VIP betting and gaming programs could face more scrutiny in the US

The Guardian, a publication in the United Kingdom that has vowed to not accept any gambling-sponsored content, has been on the offensive against the sector, looking into specific and alleged bad practices.

One such is the use of VIP programs that operators leverage in the United States to incentivize players to gamble more, according to a new detailed article by the publication. These programs, however, are coming under increased scrutiny.

VIP programs focus on new reporting by the Guardian

The Guardian has pointed out several issues with the current state of VIP programs, citing various experts, and relying on publicly available information. For example, the media said that companies in the United States had sent letters to a "prominent US senator" explaining that these programs were not designed to incentivize players to spend more money.

The letters were obtained by the Guardian, the media reported. However, the media also analyzed available job postings for VIP host positions within operators, which specifically asks players to "exceed engagement and service level performance targets" as well as "assist in reactivation efforts to re-engage inactive users."

However, spending more and re-activating players are two very different things. While players who have not been gambling would obviously spend more if they return to the platform and play, the idea is to tap into the database of already registered players and offer them incentives to consider returning to an activity that they have already enjoyed once in the past.

Recently, BetMGM signed a partnership with Enteractive, a company that specifically focuses on reactivations and one-on-one conversations with lapsed account holders, offering them incentives to consider returning.

The newspaper went into analyzing individual cases, such as that of Lisa D’Alessandro’s estranged husband who spent 440% of his salary in 2023 on betting and gaming, as his addiction continued to intensify. He was also qualified as a VIP customer, with D’Alessandro simply stating that operators wanted such customers to "feel like they have won something."

VIP programs likely to pose an ethical and legal dilemma for lawmakers

The paper quoted relevant experts, including Cait Huble from the National Council on Problem Gambling, who offered criticism to some of the practices deployed by gaming operators, arguing that the newly regulated industry has not learned from the lessons of established and long-running markets such as the United Kingdom.

Huble also argued that VIP hosts are in fact financially motivated to keep people spending more or at least appear to be so. Ultimately, the Guardian argues, as the industry shifts towards a more user-centric approach, the dangers associated with some VIP practices will come to light.

The industry has previously faced regulatory scrutiny over misleading promotions, particularly the use of the term 'no risk' bonus.

Regulators objected to offers where players had to wager their own money first, and if they lost, they were refunded in the form of a bonus. However, they were required to wager it again before withdrawing any winnings. This meant the offerwas not truly "risk-free," leading to enforcement actions at both state and federal levels.

Whether VIP programs get the same level of scrutiny remains to be seen, but the Guardian is arguing that the smart money is on yes.

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