DISPUTE RESOLUTION
Beating the odds: resolving sportsbook mistakes fairly WITH IN-PLAY SPORTS BETTING STILL IN ITS INFANCY, MISTAKES WITH ODDS ARE INEVITABLE. MASON SCIONEAUX ASKS WHAT SHOULD HAPPEN WHEN THEY OCCUR
Introduction Since states began legalizing sports betting in 2018, Americans have wagered US$ tens of billions per year on sports. With such a sharp rise in what is essentially a new regulatory market in most jurisdictions, states and the sportsbooks that operate within them have entered unchartered territory. One novel issue that has arisen to date is the resolution of disputes between bettors and the sportsbooks over payouts. Unlike other types of gambling, sports betting is based on subjective odds that are created by Vegas oddsmakers pertaining not only to the outcomes of games themselves, but situations within the games. Regulating odds on win, lose or draw is a simple task, and one that does not invite much error. With mobile sports betting, however, live game betting and even live player propositional bets have exploded in popularity. Setting live odds for wagers on mobile sports betting apps presents more of a challenge for sportsbooks. The bets available on a sportsbook platform
change in real time based on a numerous gameplay factors. This requires sportsbooks to update wagers and accompanying odds as the games themselves play out. Unlike odds published before the start of a game, live odds are set using algorithms that the sportsbooks have created to react to given situations. 1 Those automated procedures are not foolproof, raising some novel questions. What happens when a bettor capitalizes on incorrectly-set odds created by a malfunctioning algorithm? Should sportsbooks be able to cancel the wager, refund the money, and refuse to pay out the winnings? Should the winner be paid out at the incorrectly high odds because, after all, it was the sportsbook’s fault for not setting correct odds? In an era where public trust is still being established, these questions matter. Aware that errors can be costly, some of the country’s largest sportsbooks are already taking precautionary measures, while acknowledging that they are at the mercy of the state regulators that oversee them. Caesars Sportsbook’s House
1 Malcolm Lemmons, 3 Ways Artificial Intelligence is Impacting Sports Betting, BOARDROOM (2023), https://boardroom.tv/artificial-intelli- gence-sports-betting-ai-technology/ (last visited Nov 16, 2023).
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