingering which means you've got a wager on who scored the next goal, Liverpool versus Manchester United, for example, and you place a large wager, and it is correct. So, every month, we do a risk management meeting where we go over all the individuals who were doing all of the activity that looks suspicious, or you know, anomalous and discuss each individual person like that. One of the strange things about sports betting is that the universe of people it's not that big.
It's amazing how last year we sold a Powerball ticket to about 700,000 people in a population of 1,000,00 adults. At it's high during football season you're talking about 35 to 40,000 betters in the system, and that includes folks from Massachusetts, Vermont, and Maine. So, it's not as hard as you think to sort of manage individual directly. I'll give you an example, even the algorithm on our app, if you're driving towards the Mass border, and the system doesn't think you're going to finish your wager in time before you get to the Mass border, that wager times out. It's literally reading your speed of the vehicle and saying you're gonna finish this bet in Massachusetts, which is illegal … you're canceled.
ANDREW TOPPS: We have another question from our audience. Regarding placing a cap on the amount of single bets, how do you all feel about that being maybe paternalistic and anti-market in nature? Chair Judd-Stein, I know you're big on responsibility and you know Massachusetts released its white paper on gambling responsibility. How do you feel about that? That counter argument that hey if I want to bet the farm, why should you prevent me from betting the farm?
CATHY JUDD-STEIN: It may seem counterintuitive, and I am not the expert that Mark Vander Linden, our director of research and responsible gaming is, on what Professor Holden who explained what Great Britain is thinking, and whether it would be direct prohibition, or Mr. McCann, who explained that they may not work. I think that there's a lot of arguments where it really needs to be a choice, but there can be guided choice. And that's why we do have the voluntary self-exclusion program. Where we work carefully, using folks who are trained to help players make a decision to exclude themselves, but not forever. Because it's important for them to be able to decide to renew or come back. Nobody gets to just exclude forever, because, based on research, it's not really a sustainable choice and it might in fact backfire.
But I don't think providing help is paternalistic when you're helping folks to have fun and make informed decisions. And if you go to the three casinos in Massachusetts, you'll see a very big commitment, and I'm very proud of the licensees because they also work very collaboratively on this to make sure that they're offering lots of opportunities to make those kinds of choices, and we use both by statute. We have on-site game sense advisors who help the casino players make informed choices about how the slot machines work, and they do it in a fun way. They do it in an informed way. They intervene when they see a patron in trouble. Our second casino has also put in place PlayMyWay, which is an opportunity for every patron to set a balanced budget through the slot machines, and that will actually be something that will be deployed at Encore Boston Harbor.
ANDREW TOPPS: Director McIntyre, the same question to you. I know it's live free or die, and as you said you're taking six figure bets. Is there an actual cap on what one can wager in New Hampshire?
DIRECTOR MCINTYRE: No. So, in my past life I was actually an organized crime prosecutor. So, I prosecuted a lot of bookies, a lot of them, for a long time they were the ATM machine of organized crime. They had to pay a monthly rent; it was called to the organized crime figures of Boston to do business.
And so, when we got the chance to build it ourselves, I wanted to make sure it was a product that exactly mirrored the street product. I wanted to make sure that our products were better but had the same odds and offerings that we weren't changing the lines to maximize our profit. We were offering a competitive product that has only a few things different. For example, we don't take credit. We won't take credit cards. We were asked to, the answer is no. But I've reached out to my former colleagues in law enforcement, and they have suggested we have destroyed the illegal bookmaking market in Northern Massachusetts and New Hampshire, for that reason. Because it was the exact same thing, but it was a better product, you knew you were getting honest lines. You knew you were getting paid.
As a prosecutor I once got a phone call because an offshore bookmaker didn't pay off a wager, and he wanted me to take out indictment against this bookmaker for larceny and after reading him his Miranda rights, I suggested to him that once you work outside the bounds of the law, you lose the protection of it. That's an important principle of law once you're outside the bounds of law you lose the protection of the law. And so, with us you actually have the protection of the law. We have a consumer protection, aspect you can come and complain to me if you don't like my answer, you could call the governor's office and complain, and so I think with all of those safeguards it's worked wonderfully, it really has, and I will tell you my state very much is a personal responsibility state.
All of our technology has self-exclusion, and if a person wants to, that's up to them. And hundreds of people have gone on our apps, and said I'm excluded, I want to exclude myself and so we leave it up to the person to decide the level of betting they want to do. They can budget their spends through the apps. They can say, I want to bet no more than $500 a month. But it's very much left, I think Chair Judd-Stein suggested this, and it's a personal choice and that's really when it's most effective.
ANDREW TOPPS: And Director McIntyre has a great saying in class, he used to prosecute bookies, and now he's become one. Because like I said in the opening, he also teaches in the UNH law and yeah, I just cracked up when I first heard that.
DIRECTOR MCINTYRE: I told myself all the time, this Chief Bookmaking Officer of the state. You know I am what I am, and I openly admit it.
ANDREW TOPPS: Professor Wallach, Professor Holden, Professor McCann, “what kinds of counterpoints are there to the right to make a living right?” There's an argument for, I have a constitutional right to make a living, I'm a gambler, I'm a sports bettor. “Are these states violating my rights by limiting what I can wager if this is my chosen profession, my chosen way to make a living?”
DANIEL WALLACH: If you bet too much, too successfully, it may not be the state that limits you. There are bookmakers in other states that will limit your right to bet or may not even take your bets if you're too successful, and that also raises sort of the inverse of that from a consumer protection standpoint, and a fair trade practices standpoint.
ANDREW TOPPS: Professor Holden, the same question to you.
JOHN HOLDEN: I think if you spend a few minutes on gambling, Twitter, this is probably the number one complaint of anyone who is a professional bettor, or thinks they're a professional bettor, that they are not able to wager enough money to make a living at it. I view this as an entertainment product, and I think that these companies have a responsibility to limit their risk and this is within their rights. In much the same way that a casino has the right to exclude someone. But I see why they complain, and certainly when they see these advertisements, and you know it's a bet $3,000 get $3,000, and then all of a sudden, they're being limited to placing $5 bets. I can understand how that's frustrating.
MICHAEL MCCANN: And I would just like to add this gets into the murky area of private public right, because the state is conferring a license, and the licensee is then restricting how the license is being used. Does that create a property question about one's liberty? I mean I don't know. Probably not I think, as John noted, these are private companies, but the license part. I think, at least, gives some ground to move.
ANDREW TOPPS: Very interesting, we're going to move next into some data privacy questions. Professor Gale, in terms of data privacy around these issues, especially with a lot of the mobile apps, can you talk about what data is being collected and how is that data being used?
KRISTY GALE: Predominantly, what we're focus on is athlete data. There is also a lot of data called on bettors and sports fans. And so, at some point all of that will intersect. There are different laws that govern the use of that data collection and use of that data, whether it's sports fan at a game or a sports bettor or an athlete. In the U.S., the privacy rights are ever-evolving. Some states have privacy acts, as you're aware of, some have biometric data privacy acts, which is a little bit different. Student's here might be most familiar with the California Privacy Act, which governs generally, really large companies that are collecting a lot of data on users like you and I on social media apps or other platforms—where we are choosing to engage in those platforms—and so there's not a direct overlap with sports betting per se.
But what we really look at is athlete data, specifically biometric and tracking data. At this point, mostly collected through wearable technology that has been introduced into sports around 2012/2013. It might seem like a brand-new topic, but it's something that's been my focus, and what I do since 2014/2015. And so, where I am predominantly focused at this point is on the athlete data because that is what is utilized to fuel fan engagement content. And at this point most importantly in sports waging.
ANDREW TOPPS: Professor Wallach going into the biometric data it's a big burgeoning issue.
DANIEL WALLACH: It's not only a byproduct of collective bargaining agreements and negotiations between the players and league management. There are bills that actually address the use of personal biometric athlete data for purposes of sports wagering. Senator Lesser's bill would prohibit gaming licensees from purchasing or otherwise using any personal biometric data of an athlete for purposes of sports wagering or aiding a patron in placing a sports wager. There's a Missouri bill that was sponsored by Senator Denny Hoskins that would require the licensed operators to enter into consent agreements with the labor representatives of the different professional leagues.
So, when I go around the state houses, I see this lobbyist for the National Football League Players Association (NFLPA) by the name of Joseph Briggs. He goes to state houses all over the country and makes sure that player protections are enshrined in some of the state legislation. And the issue biometric data and ensuring that this type of information isn't utilized by bookmakers without athlete consent. That's one of the core issues that had been advanced by the bargaining representatives of professional leagues players associations. And you're beginning to see language in a host of bills around the country, and that's definitely in one of the lead senate bills in the commonwealth of Massachusetts. So that bears watching as a hot issue and an area where players are lobbying the state legislative officials to enshrine these types of protections within their own statutes.
ANDREW TOPPS: Professor McCann, I'm going to put you on the sport real quick. I know that the collective bargaining is something you follow closely. Do you see this issue proliferating throughout the other leagues? And what's kind of the tension between the players associations and the leagues?
MICHAEL MCCANN: I think for the reasons that the panelists just noted, the tensions are how the data is shared, what is allowable in terms of tracking, and how will it be used by the leagues in terms of employment? That's always a concern when these athletes have very short windows of life. This comes up more generally with issues of biometric tracing in terms of player health. So yeah, the unions have a big stake in this to ensure that their players are treated correctly and that the leagues are using the data in a responsible way.
I would add that at the end of the day both sides want to make money and it all goes to a pool of revenue that gets distributed as this collective bargaining agreement struck. So, in the NBA there's basketball related income that gets distributed pretty much 50/50. So, they both have sort of an equal stake in seeing revenue grow. But I think for the reasons noted, there are privacy concerns.
DANIEL WALLACH: And there's also the issue of due process because the players want to ensure that they receive fairness in league investigations if there are any allegations of match fixing, point shaving, and the collection of this kind of private data could potentially be used in an evidentiary capacity to make a case against the players. So, players have economic as well as due process concerns about how this data is collected and whether they have a right to consent to its use.
ANDREW TOPPS: Professor Gale, I want to go back to you. We have a question from the audience. You talked about professional athlete data, but what about collegiate athlete data? John Nucci says there was previously an issue where Nike signed with Michigan athletics to wear wearables and there's uncertainty as to how Nike can use that data. In states where college betting is permitted, what are the athletes protection? They are not in CBA, whether they are employees or not, that's still an issue up for debate. But Professor Gale, what protections are there for college athletes?
KRISTY GALE: Right now, it's very limited. That deal with Michigan football that was mentioned, that was done I think in maybe 2017 or 2018, I can't quite remember but that was, I think, the first of its kind, and it was not clear what types of data would be collected. It was known that data or the sensor technology that collects the data would be in shoulder pads and other wearable tech for the player. So presumably they would only be collecting during a game, maybe during practice.
But as you mentioned, there's not any collective bargaining for college athletes. The progression that I've seen over the last several years with wearable technology, which is really going to be the main provider of this data for athletes, it's going to be wearable technology that utilizes sensors. And back in 2012 to 2014, wearable companies were trying to partner with professional sports leagues to kind of test whether they could collect data that was viable. And then from there they kept kind of testing that technology, implementing more technology.
There were more players in the space, more companies doing wearable tech. And then from I think 2014 to 2016, it was very quiet and the leagues were not addressing it and they moved their position from there's no problem, we own the sport, we own the athlete, we own the games. So, there's no problem here. That it's all covered by contract and we don't have a consent issue because it's all under contract. Which is not true and people really could not have foreseen how much activity there has been from a legislative perspective in the privacy space over the last several years.
ANDREW TOPPS: Last question with data and Professor Holden I know you've written extensively on this. The first amendment versus the right to privacy. You know we are talking about athlete data, what they have the right too. But at the same time, if I go to the ballpark and I have my radar gun, can I publish whoever is pitching there. Can I publish that and not be in violation of their publicity rights? Professor Holden, where does this stand now? And where is that issue going to go?
JOHN HOLDEN: Sure, back in 2018, 2019, sports leagues via their lobbyists, came up with this very creative term, integrity fees, which was something that they were going to ask the states to pay them for the privilege of offering betting on baseball or National Basketball Association (NBA) games. Despite the fact that we have various federal court decisions saying that the leagues don't own the results of their games that this is public information. The box scores are printed in every newspaper around the country. You don't need to pay Major League Baseball (MLB) to publish the box score.
So that fiction that they created went nowhere. But following that, they came up with a pivot and what they did was they asked, began asking for mandates for the use of official data or data that was sanctioned by the leagues originating from them to be used. Initially they wanted it to be used for all wagers and then that quickly proved untenable of the same reasons. And they transitioned to being used for in-play wagers. And certainly, the sports leagues all collect some data that you or I, we can't replicate.
I can't tell you watching, judge a home run, how far it went. MLB stacked cast can give us that information right away. Is that protected until they publish it? Probably. But the idea that they can own that he hit a home run and that I can't tweet that out. That type of information is generally regarded as protected by the First Amendment. Now, to overcome that, we've had various state legislatures around the country pass these official data mandates. What that is, is a requirement that sports books buy data through a sanctioned provider that originated from the league for anything that happens after the game begins. And so, this is sort of been their back door around the first amendment or sports information being in the public domain.
The issues are often sort of clouded with quality, but really the same companies that are selling the data, official data, are also in the business of selling unofficial data too. So, the idea that they're selling lousy quality data sometimes and great quality data other times is really a fiction. And you know, the same is true with latency questions which is sort of the other big question, the sports league say, well, our official data is faster, which is sort of the name of the game as Mr. McIntyre talked about. But in reality, the unofficial data is very quick as well, especially from these top-level providers. So, it's really been a pretty creative workaround which has turned out to work well for the leagues in about five states. And we keep seeing it pop up in bills so they're continuing to gain traction with it.
KRISTY GALE: One note about the first amendment as well even aside from all of that. The challenge under the first amendment is that athletes generally have a lower, and I guess this is what Professor Holden was kind of mentioning, they have less protection of privacy because if there is a newsworthy purpose of sharing their information, then for example, if it's information or if it's entertainment, the public has a need to know. Then they can't restrict sharing of that data.
And there needs to be a delineation between historical sport stats or box scores that we talk about, even video data that can be observed by the naked eye versus the data that's biometric health information or tracking information that there's maybe no other way to measure or quantify or collect.
That's what the leagues have been primarily trying to protect, knowing that the data can be utilized and monetized. And we saw that in Indiana there was a court case, Daniels v. FanDuel. There was predominantly dealing with fantasy sports and some college athletes who their data was made public and shared without their consent. So, they sued and the Supreme Court, it went to the Supreme Court of Indiana, and that court held that there are a number of issues that needed to be addressed and pro leagues and associations and others, unions weighed in on that case.
They know this is an emerging and evolving issue and they do want to manage the data rights and they know that there will be more data that they can provide that no one else can provide because they have the wearable tech, they have the athletes, they have the tech, and they have the distribution channels. And so, there's a distinction I guess between, historical sports stats and where we're going and the new data, the next-gen data as the National Football League (NFL) likes to call it. So that's something to watch. It's definitely going to keep evolving.
