Speakers at gaming conferences tend to measure their remarks, but every now and then someone will make some headlines.
At G2E 2018 comments by David Rebuck, director of the New Jersey Division of Gaming Enforcement, captured the attention of the gaming media.
Rebuck’s comments were in regards to the technical error that occurred at FanDuel Sportsbook back in September, and how the DGE will handle these issues going forward. His viewpoint differed from FanDuel’s interpretation of how the rules account for errors.
Suffice it to say, those comments caused quite the buzz.
The backstory on ‘palps’ at NJ sportsbooks
The saga began when a pricing error (commonly referred to as palps in the sports betting community) led to a wildly inaccurate in-play line on the Sunday Night Football game between the Denver Broncos and the Oakland Raiders. Instead of the true odds that had the Broncos a -600 favorite, FanDuel Sportsbook somehow listed the Broncos as 750/1 underdogs.
The mistake was listed for all of 18 seconds. That was long enough for a few bettors to place a wager, including a $110 bet that would net $82,000.
After the situation was made public, FanDuel issued a statement explaining the situation:
“The wager in question involved an obvious pricing error inadvertently generated by our in-game pricing system… At that moment in the game, our system updated the odds and erroneously posted a price of +75,000 on the Broncos to win the game (bet $100 to win $75,000) when the correct odds for the Broncos to win the game at that point in time were -600 (i.e., bet $600 to win $100). A small number of bets were made at the erroneous price over an 18 second period. We honored all such bets on the Broncos to win the game at the accurate market price in accordance with our house rules and industry practice, which specifically address such obvious pricing errors.”
Bets paid but questions remain
Despite its house rules, FanDuel took a lot of heat and eventually relented to outside pressure and paid the bets in full, with an added bonus of crediting 82 random accounts with $1,000.
As it did the first time, FanDuel’s second statement on the situation highlighted its house rules:
“These kinds of issues are rare, but they do happen. We have clear house rules about how such obvious pricing errors are treated, which is to pay winners at the correct price.
“For those familiar with the industry these rules are understood, but we realize a lot of our customers are new to sports betting and were not familiar… Going forward, we are working with the New Jersey Division of Gaming Enforcement to improve our processes and procedures. We will also work with others in the industry on educating bettors on these and similar instances and how they work.”
FanDuel’s decision to honor the wagers brought the incident to a close, but it didn’t answer the overarching question: What’s the DGE policy on palps?
How palps are handled around the globe
While uncommon, errors of this sort do happen at sportsbooks.
How they are handled varies based on the jurisdiction:
- In the UK, operators are given a lot of leeway to void palps.
- Italy and France fall on the side of the bettor, and operator mistakes are usually paid out in full.
What the DGE director said at G2E
New Jersey regulations don’t specifically address palps, but the regulations do contain generalized language that requires DGE approval to unilaterally cancel bets.
However, as FanDuel noted in its original statement, its house rules (approved by the DGE) are very clear regarding technical errors. As such, the DGE’s approval of FanDuel’s house rules appears to meet the prior approval requirement.
And that’s why Director Rebuck’s G2E comments caught many people off-guard:
DGE’s handling of palps still unclear
The “no safe haven” comment seems very clear; Operators will have to honor all betting slips.
Or maybe not.
The FanDuel house rules haven’t been altered, and subsequent comments and actions by the DGE indicate New Jersey’s palp policy is still being worked out.
Following the FanDuel hiccup, the DGE added several layers of internal controls to reduce the possibility of human error going forward. These policies are aimed at reducing risk and forcing the operators to improve oversight of their systems.
In a statement to Play NJ, the DGE said:
“The Division of Gaming Enforcement is closely monitoring the issue of operator error. The Division has made clear to operators that they are expected to impose meaningful internal controls that protect New Jersey consumers, and the Division is evaluating whether additional measures are necessary to safeguard the growing sports wagering market in our state.”
Excuses won’t be accepted
If the DGE is successful in limiting palps, and pricing errors go from uncommon occurrences to extraordinary events, the Division is likely to handle them on a case-by-case basis, carefully weighing the circumstances.
From the sound of it, the DGE is hopeful that the beefed-up internal controls will all but eradicate these types of pricing errors. As such, the “no safe haven” comment appears to be a warning to operators: Lax policies won’t be tolerated, and you can’t treat technical errors as a get-out-of-jail-free card.
Bottom line: Be better, because the DGE will not accept “it was a palp” as an excuse if you’re not trying.