Not far from the Lincoln Tunnel and just off the NJ Turnpike is the Meadowlands Sports Complex. Two NFL teams call this complex home. There is an arena in the Meadowlands as well as a harness racing track. However, what grabs your eye is a huge multi-colored slanted building known as American Dream. It’s been in development for over 15 years and eventually when it opens it will be the first indoor ski slope in the Western Hemisphere. Over the course of this post I’ll explain why this isn’t the most slippery slope in the Meadowlands this week.
Background
As you may have heard, a bettor placed an in-game wager at the FanDuel sports book on Sunday on Denver to win its game against Oakland as the Broncos trailed 19-17 late in the 4th quarter. FanDuel had offered a line of DEN +75000. The bettor wagered $110 at the betting counter and a clerk accepted the wager and printed the ticket. Denver kicked a Field Goal with :04 remaining and won the game 20-19. The bettor soon learned that FanDuel was refusing to honor the wager and instead offered him $500 and some tickets to a future NY Giants game.
FanDuel claims that the line was an obvious pricing error and they don’t have to pay lines they deem as being wrong. Two days later, after the story broke, FanDuel said it was willing to pay the wager according to the line as it should have been posted. However, to add insult to injury, FanDuel claimed that the correct line should have been -600. The patron’s $110 wager would win $18.35, not $82,500.
Slippery Slope
In general, the response to this story has been that this patron must have known that the line was completely off and was taking a shot. My opinion is that this isn’t about a man taking a shot at a sports book; it’s about a sports book taking a shot at a man. A slippery slope is the perfect way to describe this situation. While the majority of people would feel that getting paid 750-to-1 on this wager is egregious, at what point does it become not so? Who decides where that line falls? Why should we let the sports books decide where the demarcation lies between value and mistake? If I make a wager for +150 and that same wager is available elsewhere for +100 will a sports book contend that its price was incorrect and refuse to pay me?
Many have invoked the old slot machine adage that a malfunction voids all pays. However, sports wagering is different. A sports wager is a contract agreed to by two parties. A sports book lists available wagers. The patron offers to enter into a contract on an offered wager. The sports book accepts the wager and a contract is born. The most remarkable part of this story is that the patron placed this bet at the counter with a human clerk. Apparently, FanDuel has no checks in place to manually review wagers which have a large payout. If they do, someone failed to do their job. None of this was the fault of the patron.
This was the promise of regulated legal sports wagering. We would no longer be subject to the whims of faceless offshore management. We would finally have rules, regulation, and recourse. No longer would justice be unbalanced when it came to sports wagering outside of Nevada. Proponents of legalized betting promised we could root this out of the sports wagering industry. There would finally be an ombudsman. In this case, the ombudsman is the New Jersey Division of Gaming Enforcement (NJDGE).
What Do The Regulations Say?
In an effort to whisk sports wagering to the people, New Jersey approved emergency regulations to govern the industry. The temporary regulations should be approved sometime this fall, but in the meantime they’ve taken several steps to protect both the consumer and the operator. In this instance, the most relevant section is NJAC 13:69N-1.11(d):
A wagering operator shall not unilaterally rescind any wager pursuant to this chapter without the prior approval of the Division.
The chapter it is referring to presents the rules laid out by the NJDGE for who is permitted to make a legal wager. It would appear that by unilaterally rescinding the patron’s wager, FanDuel has violated this stipulation. Furthermore, by not notifying the NJDGE and attempting to negotiate with the patron, it appears it committed a further violation. Meanwhile, in its house rules, FanDuel states they reserve the right to cancel a wager or change the pricing thereof. How could the NJDGE approve an operator’s house rules that are in direct contradiction to its own regulations?
Is This Publicity Worth it to FanDuel and Betfair/Paddy Power?
A key point lost in this debate of whether FanDuel should have to pay the wager is the negative publicity that FanDuel is generating. There are many people on social media saying that this is typical of the DFS company. They cite the pricing issues FanDuel had when it entered the sports betting market earlier this summer. They cite the high margins DFS players have had stacked against them.
Meanwhile, FanDuel’s parent company is Betfair/Paddy Power. Paddy Power has never been one to miss out on generating positive publicity, sometimes at its own expense. For instance, in 2016 they famously paid all bettors who had Hillary Clinton to win the presidency days ahead of the actual election. When Trump won they paid Trump bettors too. It was a move that cost them a reported $4.5 million but generated worldwide publicity. It would seem that this is a perfect opportunity for Betfair/Paddy Power to help reverse the tarnished image of their US-facing arm and generate good and powerful publicity by paying the wager.
What Happens Next?
The NJDGE has stated that it is investigating this issue. It will be their job to decide if a sports book should be allowed to use a mispriced line as an excuse not to pay a wager. In doing that they’ll need to decide at what point a mistake becomes a mistake. The NJDGE will also need to resolve how a sports book’s house rules can circumvent the state’s regulations.
It would seem that the NJDGE has the ability to put this entire industry on notice. To explain that this brave new world of legalized sports wagering is not a case of business as it’s done elsewhere. That a ticket goes as written. A contract between two parties should be honored. Otherwise, they’re perpetuating a slippery slope of unbalanced justice. This is a key time when other states are closely watching what happens in New Jersey. The fate of bettors across the country is actually at stake here. This is less about a single wager paying 750-to-1 and more about protecting future bettors betting against the odds.
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Nice article CJ. Hopefully someone sends a copy of it to NJGC.
While i generally agree, u need to look at such matters at the limit. What if instead of one player, 100 or 1,000 or 10,00 players placed said bet. What do u do then? Bankrupt the company? Again, i generally agree with “all bets are final,” but a resolution to this kind of problem is not so cut and dried.
Fan Duel ended up paying.
They did indeed. I don’t think the matter should be closed though. The NJDGE still has a duty to investigate and find out how this error occurred and what can be done to prevent it from happening again. It goes beyond a “glitch” as there were other checkpoints where it could have subsequently been halted prior to the customer holding a ticket in his hand. Again, this is the beauty of regulated environments. We’re developing case law here for future disputes.
FD is not setting a precedent by paying out this wager…it’s clear they wanted to get ahead of any additional bad press at such a crucial time in their US existence. NJDGE, however, should attempt to set a precedent so that the next time this happens they can be ready for what steps should be taken by both parties. They also need to set precedent for how future legalized states handle this same thing. Ambiguity on how to handle an event like this led to fomenting the issue.
NJDGE must step up now and survey their industry to find how this will be prevented in the future and a universal method for how this is handled through them in the future.
Companies that make too many mistakes are supposed to fail, that’s how capitalism works, otherwise you just get state-sponsored crony-capitalism. Yes I know the Fed deemed certain banks “too big to fail”. That was a mistake. Let’s not make that a pattern. In this particular case, note that FD apparently only wrote one ticket. I think they are just testing NJDGE to see what they can get away with. If they get away with this expect to see many more “mistakes” that aren’t payed in the future and bettors will return to the bookies and offshore betting where they will get a fairer deal.
The mistake they made was in failing to place the needed phone call to Denver’s field goal kicker.
What would have happened if Denver lost? The house would have kept the money and breathed a sigh of relief.
The fact that Paddy Power would pay off the idiot Clinton bettors only shows the stupidity of the idiots at the top of that organization. What a bunch of losers! FanDuel leadership needs to have their feet held to the fire! What a bunch of cheap asses!
I think it cuts both ways. In the case of an obvious error there has to be some limit.
Paddy Power has shown in the past that they’re willing to pay for their mistakes and
just plain pay to establish good will. Had the guy bet it 5 times for $110 and had
tickets in hand would the perception of who’s trying to screw who change?
I don’t buy the players story and I think the decision to pay sets a problematic precedent
– but if that’s how they want to handle it then so be it.
Off to look for pricing errors and incompetent ticket writers.
I am a sports bettor, but, this decision doesn’t sit right with me.
Well done to the ticket holder etc, but I would imagine rules will quickly be drafted to exclude obvious pricing errors.
In-play betting is hard to price, especially towards the end of a close game, but I imagine they could find some way of comparing the time stamp of the bet, to the price on a fairly liquid exchange at that moment in time.
Given some generosity for the mistake, I would hope most bettors would be happy.
Bottom line, is that other punters will pay for the error. Lines will be priced, less favorably.
Actually, the idiots were the TRUMP bettors who bet a 100-1 longshot that only paid 8-1 or so, What gets lost in the shuffle was the fact that Clinton bettors were laying 10-1 or worse, so paying them off was an inexpensive publicity stunt. And Trump won (or, actually, “won”), but that doesn”t change the fact that the odds against him were prohibitive. Now, if it had been displayed correctly as “Putin/Hannity” instead of “Trump/Pence”…
It’s interesting that on a website expounding the philosophy of spending enormous amounts of time and effort looking for and exploiting the tiniest of advantages, when an enormous and obvious edge pops up, the integrity of the player who took advantage is questioned.
The player shouldn’t have to explain himself therefore his story is irrelevant.