What Now? BetMGM, Nevada Sports Betting Regulators Sort Past-Post Mess

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Should BetMGM be forced to pay out on bets that were placed after the event had started, thus giving the bettor a material edge?

That’s the question the Nevada Gaming Control Board is currently trying to answer. As first reported by ESPN, bettors won nearly $250,000 on Asian baseball games at Bellagio betting terminals. 

An error in the BetMGM system meant the start times of the games were programmed wrong and customers could bet pre-games prices well after the games started.

So how will the regulator rule? Crucially, neither MGM nor the NGCB has any rules relating to “past posting.”

However, the consensus among industry experts contacted by LSR was that MGM had a good chance at getting the bets voided.

Bets could be voided

“Past-posting is likely a situation where bets will be refunded, not paid, in Nevada,” said Joe Brennan, CEO of data firm SportAD.

Operators, of course, are required to have sufficient tech to know when a game starts. But Brennan suggested Gaming Control might be more lenient because it was Korean and Taiwanese baseball games, offered for betting because of the coronavirus pandemic.

It’s important to note the exact nature of the bets and the bettors themselves are still not public, meaning the situation is still a little murky.

“It’s not black and white,” said USBookmaking’s director of sportsbook operations Robert Walker. “I would think Gaming will take a look at the scores at the time of the wagers. If wagers had a chance to lose, then I think they must pay.  If they had no chance to lose, I think Gaming would side with the book.”

Obvious human error at BetMGM?

According to ESPN, around 50 wagers were placed, including a bet on over 9.5 runs in one game after five runs were scored in the first inning. One team was also backed as an underdog despite leading 10-2.

Nevada generally sticks to the rule that “tickets stand as written,” but bets can be voided if there has been an “obvious computer, mechanical, technical or human error.”

Crucially the BetMGM system on the Bellagio terminals required game start times to be entered manually. That suggests the wrong times might indeed qualify as obvious human error.

I think they should refund the bets, pay a nice-sized fine, and figure out the time zones between Korea and (Nevada,)” added Brennan.

What does this mean for wider US sports betting?

Beyond just the case itself, there could be wider repercussions about how the US sports betting industry thinks about voiding bets.

US sports bettors to date have shown themselves to be more hostile to the palp rule than their European counterparts. Recall the FanDuel incident last year where the operator paid out six figures on a clear pricing error. These mistakes will never go away but a huge number can be avoided with just a small amount of investment.

In Europe, voiding ‘palpable’ errors is industry standard and acts as something of a safety net. Operators are happy to throw up new products and markets, safe in the knowledge that if something goes awry, bets can be voided. As a result, firms can offer a broader range of products, without widening margins.

After all, if you’re going to be forced to honor $250,000 in past-post bets, maybe in the future you offer 40-cent moneylines on the KBO to protect yourself. Or maybe you don’t offer KBO at all, in which case both the operator and recreational punters lose out.

Industry needs to do some self-assessment

However, that ‘palp’ safety net can also discourage progress. Why would you bother correcting mistakes if there are no consequences to them? 

“It’s probably not a coincidence this happened after MGM in Nevada moved onto the European GVC platform,” said Ed Miller, co-founder of odds feed Deck Prism Sports. “From my point of view, the palpable error rule is lazy. It’s the entire reason my company exists. If your software is buggy, fix it. It’s not always easy but ‘palps’ give operators no incentive to change.”

Indeed, for an industry built around risk management, the risk assessment of new products – like KBO betting – is often minimal.

“Part of the assessment is basically we can void the bets,” said one UK-based trader, who asked not to be named. “In the long term, it would benefit the industry to risk assess each product we offer beforehand and have more intelligent systems to flag up when you might have a problem.”

Mistakes must be spotted sooner

This second point maps easily onto the MGM case. How can 50 bets have been placed before anyone realized something was amiss? Why were start times entered manually?

“That should have been caught after the first wager,” Walker added. “The reality is MGM will have to tighten up their procedures.”

Even if BetMGM escapes this incident financially unscathed, US-facing firms would be smart to profile their own products as diligently as they profile their customers.