DISPUTE RESOLUTION
the game, 3-2, but DraftKings identified Cristman’s wager as a loss, saying that the Bruins were supposed to be listed at -3. DraftKings refunded the bet and offered Cristman US$100 in site credit. 14 Cristman sued, and while the disposition of his case is unknown, the facts present an interesting challenge. It would be a very fact-intensive and difficult process to determine, in every dispute, whether the bettor knew that the odds were wrong and took advantage of the sportsbook, or whether he or she was simply ignorant to the mistake and bet in good faith. Indeed, it would place a heavy burden on sportsbooks and regulators to resolve that fact question in every investigation. Typically, a contract is not voidable for a unilateral mistake, one made by only one party. To be voidable, the mistake must be mutual, and both parties must be mistaken. “Moreover, a clear mistake by one party, coupled with ignorance by the other party, is not a mutual mistake and will not be corrected. However, when the mistake of one party, with respect to the meaning of some material provision of the signed contract, is accompanied not only by the other party’s knowledge but, also, by that other party’s silence, this is treated as the equivalent of a mutual mistake and equity will reform that instrument.” 15 In other words, a contract is voidable for a unilateral mistake if the non-mistaking party is aware of the mistake and withholds its knowledge of the mistake (takes advantage of its knowledge of the mistake). 16 Under general principles of contract law, DraftKings could have attempted to void Cristman’s bet for lack of good faith in taking advantage of his knowledge that the available bet was incorrect. However, Cristman did not withhold his knowledge of the mistake. He contacted DraftKings and only when a DraftKings representative mistakenly assured him that the odds were correct, did he place his bet. Whilst this demonstrates good faith, Cristman’s wager may still be voidable. It is all about the intent of the bettor. If the sportsbook publishes incorrect odds, this is a “clear mistake” by the sportsbook. If
the customer bets not knowing that the odds of the wager were wrong, then that is not a mutual mistake and would not be corrected. Alternatively, if, as in the Cristman case, the bettor knows that he or she is capitalizing on false odds and does so to take advantage of the sportsbook’s mistake, contract law tells us that such a bet will be voidable by the sportsbook as “equivalent of a mutual mistake.” Clearly making such an individual determination in each case is something sportsbooks and regulators are likely not willing to undertake due to time and investigative costs. Instead, by validating victorious wagers and paying them out at fair market rates, sportsbooks and the regulators that oversee them are promoting consistency and fair dealing, protecting consumers, and preserving the long-term economic interests of sportsbooks. Lotteries: an imperfect guide The relative youth of sports betting in many markets and the even shorter history of novel remote betting via computers, mean there is limited case law. The only form of legal gambling that has had a longer connection to technology is state lotteries. While these have been the subject of scores of legal actions brought by prospective winners, a very limited number of them have been successful. 17 That being said, there is no doubt that the purchase of a lottery ticket forms a valid contract, 18 although one must differentiate between lotteries and sportsbooks in light of numerous cases where claims arising from alleged technological malfunctions or other processing errors have been rejected. In some cases where courts rejected lottery plaintiffs’ claims, the malfunction at issue was one involving the printing of lottery tickets done by third- party companies apart from the actual state-sanctioned lottery game. 19 This differs fundamentally from the sportsbook context in two important respects: 1) sportsbooks are private enterprises, unlike states or state-sanctioned lottery corporations (which are quasi-government agencies), and 2) although sportsbooks use
14 Brian Pempus, Gambler Knew Odds Were Too Good To Be True, But Sues Draftkings In Federal Court, MIBETS (2023), https://www.mibets. com/draftkings-michigan-lawsuit/ 15 27 WILLISTON ON CONTRACTS § 70:9 (4th ed. 2023) (emphasis added). 16 See CAL. CIV. CODE § 1578 17 George L. Blum, Annotation, State Lotteries: Actions by Ticketholders or Other Claimants Against State or Contractor for State, 48 A.L.R. 6th 243 (2009). 18 See Georgia Lottery Corp. v. Patel, 349 Ga. App. 529, 826 S.E.2d 385, 389 (2019) (exhibiting that purchasing a lottery ticket forms a valid con- tract). 19 See Moore Business Forms, Inc., 698 So. 2d at 612. But see Leavy v. Games Management Services, 451 N.Y.S.2d 544 (App. Term 1982) (recovery possible if plaintiff could show that its loss was the result of the negligence of a third-party contractor of the state lottery, where a winning lottery entry was allegedly disregarded because contractor did not record the winning numbers on microfilm at the lottery headquarters).
Made with FlippingBook flipbook maker