The DraftKings Sports Betting National Championship was supposed to be a celebration of the possibilities for the future of US sports betting.
Instead, it ended with controversy and some participants and observers crying foul.
Here’s a rundown of what went down, from what Legal Sports Report has been able to piece together:
DraftKings Sports Betting National Championship … before the problems
The first-ever DraftKings Sports Betting National Championship was going along just fine, for the first two days. Held in New Jersey and starting on Friday, the contest featured bettors vying for a piece of a $2.5 million prize pool.
Bettors had to be physically located in New Jersey to participate, as the contest took place entirely on DraftKings Sportsbook’s mobile app.
Handicappers started with a $5,000 bankroll to try to end the contest with the most money in their ending bankroll. Doing so would earn the winning bettor the top prize of $1 million.
You can see a blog of the action here.
On Friday night and Saturday, participants could bet on pretty much anything they wanted. On Sunday, they could only bet on the two NFL playoff games.
And that’s where the issues began.
The final day
On the final day, the New England Patriots were beating the Los Angeles Chargers badly and would go onto win handily.
But the game, which started at 1:05 p.m. Eastern time, took a long time to wrap up, so much so that it nearly overlapped with the game between the Philadelphia Eagles and New Orleans Saints, which was slated to start at 4:40 pm. Eastern. (The first game ended just a few minutes before the second.)
Impact on the sports betting contest
So what does all that have to do with the Sports Betting National Championship? Well, bettors could only place wagers involving the two NFL games. And no wagers could be placed after the start of the second game. Some players, including bettors at and near the top of the leaderboard, had their entire bankrolls in play on the Patriots game.
That meant the money was locked up, in some cases, after the start of the Eagles-Saints game. Bets on the Patriots were in some cases were quickly settled in the DraftKings’ system, but money was not credited to some players in time to wager on the late game.
One of those players was a pro bettor, Rufus Peabody — username “Opti5624” — who ended up finishing the contest in third place. He wagered his entire available bankroll on the Patriots to cover a 3.5-point spread, which they did. He was not credited with the winnings until later:
Balance $0.01. Game: started pic.twitter.com/0uPwb9Gcn3
— Rufus (@RufusPeabody) January 13, 2019
But some bettors did get paid
That, in and of itself, might not be an issue. After all, the rules of the contest clearly state that you could not place a wager after the start of the second game. That the early game would not finish before the start of the late game would have been a possibility no matter what was going on in the DraftKings’ event.
But it appears that some players were credited their winnings from the Patriots game and able to bet on the Saints game.
One example was easily identifiable from DraftKings’ own spreadsheet showing all the bets placed in the competition. The user “Moneylinemikey” bet his entire bankroll of $16,533 on a two-leg bet of the Patriots to cover the spread and over the total of 47.5 points. Both hit, netting him more than $57,000.
He then almost instantly turned around and placed two bets on the Eagles-Saints game, as shown by the spreadsheet.
The image in the second tweet below illustrates the issue:
— Julien Skyfish (@TheFoodSnobFrog) January 13, 2019
DraftKings was clearly aware of the issue, as people on social media were loudly protesting the outcome.
Here’s a statement from a DraftKings’ spokesperson:
“The first ever Sports Betting National Championship was an incredibly thrilling event. We recognize that in the rules the scheduled end of betting coincided very closely to the finish of the of Patriots-Chargers game.
While we must follow our contest rules, we sincerely apologize for the experience several customers had where their bets were not graded in time to allow wagering on the Saints-Eagles game. We will learn from this experience and improve upon the rules and experience for future events.”
Next steps after the end of the DraftKings’ contest
So where do we go from here? It’s hard to see a great solution.
DraftKings could certainly give Peabody a million. But that might open them up to other potential issues with bettors who experienced the same payment problem.
Peabody said he would have gone on to wager on the Saints — a heavy favorite before winning 20-14 — to win the game. And that would have given him a million dollars.
I’m almost hoping eagles win right now, that way I know I didn’t get screwed out of a million bucks.
— Rufus (@RufusPeabody) January 13, 2019
Of course, the contest can’t be settled on “would haves;” but Peabody also never had a chance even to bet.
The issue likely falls to regulators, namely the NJ Department of Gaming Enforcement. The fact that bettors did not have an equal opportunity to bet in the contest on the final game will likely not sit well with them. Fines or enforcement action by the NJDGE could certainly be in play, pending the outcome of a potential investigation.
DraftKings was trying to do something different and novel with its sports betting championship. But the endgame of the contest and the logistics of running it obviously created a situation that it had not considered. Different rules might have saved it from controversy.
But those are simply excuses. DraftKings is running sports betting in a regulated market. And the way it ran the contest created an unfair advantage and disadvantage for some bettors. There probably need to be, and will be consequences.