US online gambling giants in ruthless quest for market dominance

The rapid expansion of the online gambling industry, particularly in the U.S., raises critical questions about the uniformity and adequacy of regulatory frameworks across different jurisdictions. The discrepancy in the regulatory landscape between the U.S., UK, and Europe is stark. Companies like Flutter and Entain, which have acknowledged and rectified potentially harmful practices in the UK, continue to employ these same practices in the U.S., where the market is less mature and regulatory scrutiny is less intense.

This situation prompts many grey areas: Should there be a global, uniform standard for responsible gambling? While this idea might seem appealing, it opens up a minefield of challenges, given the varying degrees of regulation enforcement across different countries and states. However, the need to tackle problem gambling from a corporate viewpoint is undeniable. The recent Reuters report highlights several thought-provoking issues, including the use of practices deemed too risky for the UK market but used in the booming U.S. online gambling industry.

The question remains: How can the industry ensure that the race to capitalize on this rapidly growing sector does not overshadow the need for robust, uniform, and effective regulations that prioritize customer protection? The answer to this question will require careful consideration, collaboration among stakeholders, and a commitment to prioritizing the well-being of customers over profits. The stakes are high, and the time for action is now.

What the Reuters report says

The special Reuters report brought to light that Flutter and Entain are using aggressive tactics in the US market that have abandoned in the UK due to regulatory concerns.

Key Points	US vs UK practices in online gambling
✅ Regulatory differences	The UK has stricter gambling regulations, while the U.S. lacks mature regulatory scrutiny, allowing riskier practices
✅ Corporate practices	Companies like Flutter and Entain use safer practices in UK but employ aggressive tactics less regulated U.S. market
✅ Case studies	Examples of how weak regulations can lead to significant financial losses due to problem gambling
✅ Corporate justifications	Different practices are justified by localised compliance and market maturity, while committing to customer protection.
✅ Call for uniform standards	Industry is urged to prioritize customer protection with collaboration for effective regulation, and global uniform standards.

The focus of the report is on the differences in regulatory environments between the US and the UK, highlighting how these companies have not implemented the same safeguards in the US that they have in the UK. This includes practices like VIP programmes and high betting limits that can lead to problem gambling.

Regulatory differences and corporate practices

In the UK, stricter regulations have led to the curtailment of certain practices to protect gamblers, which are still being used in the U.S. The report points to some case studies with examples of individuals who lost large sums of embezzled money through gambling on platforms like FanDuel. It also examines how these companies justify their different approaches in the US and Britain, and the potential harm it is bringing to US gamblers.

For example reference is made to a case in 2018, when the UK branch of the online gambling giant Flutter was penalized by British regulators due to an extraordinary oversight. The director of an animal shelter had been misappropriating funds from his workplace to finance his compulsive betting habits, resulting in losses exceeding half a million dollars over a four-year period, as reported by the charity where he worked. The gambling regulatory authority compelled Flutter to pay approximately $2.8 million for failing to safeguard customers from evident unregulated gambling and for failing to prevent the use of pilfered money.

Peter Jackson, the Chief Executive of Flutter, publicly expressed regret for not stepping in, stating that the company had an obligation to intervene “when our customers exhibit signs of problem gambling.”

It is also interesting to note that FanDuel and BetMGM, two major players in the U.S. online gambling industry, collectively account for approximately 50 percent of the country’s net revenues from this sector. Flutter, the parent company of FanDuel, has been questioned about its practices in the U.S., which have been identified as potentially harmful in the UK. In response, Peter Jackson, the CEO of Flutter, stated that the company is dedicated to maintaining high customer protection standards across all its operational markets. He gave his reassurance that Flutter’s role was to lead the industry towards higher standards.

Case studies

He explained how Flutter operates in strict compliance with the rules and regulations of the jurisdictions it is licensed in and tailors its strategies to the local markets it serves, taking into account their maturity and competitive landscape. The U.S. is Flutter’s largest and fastest-growing market in terms of revenue, with its FanDuel brand recording over $40 billion in online bets last year.

BetMGM’s co-owner, Entain, operates in numerous markets and believes that a ‘one size fits all’ approach would not be feasible or commercially viable. Rob Wood, Entain’s CFO, acknowledged that the U.S. market is still in its early stages and lacks the level of protections seen in the UK. However, he defended BetMGM’s practices, asserting that the company does not compromise on standards.

BetMGM, the third-largest online gambling company in the U.S. by revenue, is a joint venture with casino operator MGM Resorts International. The company is committed to providing a safe environment for customers and exceeding its regulatory obligations to ensure a positive player experience. MGM Resorts did not respond to requests for comment.

A customer of Jackson’s, this time in the United States, fell into an even deeper spiral of uncontrolled gambling, wagering millions of dollars of stolen money through Flutter’s U.S. brand, FanDuel. Amit Patel, who was then a mid-tier finance manager at the Jacksonville Jaguars football team, transferred $20 million of his employer’s money into his FanDuel account between 2019 and early 2023. He subsequently lost the majority of these embezzled funds, according to court records. Both Patel and the head of the British animal shelter admitted to committing fraud.

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