Major U.S. sportsbooks unite to combat issue of problem gambling.

• A group of the country's largest online gaming companies is being established with the aim of promoting responsible gaming practices.
• The Responsible Online Gaming Association will be comprised of seven operators, including FanDuel, DraftKings, BetMGM, Penn Entertainment, Fanatics Betting & Gaming, Hard Rock Digital, and bet365.
• For the first time, companies have agreed to share information about customers excluded due to problem gambling.

A coalition of seven major gaming companies has formed a trade group to promote responsible gaming and disclose details about problem gamblers for the first time.

The Responsible Online Gaming Association, or ROGA, was formed by the seven operators, including Fanatics Betting & Gaming, Hard Rock Digital, and bet365, as announced on Wednesday.

In the US, the online betting market is dominated by the members, who account for over 85% of the market. These members have collectively pledged over $20 million to support ROGA.

Jennifer Shatley, executive director of ROGA, expressed her excitement about moving forward and making a significant impact through research, creating evidence-based best practices, and empowering players with information.

The gaming industry's ROGA members pledge to collaborate on topics such as education, responsible gaming practices, and ethical advertising and marketing.

The new group will establish a database to share consumer protection information, but the specifics of its operation are not yet known.

ROGA plans to establish a certification program that evaluates members' responsible gaming initiatives and motivates operators to join.

Since 2018, sports betting has experienced significant growth in the US, with 38 states and Washington, D.C. now offering legal wagering. The new consortium aims to capitalize on this trend.

Nearly 15,000 Americans bet on the Super Bowl online, doubling last year's peak, according to GeoComply.

As gambling has gained popularity and advertising for sportsbooks increases across various platforms, so do headlines about betting scandals and sports.

In recent days, Shohei Ohtani of the Los Angeles Dodgers has been at the center of a $4 million betting scandal, while the NBA is investigating Toronto Raptors player Jontay Porter for irregularities around wagering. Additionally, U.S. Integrity, a tech firm working to combat illicit betting in college sports, flagged anomalies around the betting lines for Temple University men's basketball games.

The potential for gambling's explosive growth to undermine integrity in sports and entice bettors into addiction could result in public criticism and an inflection point for the U.S. gambling industry.

Problem gambling

According to the National Council on Problem Gambling, approximately 2 million U.S. adults have a severe gambling problem, while another 5 to 8 million have a mild or moderate issue.

The rise of problem gambling has led to increased regulation in Europe and the UK, negatively affecting sportsbooks' earnings and altering their operations.

Efforts have been made in the US to self-regulate the gambling industry and avoid stricter regulations.

U.S. Rep. Paul Tonko of New York is proposing national legislation to address what he refers to as a "public health crisis." His "Supporting Affordability and Fairness with Every Bet Act," introduced last week, aims to regulate gambling advertising, limit deposit sizes, and restrict the use of artificial intelligence in customer acquisition.

"You will have a significant increase in people saturated with this opportunity, with the use of clever concepts such as bonus bets, free bets, and celebrity spokespersons," Tonko stated to CNBC.

The increase in the number of people struggling with addiction will be significant if there is an influx of gamblers, he stated.

In August, Maryland fined DraftKings $94,000 for marketing to underage players. In New York, PrizePicks reached a $15 million settlement for operating illegally. In Indiana, the gaming commission fined FanDuel after eight people used illegally obtained debit cards to fund their betting accounts, causing "great harm" to partners on shared bank accounts, according to the Indiana Gaming Commission Chairman Milton Thompson.

Customer protections

Some gambling experts are doubtful of ROGA, wary of what they perceive as a promotional gimmick aimed at resolving a public image issue.

The absence of ROGA's founder, who has learned best practices from 35 years of grappling with responsible gaming, was noticeably felt in the group's founding.

"We commend all efforts to ensure responsible operation and marketing of online gaming, but we are confident in our own Responsible Gaming approach," the company stated.

Caesars maintains that its rewards program is exclusively for individuals aged 21 and above, and does not allow anyone under that age to join, even in states where 18-year-olds are legally allowed to gamble.

Caesars and its competitors allow 18-and-up customers to play fantasy sports and sports betting in states where it is legal.

The industry is striving to enhance protection for its youngest and most susceptible clients.

In March, the American Gaming Association introduced an agreement to safeguard college students from sports betting promotions.

Flutter CEO Peter Jackson stated that responsible gaming is crucial for good business. However, he cautioned that as legal gambling operators work to enhance responsible gambling, the illegal gambling market will continue to accept bets from problem gamblers.

Jackson urged state regulators to crack down on black market operators, as he told CNBC.