Social Sportsbooks Open Virtual Gambling to Minors

After the Supreme Court lifted a federal ban on sports gambling in 2018, a flurry of new players in the online gambling space emerged. Among them were "social sportsbooks" that take bets using "virtual currency," reports the Washington Post. With loose age restrictions (most are rated for users 13 and up, but don't require age verification), experts worry about the effect on minors. One fear is that they're able to dodge restrictions on gambling with real money through in-app purchase options. But even if they don't go that far, there's concern that virtual betting grooms kids to gamble later in life. Keith Whyte, executive director of the National Council on Problem Gambling, warns that youth "can develop gambling problems based on usage of these apps."

One survey of Canadian adolescents found that more than 12% of respondents had played a social casino game. Another study suggests adults and youth are more likely to partake in traditional gambling after playing such games. While sports gambling is now legal in 38 states (plus DC), the minimum age is at least 18 in each (and is 21 in most). But social sportsbooks operate under what BBN calls a "gray area." Because their betting mostly involves virtual currency, games and apps bypass many of the regulations and taxes that traditional sportsbooks are required to abide by. Some take advantage of less oversight by skirting the rules completely, and with rules varying by state, it's not entirely clear who is responsible to keep them in line.

In one recent case, regulators in Maine fined Underdog Fantasy to the tune of $392,000 in October for unlicensed sports betting; the game is among the top 10 downloads among sports apps on Apple's App Store. Sporting News notes that other features available to help regulate app use include the ability to set account limits. Matt Ricci, CEO of the popular social sportsbook Fliff, says his company has put into place new measures to ensure kids don't dip into real cash. The app now requires users to submit a video selfie and live photo ID when they apply to deposit or withdraw money. "We didn't have it initially, but I think what we saw is that we didn't realize a kid may want to use their parents' ID card and stuff like that," he says. (One in 4 Americans are expected to bet on the Super Bowl.)