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During the weekend, a bettor at the Meadowlands Racetrack in New Jersey placed a live bet on the Denver Broncos to win against the Oakland Raiders.
Anthony Prince received a ticket from the FanDuel Sportsbook betting window, showing odds of 750 to 1, with only one minute left in the match and the Broncos trailing.
Prince was denied his substantial winnings by FanDuel, even though an unexpected victory was achieved through a field goal in the last six seconds of the game.
FanDuel acknowledged that the unusually high odds were due to a system error, as explained by the company. Even though the bet had the potential to win an impressive $82,000 from a $110 wager, FanDuel decided not to honor the ticket. Instead, they offered a compensation package to Prince, including $500 and tickets to attend specific New York Giants games.
FanDuel stated:
In a span of 18 seconds, a couple of bets were mistakenly made at the wrong price. Nevertheless, we chose to honor these bets for the Broncos to win the game at the accurate market price. This decision aligns with our house rules and the industry’s standard practice, which specifically addresses significant pricing errors.
Concerns about fairness and regulation may trouble numerous prospective sports bettors as many regions of the country gradually implement state-regulated sports betting, including this incident.
What happens next?
The Division of Gaming Enforcement (DGE) in New Jersey is currently conducting an inquiry to ascertain whether FanDuel is obligated to honor the bet payout. Director David Rebuck emphasized that the DGE’s investigation is primarily centered on:
Furthermore, it is of utmost importance to comprehend the sequence of events leading to this incident, even though internal controls were in place to mitigate such errors. Identifying such revelations might also call for the implementation of supplementary measures or actions.
The Prince personally declared his intention to seek legal counsel in order to determine the most suitable course of action.
Was the error really obvious?
FanDuel started their statement on the incident by sharing their perspective:
The wager revolved around an evident pricing error that was unintentionally produced by our in-game pricing system.
It is understandable that there may be some glitches in New Jersey sports betting technology due to its novelty. However, if such issues occur, should the operator be accountable for addressing and rectifying their own errors?
It’s important to note that several things must have gone wrong. The staff member in charge of issuing the ticket failed to recognize the error and neglected to take any corrective measures, even when the chances seemed inaccurate.
If the issuer neglected to verify the ticket, it is fair to assume that they should have done so. However, if the ticket was indeed verified but the person checking it failed to notice the significant odds, it is unreasonable to expect the bettor to immediately recognize that there was a pricing error.
Is FanDuel taking advantage of bettors’ lack of knowledge about the actual odds by putting some of the blame on them for not noticing an obvious pricing mistake?
There have been multiple instances where other bettors have come forward, asserting that they encountered comparable problems while using FanDuel’s online sports betting application.
Bettor protection
The regulation of sports betting provides a significant benefit by protecting bettors from fraudulent local bookies or unauthorized offshore operators.
While FanDuel may have legal grounds according to its publicly disclosed terms and conditions, and the DGE investigation could potentially absolve FanDuel from any blame, it is of utmost importance to take into account the wider public opinion.
For years, sports enthusiasts residing outside of Nevada in the US have resorted to illicit operators to place their bets. To ensure the prosperity of regulated sports betting, it becomes imperative to attract these bettors back into the lawful system.
This particular story does not serve as a strong incentive for bettors to transition from offshore sites to the regulated sector, despite the latter offering enhanced protection. This is particularly true when the regulated sector may not offer the same favorable odds as offshore operators. It is also noteworthy that offshore books would likely follow a similar path as FanDuel, not honoring the bet without facing any regulatory repercussions.
Operators in the regulated sports betting industry encounter increased costs because of state gambling taxes and compliance obligations. Pennsylvania, recognized for its substantial tax rate of 36 percent on sports betting, presents a notable obstacle for operators in their quest for profitability. This task becomes even more challenging as they compete against an underground market that provides more advantageous odds.
Are sports bettors expecting too much?
The United States is renowned for its outstanding customer service standards, which give consumers more legal and cultural power compared to other countries. However, it could be argued that these high customer expectations might be unfair to sports betting operators.
Imagine yourself in a scenario where you are currently in the midst of buying a brand new car. While inspecting the car’s window, you come across an erroneously printed price tag of $35,000, instead of the accurate price of $53,000. It is crucial to acknowledge that it would be unreasonable to expect the dealer to sell you the car at the incorrect sticker price.
Nevertheless, in the case of a used car, the scenario becomes slightly more intricate as the advertised price is not as overtly inaccurate.
The betting ticket case is already concluded with the sale.
Picture this situation: You make the choice to buy a pre-owned vehicle at a highly discounted rate of $10,000, which is half of its original value of $20,000. But unfortunately, your excitement is short-lived as the dealer reaches out to express their dissatisfaction with an apparent pricing error. On top of that, they break the news that the car will not be delivered to you as initially agreed. How would you handle this predicament?
Consumer confidence in sports betting is negatively affected by the heavy reliance on technology, especially the prevalence of internet platforms that lack human verification of bets. As a result, a gray area is created, further deteriorating trust in the industry.
In jurisdictions where the legal framework is robust, it is commonly observed that sports betting operators often restrict or impose relatively low betting limits on bettors who consistently achieve significant wins.
The matter is yet to be thoroughly examined by the newly regulated markets in the US, but it will be assessed in the near future.
How will the regulators tackle this issue? It is expected that there will be different responses on a state-by-state basis, resulting in a fragmented system. Regrettably, this will have adverse effects on both consumers and the industry.
What should FanDuel have done?
Although hindsight is often appreciated, the true value lies in anticipation. FanDuel should have anticipated and accounted for this specific scenario, not just in terms of technology but also considering its impact on public relations.
Upon careful examination of the media coverage and Twitter responses, it may have been wiser to acknowledge the loss and fulfill the wagers by making the necessary payments.
Nevertheless, I must acknowledge the possibility that my strategic evaluation may be incorrect, and it is plausible that FanDuel has acted wisely by refusing to compensate for these glitches in order to prevent the establishment of a precedent. The potential adverse effects of setting a detrimental precedent might outweigh any transient harm to their public image resulting from this incident.
