Second Lesson From NJ Sports Betting: Your Reputation Matters

Posted By Steve Ruddock on October 31, 2018

This is Part 2 in a five-part series on early lessons from US sports betting markets. You can read Part 1 here.

It’s safe to say that legal sports betting has taken New Jersey and the US by storm.

The strong early returns in newly legalized markets and prospects of more expansion in 2019 have the gaming industry abuzz.

Unfortunately, that buzz is leading to some hurried decisions and less than perfect legislation. Even though we’re only a few months into this brave new legal sports betting world, there are already valuable lessons to be learned.

In this five-part series, PlayNJ will explore five such lessons:

  1. Customers prefer legal markets.
  2. The black market thrives on the legal market’s mistakes.
  3. Online sports betting isn’t the future, it’s the present.
  4. Sports betting is going to be a high variance market.
  5. Don’t discount the power of a sports-associated brand.

In this installment, we will discuss the importance of the legal market’s reputation and how mistakes might help the black market thrive.

In Part 1 of this series, I delved into the reasons why people prefer legal markets, even if the illegal market is offering better value or a slightly better product.

That said, there’s a tipping point where “legal” no longer sugarcoats the industry’s problems, whether those problems are real or perceived.

Don’t throw bones to the black market

One of the most valuable pieces of advice I’ve ever received was along the lines of a good reputation is hard to build, but very easy to lose.

Legal US sportsbooks would be wise to drill that mantra into each and every employee.

Too many issues, or simply one that is seen as being too far over the line, will make it difficult to pull bettors away from black markets.

Further, it’s impossible to know what transgression will capture the attention of the general public [see: Ethan Haskell and DraftKings] and in the same vein, what transgressions people will simply shrug off.

A series of unfortunate events

Thus far the New Jersey Division of Gaming Enforcement and NJ sports betting operators have done a good job of cleaning up the spilled milk.

Most of the missteps have been committed by FanDuel’s Meadowlands sportbook.

Vault’s closed, come back tomorrow

The first transgression occurred when FanDuel Sportsbook employees told customers that bets for a baseball game would be paid out once the game concluded. The problem was, the sportsbook closed before the game ended (and the vault is locked when the book shuts down), and there wasn’t enough money in the drawers to cover all the betting slips.

At the end of the day the situation was deemed a customer service issue by the DGE, but conspiracy theories were already being bandied about.

Someone stole the pricing gun

The latest misstep was a much bigger issue, eventually requiring FanDuel to dish-out a couple hundred thousand dollars to smooth it over.

During a Sunday Night Football game, the FanDuel Sportsbook listed the Denver Broncos as a 750/1 underdog, instead of the true odds of -600. The line was only up for seconds, but multiple bets were placed on Denver including a $110 bet that would net over $82,000.

FanDuel was getting hammered on social media for trying to cancel the bet due to a technical glitch (something known as a palp in sports betting circles). After it had a few days to gestate and play out in the court of public opinion, FanDuel decided to not only pay the bettors, but give away some free money to turn the public relations nightmare into some positive press.

 Bottom line: Thus far these mistakes haven’t done any lasting damage, but that doesn’t mean the next one won’t.

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Steve Ruddock

Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus is the developing legal and legislative picture for regulated US online poker and gambling.

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