Predatory Practices? NJ Sportsbooks Caught Encouraging Players To Cancel Withdrawals And Gamble On

Posted on January 14, 2021
Posted By on January 14, 2021

The New Jersey Division of Gaming Enforcement (DGE) has threatened fines and regulatory action against sportsbook operators who encourage players to reverse withdrawals.

In a letter published Wednesday, the DGE said it investigated the area following a high volume of player complaints.

It found operators were often delaying withdrawals unnecessarily and offering bonuses for players to cancel withdrawals and continue gambling.

Both practices contravene the state’s gaming laws.

As the DGE wrote: “Operators should clearly understand the Division will take regulatory action and impose civil penalties whenever patrons are improperly encouraged or incentivized to rescind their withdrawal requests to resume gaming activity.”

The report did not name any individual operators.

Reverse withdrawals could be a marker of problem gambling

Players are still allowed to cancel withdrawals, as long as they do so without inducement.

But even that caveat is controversial in the eyes of responsible gambling experts. The UK Gambling Commission recently told UK operators to stop offering reverse withdrawals.

In a statement, the commission said reverse withdrawals were a flag for potential gambling harm. That opinion is supported by “academic research, lived experience and expert advice,” the commission added.

Players entitled to funds immediately

The DGE also pointed out players were entitled to their funds “without any delay longer than needed to perform an anti-fraud or anti-money laundering check.”

The regulator didn’t specify an acceptable timeline. However, the DGE investigation found some customers were waiting two weeks to get access to their money. The regulator said operators were deliberately dragging out withdrawals in the hope players would cancel and begin wagering the funds.

“Such practices are inconsistent with the intent of the rules,” the regulator said.

Dark side of growth

The letter was published the same day as New Jersey posted an all-time high for sports betting metrics in December. But the DGE findings suggest that growth may not be entirely healthy if built on predatory practices.

Keith Whyte, the executive director of the National Council on Problem Gambling called on the DGE to release the names of the offending operators.

“There are some serious responsible gambling concerns here,” Whyte said. “Especially around the solicitation of play during arbitrarily extended withdrawal times.”

Whyte said the NCPG would be updating its internet gambling standards to reflect the risks here. One possible option, Whyte said, was a self-exclusion button for reverse withdrawals.

I.e. when a customer withdraws, they could tick a box saying “don’t let me reverse this transaction,” and that would be irrevocable.

Photo by Dreamstime
Brad Allen Avatar
Written by
Brad Allen

Brad has been covering the online gambling industry in Europe and the US for more than four years, most recently as the news editor at EGR Global.

View all posts by Brad Allen
Privacy Policy