BUSINESS

The Mouthpiece: What about the players? Legal questions affecting the new customers of sports betting

TAGs: Guest Contributor, Martin Owens, sports betting, the mouthpiece, United States

This is The Mouthpiece, a guest contribution by Martin Owens. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.

Sports betting is coming in in a big way, and there is much discussion of what legal issues will arise for state licensing authorities and the operators of the new format. But there are also some legal issues that affect the customers directly, and leave it up to them to protect themselves. Here are a few of the more prominent:

Legal questions affecting the new customers of sports bettingWho will be allowed to bet?

At least for right now, sports betting is licensed on a state-by-state basis. This will mean that only people physically located in that state will be able to place bets, whether or not they are legally residents. It will be very similar to the situation with Internet poker in New Jersey. If you are a non-resident visiting relatives in New Jersey, it should be possible for you to play while you’re there. But only while you’re there. If you are a permanent resident, even if you are registered with one or more licensed operators in the Garden State, even if using a mobile- friendly app to play, you will not be allowed to participate in any games as long as you (and your phone) are located outside the state borders. At the same time, players may deposit funds into  their respective accounts, or withdraw from them, at licensed sites from outside the state.

US state laws, including their gambling laws, are not normally supposed to have effect outside the state boundaries. To hold otherwise would be to involve states in constant jurisdiction squabbles, at least until there is an agreement between various states to pool their customer base- as, indeed, New Jersey, Delaware and Nevada are already doing with online poker. But until that phenomenon reaches sports betting, it’s one state at a time. Customers must be 21 or over for I poker in New Jersey; count on that as being the standard for sports betting as well.

What will happen to problem gamblers?

Individual customers can count on being able to self exclude, for periods prescribed by each individual state. In addition, help lines for problem gaming will be featured at every establishment, and very probably online too.

Various proposals have been floated for warnings to be sent to players who are plunging too heavily, or perhaps even mandatory “cooling off” periods. Interestingly enough, this will be far easier for an establishment which operates online- record keeping will be able to easily reveal who has been putting down how much over which period of time. This is harder to do in a land-based him, where all someone needs is the money to put down.

While once again this will be settled in each individual state, right now it seems that an online sports bettor’s main defense against the problems of problem gambling is going to be his own good sense.

Complaints against an operator?

This is probably the biggest single selling point for legalized sports betting in the USA. A customer who has a complaint or question regarding an operator’s handling of bets or accounts will be able to go straight to the authorities of his home state. Obtaining jurisdiction over a betting operator located abroad has always been problematic at best, and up to now this was understood to be one of the occupational hazards of online gaming. Now the aggrieved gambler will be able to summon the home authorities, subject to whatever preconditions may be imposed, such as a requirement to attempt to resolve the dispute directly first.

What about security?

Once again, this will be primarily the concern of online and mobile betting. Over the last few years it has become painfully clear that the Internet is nowhere near as secure as everyone once imagined. A week hardly goes by without the revelation that some new industry, online retailer, bank, or even government agency has been penetrated, and the sensitive personal information of millions of users has gone God knows where.

It may be possible in the long run to recover damages against operators or even states who do not adequately ensure the safety of betting customers information. But for the immediate future, your own caution is your own best protection.

First, limit your exposure. Don’t give out any more information than is strictly necessary to open an account. Check to see what forms of payment are available. At least some states are going to authorize electronic bank drafts, and it may be worth your while to establish a separate account, handling only your betting transactions.

But most important, your own vigilance is once again your first line of defense. Make it a point to periodically review transfers, payments and deposits to every card or account you use to fund betting activities.

Faking itLegal questions affecting the new customers of sports betting

There is an extra wrinkle, however, in the questions about security and identity. It has happened that individuals, having put themselves on self exclusion lists, change their minds and try to get back in by pretending to be somebody else. This is a really bad idea at any time, but particularly in reference to a program that is administered by state authorities. They will have the power to ban offending individuals from gaming altogether. They will be able to invalidate winnings obtained under false identification, possibly up to and including court action to recover funds from offending individuals even beyond their gambling accounts, reaching out for other assets. It’s the other side of the local-authority coin: if they can bring you relief right here, they can come after you right here. So play nice.

Summary

Liberalized sports betting is going to open new possibilities for entertainment and public revenue, and seems likely to spread to almost every state fairly soon. The main responsibility for the safety of individual players’ funds and the security of their sensitive information is likely to be their own diligence and watchfulness, at least for the foreseeable future. Like the man said, trust but verify.


Mr. Owens is a California attorney specializing in the law of Internet and  interactive gaming  since 1998.  Co-author of INTERNET GAMING LAW with Professor Nelson Rose,( Mary Ann Liebert Publishers , 2nd ed 2009) ; Associate Editor , Gaming Law Review & Economics; Contributing Editor, TSN. Comments/inquiries welcome at  mowens@trade-attorney.com.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com