DISPUTE RESOLUTION
out; in others they have resisted; and in others the regulator has intervened. Whilst this may be expected in the very different circumstances involved, it would nevertheless be helpful to have some agreed principles of contract law and consumer protection to rely upon. How to handle disputes: competing principles of contract law and protecting consumers Gambling wagers form an aleatory contract between the bettor and the casino or book. 9 They depend on uncertain events that are outside of the control of the contracting parties. 10 As such, wagers as legal, enforceable contracts are a novelty, although they do have similarities to other forms of contract and, to that end, the principles of contract law apply. Regulators are required to balance competing principles of contract law with the long- term economic interests of those in the gaming industry. Contra Proferentem The first significant principle is that of contra proferentem (“against the author”), the doctrine that contractual ambiguities are interpreted against the drafter. 11 The object is to protect the non-drafting party, who is often the would-be beneficiary of the ambiguous provision. This doctrine is typically applied to insurance policies which, similar to wagers offered by casinos and sportsbooks, are adhesion contracts drafted by the underwriting companies. 12 As with insurance policies, wagers are placed without any meaningful negotiation by the parties and are entered into by parties of unequal bargaining power; a casino is a sophisticated entity, but a bettor is not necessarily. Gaming regulators should liken incorrect odds to shoddily drawn contract provisions. Betting odds are available on sportsbooks, without any opportunity for negotiation by bettors. Instead, consumers rely on sportsbooks to publish odds that are a) commensurate with the thing being bet upon and the wider betting market, b) fair to the consumer, and c) most importantly, correct. Even with the rise of in-game betting, bettors are still entitled to the reasonable expectation that the odds available on the
sportsbook platforms are correct. As the more sophisticated party to the betting contract, the burden of ensuring that published odds are correct should fall with the sportsbook, not the consumer. Relying upon the sportsbook to have done its due diligence, the bettor should not be punished for a mistake over which it has no control. This holds true where consumers wager on their own parlays as the bettor is incorporating bets already offered on the platform, and the odds will derive from those of similar available bets. Mistake Mistake is another equally demanding principle of contract law which is pertinent. “In law, a mistake is a belief that is not in accord with the facts… More than this, a mistake is an unintentional act or omission arising from ignorance, surprise, imposition or misplaced confidence; it exists when a person under some erroneous conviction of law or fact does or omits to do some act which, but for the erroneous conviction, that person would not have done or omitted.” This doctrine raises important questions. Does mistake in a betting contract make the contract voidable? Do both parties need to have committed a mistake? It stands to reason that a sportsbook would never knowingly publish longer odds as doing so would cost it money. At the very least, then, unilateral mistake always exists when a wager is placed with incorrect odds. So, should that grant sportsbooks the authority to void all such wagers? In 2021, Ryan Cristman sued DraftKings in Michigan court, alleging the sportsbook was refusing to pay him over US$5,000 stemming from a win on a hockey bet. 13 Cristman bet US$915 on the Boston Bruins at +3 in their Feb. 10, 2021, game against the New York Rangers. The odds on the Bruins to lose by 3 goals or less were available at +510. Importantly in that case, Cristman knew the odds were incorrect when he bet (i.e., formed the contract). In fact, he contacted DraftKings before the game to double-check that the odds were right and called the wager “free money.” DraftKings, not yet realizing that the odds were incorrect, told Cristman that they were right. The Bruins won
9 Aleatory Contract Law and Legal Definition, US LEGAL (undated), https://definitions.uslegal.com/a/aleatory-contract 10 John T. Holden & Ryan M. Rodenberg, Modern Day Bucket Shops? Fantasy Sports and Illegal Exchanges, 6 TEX. A&M L. REV. 619, 623 (2019). 11 11 WILLISTON ON CONTRACTS § 32:12 (4th ed. 2023). 12 Id. “A ‘contract of adhesion’ is a contract wherein a party in superior bargaining position dictates the contract term to the weaker party on a take it or leave it basis without any reasonable opportunity for negotiation.” Lenz v. FSC Securities Corporation, 414 P.3d 1262 (2018). 13 Class Action Compl. & Demand for Jury Trial, Cristman v. DraftKings, Inc., No. 2:21-cv-11092-SDD-DRG (E.D. Mich. May 12, 2021).
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IMGL MAGAZINE | APRIL 2024
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