What Exactly Is Going On At FanDuel Sportsbook After Its Latest Major Hiccup?

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FanDuel Sportsbook

First, FanDuel Sportsbook refused to pay winning late-night bettors after closing its cage. Now, FanDuel does not want to pay a winner on a printed ticket and the operator faces serious questions.

The newest error by FanDuel Sportsbook spawned a fresh wave of criticism this week. Several bettors placed a high-return, in-play NFL wager during the closing minutes of the OaklandDenver game Sunday, only to find their tickets worth a fraction of the printed value. The company released a statement citing a computer glitch as the reason for adjusting patrons’ winnings.

Rules and regulations governing FanDuel Sportsbook and New Jersey sports betting lay out a possible resolution, but something about the process doesn’t quite feel right.

What happened at FanDuel Sportsbook?

New Jersey resident Anthony Prince was at The Meadowlands for the afternoon games on Sunday. It’s the busiest sportsbook in the state.

With more than a minute left in the game and Denver trailing by two points, Prince bet on the Broncos to win, and they did. The payout listed was $82,610 — a staggering return of 750-1 on his $110 wager.

Those familiar with in-play sports betting might realize the line was unreasonably high considering the in-game situation. Prince, however, apparently did not know the odds were erroneous until he went back to the window to collect.

FanDuel Sportsbook refused to honor the printed value of his ticket, instead offering to settle it at -600 (or 1/6, in fractional terms). Here’s their statement, released Tuesday evening:

“The wager in question involved an obvious pricing error inadvertently generated by our in-game pricing system… At that moment in the game, our system updated the odds and erroneously posted a price of +75,000 on the Broncos to win the game (bet $100 to win $75,000) when the correct odds for the Broncos to win the game at that point in time were -600 (i.e., bet $600 to win $100). A small number of bets were made at the erroneous price over an 18 second period. We honored all such bets on the Broncos to win the game at the accurate market price in accordance with our house rules and industry practice, which specifically address such obvious pricing errors.”

Prince did walk away a small winner, but his $18.35 in profit was not quite $82,500.

“They said their system had a glitch in it,” he told News12, “and they’re not obligated to pay glitches.” Eighteen seconds is an eternity for in-play betting.

As an additional gesture, management offered him $500 and tickets to three New York Giants games. Prince declined.

Prince out of luck, the rules say

Although Prince made no mistake of his own, gambling precedent is not on his side when it comes to a remedy.

Anyone who’s spent time in front of a slot machine has seen the placard: “Machine malfunction voids all jackpots.” Regulations typically permit casinos to cancel wins that stem from electronic or mechanical faults, and it happens somewhat regularly.

The same can be said of customer behavior that falls short of cheating but still manipulates the game. Just ask Phil Ivey about that.

Sports betting isn’t an apples-to-apples comparison with other forms of gambling, but similar protections do exist in house rules and state regulations governing the activity.

The rules at FanDuel Sportsbook contain multiple sections about errors that seem to cover its backside. If the platform books action at odds that are “materially different from those available in the general betting market,” management can settle those tickets at “the correct price.” Additional rules expressly shield the operator from faulty odds spawned by technical errors.

There’s no doubt that the line in question meets those criteria. It was a plain mistake, clearly incorrect and materially different from the general market price.

What do New Jersey sports betting regulators say?

From an oversight standpoint, these disagreements are handled differently depending on where they occur.

Punters from the UK who’ve read the incident mostly skimmed past with a laugh. Erroneous lines are fairly commonplace in Europe, and operators are fully protected.

They even have a term for it. A “palp” — short for palpable error — refers to a clear pricing mistake. It’s common enough that bettors accept it as ordinary.

In Nevada, some sportsbooks would have just taken the hit and paid the tickets within reason. “Tickets go as written,” as they say.

Barring that, rules governing Nevada sports betting give patrons some additional recourse. Operators must immediately report any dispute exceeding $500 to the Nevada Gaming Control Board for investigation, and anecdotal evidence suggests that the agency’s decisions sometimes favor the bettor and other times favor the operator.

NJ sports betting regulations do not specify a process for handling palpable errors, but there are some clauses that might be relevant:

“A wagering operator shall not unilaterally rescind any wager pursuant to this chapter without the prior approval of the Division.”

At the same time, house rules appear to absolve FanDuel Sportsbook of responsibility. And regulators signed off on those rules before authorizing the first bets.

Reached for comment, the NJ Division of Gaming Enforcement simply said the matter is under investigation.

When what’s right is what’s wrong

Unless the DGE decides to impose penalties against FanDuel Sportsbook, the issue appears to be settled within existing rules and regulations. Prince will likely have to settle for a free lunch.

The question bettors and regulators should be asking themselves is: why? Why should patrons be forced to accept that these glitches are unavoidable?

Sports betting operators are — or should be — working with the best software and algorithms, especially when it comes to in-play wagers. FanDuel Sportsbook falls under the umbrella of Paddy Power Betfair, one of the world’s largest gambling companies. How can palps be an accepted part of its business?

It’s certainly not sitting well with the growing community of US bettors. Here’s how Prince summed up his disappointment:

“The government is taxing it now, so I thought it would be a better situation. You’d rather go to the corner bookies now if you’re not getting paid here.”

At least one other bettor had the same experience on the mobile platform and a similar reaction:

“How can I trust any line on that site knowing that, at any point, anything can be changed or manipulated in any way they see fit?”

The DGE is still investigating the situation, so it’s too early to say whether FanDuel Sportsbook will face penalties. If the DGE wants to ensure faith in regulation, it should.

Glitches get stitches

A sportsbook shouldn’t go bankrupt because its software freaked out for 18 seconds, but there should be sanctions for breaching that contract with the bettor. While some leniency is justifiable during the early days, tolerance for these errors must grow tighter as time goes on and as a particular operator’s errors pile up.

How can there not be controls in place to catch such issues before an erroneous ticket is printed or confirmed on an app? There are some checks in place, but something is broken. Mistakes of this magnitude should not happen, nor should they go unpunished.

An operator that habitually posts shoddy lines, whether human- or computer-driven, should have to reevaluate how it conducts business. Perhaps a three-strike policy would be worth exploring at the regulatory level, or a suspension on in-play betting for repeat offenders.

A fair rule could work both ways

It might also be worth expanding this one-way house rule so it covers both sides, within reason:

“Patrons should verify that all information on wagering tickets is accurate before leaving the betting window. Management is not responsible for errors or omissions made on a ticket once the patron has left the betting window.”

Shouldn’t sportsbooks also ensure the information is accurate? Shouldn’t patrons be absolved of responsibility once the ticket is printed and exchanged, too? Maybe — just maybe — operators will go the extra mile to ensure accuracy if mistakes result in stiff penalties. That is how faith in the regulated market is established and maintained.

With all eyes on the nascent US market — and New Jersey in particular — now is the time to establish better rules than the current standards elsewhere. The fact that palps are a fact of the gambling life in markets abroad should not prevent the US industry from demanding better.

Put simply: if FanDuel Sportsbook can’t offer the lines it intends to, it should not be taking bets.