MA Sports Betting Operators Concerned Over Landmark Data Privacy Rules

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MA sports betting operators gave state regulators “a lot to think about,” Massachusetts Gaming Commission chair Cathy Judd-Stein said after they voiced concerns over what would be the strictest data privacy rules in the country at a roundtable Tuesday.

It was MGC’s first roundtable to address restrictions set to take effect in late November that would largely prevent Massachusetts sports betting operators from sharing personal user information with third parties. Under the proposed rules, bettors would have to opt in for operators to share or use their information beyond what is necessary to run their business.

Operators ask for opt-out instead

David Prestwood, DraftKings government affairs and public policy counsel, led the effort by operators, asking to allow users to opt out instead of opt in.

“Every individual customer could have its own menu of uses for its data and that would be extraordinarily difficult to implement,” Prestwood said. “It makes it practically infeasible to conduct a lot of reasonable business practices, like marketing, because they rely on vendors.”

Jared Rinehimer, chief of data privacy and security at the Massachusetts Attorney General’s Office, which is working with the MGC, hinted that might be off the table.

“It seems like common sense: if you want to use someone’s information, you ask them first. That seems like a reasonable approach,” Rinehimer said. “I’m sure that there’s technical challenges to some of those particular types of consent but I don’t know if changing the consent mechanism is the appropriate way to address that issue.”

Problem gambling concerns

Michael Wohl, a psychology professor at Carleton University in Ottawa who studies gambling disorders, also suggested an opt-out clause.

“I’m concerned, because my guess is that you’ll have a low level of opt in, so any data that you get would be highly biased,” Wohl said. “Most players that play problematically understand that they’re playing problematically and wouldn’t want to provide that data. So my preference would be to have an opt out as opposed to an opt in.”

He suggested a carveout for data exclusively used to track and address problem gambling, which commissioners agreed to explore.

MA sports betting apps unhappy with process

The MGC fielded more than 30 pages of comments on regulation 205 CMR 257 since drafting it in June, said Mina Makarious, an attorney at Anderson & Kreiger LLP, who helped the MGC draft the rules.

But operators feel that most of their comments have “not been deeply evaluated,” Prestwood said.

“Operators are in agreement that the process to date has not represented the seriousness of some of these concerns and how challenging this is practically to implement,” Prestwood said.

Makarious refuted that idea, and noted that many comments asked for the regulation to be struck altogether. He added that feedback from WynnBet led to the exception for data “necessary” to run a sportsbook.

What is necessary to run MA sports betting business?

Alexis Cocco, associate general counsel for privacy and product at BetMGM, praised the expectation, but said it creates uncertainty about what is allowed.

“A lot of things are necessary to run our business, but it’s very difficult when the language is ‘necessary,’” Cocco said. “It’s necessary to eat every day, now is it necessary to drink coffee? If I don’t, it’s not going to be a great day, but is it really necessary for human function?  It’s trying to understand what you want so we can provide guidance for our product teams.”

Commissioners agreed that anything used to power responsible gambling functions would be allowed.

Alex Ursa, head of gaming at Betr, offered a few examples of what he was unsure would be deemed ‘necessary,’ which prompted Commissioner Eileen O’Brien to say that the MGC would need written examples to make any policy decisions.

Much more time still needed, operators say

Technically the rules took effect on Sept. 1, though amid initial pushack, the MGC agreed to suspend them though Nov. 17 via a waiver mechanism. However, operators say a more realistic extension would be more than 100 times as long.

“It could take up to two years, maybe even longer to meet all of the requirements,” Cocco said.

O’Brien says info needed to address concerns

The commission asked operators back in August to provide a realistic timeline for implementing the rules and to identify any waivers they might need to comply in the meantime. It is still waiting on those documents, which O’Brien said will help the MGC as it considers changes.

“It may be that this reg is going to have to come back up several times in front of us, a series of minor tweaks,” O’Brien said. “Ideally if we get this information memorialized, you give us what is done, what is doable on a certain timeline and still unanswerable potentially because you’re looking for clarification, then I think we can get into the next stage in terms of any cleanups that might be easy to do and any waivers that might be necessary.”

The MGC’s next meeting is scheduled for Thursday, though regulation 205 CMR 257 is not on the agenda.