Breaking News
unprecedented coalition forms for safer online betting 146

Market Trends

Unprecedented Coalition Forms for Safer Online Betting


Lauren Miller

March 27, 2024 - 12:20 pm


Pioneering Collaboration for Responsible Online Gaming

In an unprecedented move, the titans of the online gaming world have come together to establish the Responsible Online Gaming Association (ROGA), aiming to enhance the safety and integrity of the internet gambling ecosystem. This coalition aligns seven of the most influential operators in the market—FanDuel, DraftKings, BetMGM, Penn Entertainment, Fanatics Betting & Gaming, Hard Rock Digital, and bet365. They have collectively decided to tackle the issue of responsible gaming head-on, committing both financial resources and groundbreaking data-sharing practices.

Uniting Forces for Change

These seven industry leaders account for a dominating 85% share of the legal online betting landscape in the United States. Recognizing their role and influence in the sector, they have come to the table committing over $20 million to jumpstart the efforts of ROGA. The association emerges as a beacon of hope and action, forging a path toward a more secure gambling environment for consumers online.

"I'm incredibly excited to move this forward and to really do some impactful things and to really expand the knowledge through the research and to create these evidence-based best practices and to really empower players with information," shared Jennifer Shatley, the recently appointed executive director of ROGA.

A Unified Front for Consumer Protection

The founding members of ROGA are embracing a shared vision that ranges from collaborative educational initiatives to the establishment of industry standards for conscientious advertising and marketing. The backbone of these efforts is the creation of an independent clearinghouse—a database that would facilitate the unprecedented sharing of vital information related to consumer protection. Although further details are pending, the intention to create such a framework signals a commitment to transparency and consumer safety unlike any before seen in the industry.

ROGA is not stopping at information sharing; it also plans to introduce a certification program that will critically assess members’ responsible gaming practices. This program is envisioned to serve as a benchmark for excellence, encouraging all operators to strive for higher standards and recognition for their responsible gaming initiatives.

A Mutation in the Betting Landscape

The impulse to form ROGA has, in part, been fueled by the explosive growth of sports betting across the United States following regulatory changes in 2018. No less than thirty-eight states and Washington, D.C., now offer legal sports wagering options. This year's Super Bowl showcased this expansion with online transactions hitting nearly 15,000 per second, as reported by geolocating platform GeoComply—a figure that shattered the previous year's records.

GeoComply's Statement on Super Bowl Wagering

However, the widespread visibility of gambling, echoed through incessant sportsbook advertisements on diverse media platforms, mirrors the rising concerns over gambling-related malpractices and scandals in sports. Not long ago, Los Angeles Dodgers standout Shohei Ohtani was unwittingly tangled in a multimillion-dollar betting controversy. Meanwhile, the NBA probes questionable betting activities linked to Toronto Raptors' Jontay Porter. These incidents echo a perilous side effect of gambling's burgeoning popularity— the heightened potential for addiction and compromised sports integrity.

The Urgency of Addressing Problem Gambling

Anxiety around problem gambling isn't unfounded. According to the National Council on Problem Gambling, the United States houses an estimated 2 million adults with severe gambling issues, with an additional 5 to 8 million showcasing mild to moderate gambling problems. These concerning figures have led to the implementation of stringent regulatory measures in Europe, with the United Kingdom notably revamping operational practices to safeguard consumer interests.

National Council on Problem Gambling

The U.S. is being proactive, aiming to self-regulate to avoid the introduction of harsher laws. U.S. Rep. Paul Tonko of New York has introduced the "Supporting Affordability and Fairness with Every Bet Act" to Congress, targeting gambling advertising, use of AI in customer acquisition, and limiting betting practices that may exacerbate addiction.

Tonko's Legislation on Betting Practices

"Your going to have a lot more people saturated with this opportunity, with all these clever concepts of bonus bets, free bets, and celebrity spokespersons,” Tonko articulated his concerns over the burgeoning industry and its potential consequences.

States Taking Action Against Irresponsible Gaming Practices

Several states have already begun to address instances of inappropriate gaming practices with penalties. For instance, Maryland imposed a $94,000 fine on DraftKings for targeting minors, while PrizePicks settled for $15 million in New York for illegal operation. FanDuel faced fines in Indiana due to unauthorized use of debit cards causing 'great harm.'

Fines and Violations in the Betting Industry

Indiana Gaming Commission's Action Against FanDuel

Skepticism and Aspirations for Customer Protection

Despite ROGA's ambitious agendas, some industry veterans remain skeptical, perceiving the move as a public relations strategy rather than a genuine commitment to change. Contrastingly, Caesars Entertainment—one noticeable absentee from the ROGA—ascribes confidence in its responsible gaming efforts, honed over 35 years.

"We applaud all efforts to ensure online gaming is both operated and marketed in a responsible manner; however, we are confident in our [own] Responsible Gaming approach," a statement from Caesars read. The gaming giant has prioritized the 21-and-older demographic, taking stringent measures even in states where legal age restrictions may be more permissive.

Yet, the broader gambling industry is awakening to the need for protecting its most vulnerable participants, especially the youth. The American Gaming Association (AGA) has put forth measures designed to shield college-aged students from excessive exposure to sports wagering marketing.

AGA's Responsible Marketing Code

An Appeal for Cohesion Against Unregulated Play

Peter Jackson, the CEO of Flutter, the parent company of FanDuel, expressed that the nucleus of responsible gaming is indeed sound business. Nonetheless, he pointed out a sobering reality—the illegal betting market unfettered by regulation or conscience.

"I urge the state regulators to help us by clamping down on some of those black market operators," Jackson implored, highlighting the necessity of regulatory participation to truly safeguard the integrity of responsible gaming.

The emergence of ROGA marks a pivotal moment in the intersection of online gaming and consumer protection. If ROGA succeeds in its intent, it could mark a sea change not just for the United States, but as an exemplar for regulatory practices globally.

Keep Informed with CNBC PRO

For those wishing to stay updated on the latest industry insights and investment trends, CNBC PRO offers a range of informative articles and exclusive stories to help navigate the complex world of finance.

Insights from CNBC PRO

As the battle for responsible gaming rages on, eyes will invariably turn towards the effectiveness of ROGA's strides. The association's efforts represent more than a shield against regulatory backlash; they signify an ethical pivot where the industry accepts guardianship of the trust and well-being of its customers. With a broad spectrum of initiatives ranging from educational endeavors to safeguarding against problem gambling, ROGA's founding members are writing a new chapter in the story of online gaming—one where responsibility isn't just a buzzword, but a business imperative.

Inherently, the narratives surrounding ROGA, its members, and the global gaming landscape will evolve. The association's influence on the future of responsible gaming—and whether its formation will be regarded as a watershed moment or a cursory act—remains to be seen. But what's undeniably clear is that the founding members of ROGA have catalyzed a conversation that spans beyond their individual enterprises, reaching into the living rooms of everyday Americans and the halls of legislative power.

Embracing a New Ethos in Online Gaming

As the online gaming industry steps into a new era of self-regulation, ROGA members have committed to leading the charge in fostering responsible gaming habits. Their binding agreement to exchange critical data on problem gamblers unveils an unprecedented level of collaboration and decisiveness.

This ambitious union stands tall as a testament to the industry's capacity for introspection and transformative change. It signifies a collective awakening to the precedents set in other markets and a resolve to respond proactively rather than reactively to the challenges posed by an ever-expanding digital gaming frontier.

The journey ahead for ROGA, and indeed for online gaming, is one that demands vigilant oversight, unflagging commitment, and an unwavering dedication to the principles of consumer protection and ethical practice. As this narrative unfolds, it's certain that the stakeholders—regulatory bodies, operators, and consumers alike—will be keenly observing and participating in shaping a landscape where the thrill of the game never comes at the cost of the player's well-being.

ROGA's narrative is only beginning. Yet, it already stands as a vivid example of how collaboration can ignite significant progress in an industry frequently scrutinized for its ethical standards. While challenges and skepticism may still surface, ROGA has set a new bar for accountability in digital entertainment—ushering in an era where responsibility and gaming coexist in a harmonious balance.