FanDuel Sportsbook Palp Leads To NJ, IN Investigations

Posted on August 4, 2020

A pricing error and subsequent withheld payout on a Major League Soccer game last month led to multiple state investigations for FanDuel Sportsbook.

Multiple bets made on the error in mid-July have not been paid out by FanDuel, which led to an investigation by the New Jersey Division of Gaming Enforcement. ESPN first reported the news Tuesday.

FanDuel Sportsbook had the ability to cancel other bets made in Indiana, which is allowed by the Indiana Gaming Commission. But there could be potential action after a review from its compliance committee.

The outcomes of these issues could have a major effect on trust in the regulated US sports betting market either way.

“We are unable to comment while the DGE is investigating the issue,” a FanDuel spokesperson told LSR on Tuesday.

What was the FanDuel Sportsbook error?

In mid-July, FanDuel Sportsbook listed FC Cincinnati at +5 (-134) against Atlanta United. It’s unclear if FanDuel Sportsbook is claiming the spread or the odds should have been shorter than listed. The investigations also include other soccer matches from overseas.

One industry source told LSR the incorrect line was up for about a day, disputing an account of it only being posted for 15 minutes. In that time, one source said, roughly a dozen bets came in. All but one was placed in New Jersey.

One bettor at The Meadowlands told ESPN he wagered $5,360 after the teller received supervisor approval for the bet. The bettor was then offered the opportunity to make another bet, which he did at $4,640.

Indiana sports betting involved

Another bettor at Blue Chip Casino in Indiana had wagers that would have paid out around $60,000 canceled before he attempted to cash out.

FanDuel did not pay out the bets and continues to hold the original wagers, apparently pending the outcome of the New Jersey investigation.

Sportsbook operators can cancel bets in Indiana if there’s an obvious error. The NJ sports betting investigation could end up setting some precedent for similar errors in the future.

FanDuel previously paid out palp

Unfortunately for FanDuel Sportsbook, this isn’t the first time one of their mistakes grabbed media attention.

FanDuel first introduced novice US sports bettors to a palp – short for palpable error, a Europe-originated term meaning an obvious pricing mistake – in September 2018.

It was the second week of the first NFL betting season for sportsbooks outside of Nevada. And an 18-second mistake accidentally listed the Denver Broncos at +75,000 instead of -600 as they closed in on a win.

FanDuel wanted to pay the winning bettors, including one man that bet $110 to win more than $82,000, at what they thought were the right odds. After a lot of scrutiny and a talk with NJ regulators, the bets were paid out and FanDuel tried to buy back some goodwill with an equal amount to the bet in site credit for numerous customers.

Did FanDuel set precedent?

The DGE seemed content in an email to LSR when FanDuel paid those bets out in 2018:

The Division is encouraged by FanDuel’s actions today. The Division will continue to work with FanDuel and the State’s other licensed sports wagering operators to ensure the implementation of industry wide best practices.

It might be hard for FanDuel to win this dispute after already paying out on a palp before. On the other hand, a different kind of mistake was just forgiven in Nevada.

BetMGM mistakenly allowed bettors to wager on live games at pre-game prices. Nevada gaming regulators eventually allowed BetMGM to void the more than $200,000 in bets.

Note: This article reflects a correction of the originally listed time frame.

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Matthew Waters

Matthew Waters is a reporter covering legal sports betting and the gambling industry. Previous stops include Fantini Research and various freelance jobs covering professional and amateur sports in Delaware and the Philadelphia area.

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