DISPUTE RESOLUTION
Rules includes the provision: “We reserve the right, pending regulatory approval, to correct any obvious error made on a wager placed in one of our betting Live markets and settle at the correct odds or terms, which were available with Caesars Sportsbook (absent the obvious error) at the time the wager was struck.” 2 This approach may be prudent but is it legal? What constitutes “the obvious error,” and does customer confidence suffer if such a policy is followed too rigidly? Background and some big payouts to date Since the abolition of PASPA in 2018, U.S. states have rapidly legalized sports betting. Today, 37 states and the District of Columbia allow sports betting, and of those, 27 states and D.C. have legalized mobile sports betting, which allows for remote wagering from a smart phone or other device. The regulatory regimes that oversee sports betting vary by state, with some states having a gaming commission whilst others rely on their state lottery boards. This alters the way that disputes are handled. For example, Mississippi and Louisiana, which had established gambling regulatory bodies in the early 1990s when they legalized riverboat gambling, gave those bodies additional oversight of sports betting. 3 Meanwhile, in Tennessee, which had no pre-existing commercial or casino gaming prior to 2019, sports betting is overseen by the newly-created Tennessee Sports Wagering Advisory Council. 4 Despite the relative youth of the sports betting market in most states, there have already been a number of high-profile disputes between bettors and sportsbooks. 2023 DraftKings Incident On NBA Opening Night on October 24, DraftKings’ single- game parlay vendor, Sportcast, sent what were supposed to be first-quarter wagers to DraftKings to be published on the online sportsbook. 5 Due to a miscommunication, the wagers were made available as full-game over/under totals. 6 Bettors
capitalized on slam-dunk bets, such as Lebron James to score over 8.5 points, get over 2.5 rebounds, and have over 6.5 assists for the whole contest. The incorrect totals were available in multiple states where DraftKings is a licensed sportsbook operator and in the 13 minutes before DraftKings noticed the error, 137 bettors in Massachusetts placed 178 bets totaling US$4,182. The largest of these was a seven-leg parlay that was set to pay out US$150,000. Because the bets were all successful, DraftKings could suffer a liability of over US$575,000 in that state alone. New York, Colorado, and Indiana swiftly allowed DraftKings to void bets in those states. Connecticut regulators denied DraftKings’ request to void the winnings there, forcing DraftKings to honor about eighty bets totaling US$151,00. Massachusetts took its time to reveiw the situation and, interestingly, the Massachusetts Gaming Commission ruled in November 2023 that Draftkings could partially void the wagers but must pay three-times the initial wager to the bettors involved. 7 2023 BetMGM Incident In the summer of 2023, a Virginia high school teacher and soccer coach, Kris Benton bet a same-game parlay in the 2023 Women’s World Cup. He placed a US$3,250 wager at odds of +6600 on Netherlands to score first and have the most corner kicks in its game against Vietnam despite the Europeans being heavy favorites. His wager should have resulted in a payout of US$214,000, however, BetMGM’s terms and conditions allowed it to revise winnings with obvious errors. Instead of honoring Benton’s win at the correct odds, it simply returned his wager. 8 After the story went viral on social media, and the Virginia Lottery stepped in to review BetMGM’s decision, the sportsbook decided to honor Benton’s victory and paid out the $214,000. These were just two of several high-profile incidents involving Caesars and FanDuel. In some cases, the sportsbooks judged the losses due to poor publicity to be greater than the cost of paying
2 Some House Rules, CAESARS ENTERTAINMENT (undated), https://caesars.com/sportsbook-and-casino/az/support/house-rules/ 3 MISS. CODE ANN. § 75-76-7; Fantasy Contest Act, H.B. 967, Regular Session 2017 (Mississippi 2017) 4 TENN. CODE ANN. § 4-49-105; State of the States 2023, supra note 1. 5 Bill Speros, Massachusetts Sports Betting: DraftKings seeks to void $575k payout on “error,” BOOKIES.COM (2023), https://bookies.com/news/ massachusetts-sports-betting-updates (last visited Nov 28, 2023). 6 Robert Linnehan, Massachusetts Mulling over DraftKings’ Request to Void 178 Bets Placed on Incorrect Totals, SPORTS BETTING DIME (2023),
https://www.sportsbettingdime.com/news/betting/massachusetts (last visited Nov 28, 2023). 7 https://sportshandle.com/massachusetts-gaming-commission-allows-draftkings-void-wagers/ 8 Jagajeet Chiba, BetMGM: Sorry Our Bad, Won’t Pay $214K in Winning Bets to Teacher, GAMBLING 911 (2023), https://www.gambling911.com/betmgm-wont-pay-teacher.html
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IMGL MAGAZINE | APRIL 2024
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