Betting Apps Cap Winning Gamblers at 49 Cents

Sports betting platforms are restricting the maximum wager amounts for customers who consistently win, a practice that has drawn attention from state regulators and federal lawmakers. While losing customers often receive increased betting limits and exclusive rewards, professional betters report their stakes being reduced to pennies. This disparity is the focus of new inquiries into how online gambling companies manage their user base.

In a specific instance shared with CBS News, Michael Trevithick, a resident of Ann Arbor, Michigan, provided a betting ticket showing a maximum allowed wager of 49 cents on an NBA Cup game through DraftKings. The platform stated in a spokesperson statement that it applies customer-specific limits to less than 0.15% of accounts as an enterprise risk control. The company described these measures as responses to activity that appears designed to exploit errors or target discrepancies in odds.

Mike Manning, a professional bettor who launched his career when Massachusetts legalized sports gambling in 2023, experienced similar restrictions across multiple apps. Manning, who uses mathematical models rather than intuition to place bets, was limited to $25 per wager on DraftKings. On BetMGM, his limits dropped from $1,000 to $5,000 per game down to $5. Manning described the treatment as predatory, noting that losing bettors are exploited while successful ones are shown the door.

The Massachusetts Gaming Commission investigated these practices in 2024 and found a clear trend: winning gamblers had their betting limits decreased, while losing gamblers had their limits increased. The regulator found that 0.64% of Massachusetts betting accounts had been restricted. The state became the first to require gambling companies to notify limited gamblers and provide a reason for the restriction. FanDuel told Manning he was restricted due to an assessment of his wagering patterns and their impact on long-term risk position, while DraftKings cited internal risk management purposes.

Federal lawmakers wrote to major gambling platforms last week, expressing concern about the exploitation of vulnerable bettors. The letter stated that dangling perks, such as access to exclusive events and Super Bowl tickets, distracts bettors from financial losses and encourages continued betting. Brianne Doura-Schawohl, director of the Campaign for Fairer Gambling, argued the practice is unfair because pervasive advertising suggests everyone can win, yet the house ensures it does.

The issue is exemplified by the case of Chris Swett, a former South Carolina attorney who pleaded guilty to wire fraud and money laundering for stealing approximately $2 million from his law firm to fund his gambling. Swett stated that every dollar went into FanDuel. After wagering between $5,000 and $10,000 monthly by 2019, he was paired with a VIP host because he spent $25,000 a month. The host offered free tickets and complimentary entries to keep him betting.

Swett wagered $11 million and lost about $1 million over a two-year span. In a 2020 email, he wrote to his VIP host that he was tapped out for the month. Two days later, the host offered a 4% bonus on new bets. Swett, who now faces a maximum of 20 years in federal prison, said the system seemed designed to keep him playing. FanDuel responded that it has made changes to its VIP program, including additional employee training and new technologies to identify problem gambling. The company noted that it is an entertainment provider, not a tool for professional bettors to earn a living.

Matthew Litt, a New Jersey attorney who handles gambling cases, stated the practice is legal provided companies do not discriminate based on protected characteristics such as race or religion. DraftKings explained its limiting practices in a 2023 Securities and Exchange Commission filing, describing the restriction of betting limits based on individual customer profiles and risk levels. BetMGM declined to comment on the specific restrictions placed on its users.