Massachusetts regulators and lawmakers are taking a closer look at sports betting, and they’re not liking parts of what they see.
One such issue has to do with sportsbook operators voiding bets due to what it calls “obvious errors” — but that’s not the only issue.
Bay State regulators have also raised concern over operators targeting problem gamblers who are big spenders. Given these new developments, Massachusetts sportsbooks could very well see stricter regulations in the near future.
Massachusetts sports betting regulators are losing patience with voided bets
Late last year, DraftKings listed incorrect odds on a particular NBA matchup between the Denver Nuggets and Los Angeles Lakers. Once bettors made the discovery, some placed large wagers expecting a big payday. DraftKings obviously was not interested in paying out bettors on odds that were incorrect.
When analyzing the numbers, it is easy to see why. In total, 138 Massachusetts bettors placed $4,182 worth of bets on those incorrect odds in 13 minutes. These bets would have paid out a whopping $575,437. That made the choice to void these wagers easy for DraftKings.
This situation is precisely why the ability to void bets exists, according to DraftKings Senior Director of Regulatory Operations Jacob List:
“When an error affects multiple markets and customers notice and they parlay them all together that’s an indication that the customers clearly know that’s an error. There’s also instances of customers talking on Twitter and other forums. They’re saying stuff along the lines of, ‘Huge error, go bet it on Draft Kings.’”
Regulators understood this point, but only to a certain extent. Chair Jordan Maynard questioned if any incorrect odds that benefitted the operator would be handled the same way. Maynard said:
“It’s in the best interest of the commonwealth not to have (social media) trolls take advantage of your company. (But) I’m not convinced that if by some miracle, LeBron James stayed under eight points that game, that you would have come in and asked to void this.”
Sportsbook errors could cause an operator to go bankrupt if not voided
List countered that point by explaining how these incorrect odds being honored could destroy a sports betting operator. Considering how DraftKings could have lost over $500,000 in less than 15 minutes in this circumstance, List’s perspective has merits as well:
“If operators cannot rely on established and approved rules being enforced as expected, the wrong error could financially cripple the operator.”
In Massachusetts, sports betting operators must gain approval from the Massachusetts Gaming Commission before officially voiding the wagers based on “obvious errors”. Saying the commission was split on this topic is putting it lightly; especially considering this is not the first time DraftKings has had an issue with incorrect odds being posted.
Commissioner Brad Hill used that fact as his reasoning for voting against DraftKings.
“The company made an error a few months ago and then made a second error. The same error. So, I’m leaning toward not allowing these bets to be voided.”
Ultimately, the 3-2 vote narrowly favored DraftKings but came with stipulations as well. While all $575,437 would not have to be paid out, the Massachusetts Gaming Commission required DraftKings to compensate bettors with a payout three times their original wager. That way, bettors get a bit of cash for their frustrations and DraftKings only takes a $15,546 hit instead of over half a million dollars.
DraftKings isn’t the only operator now under the MGC’s watchful eye. PENN Entertainment listed an error on a football game that stayed live for 90 minutes after its finish this past fall. This amounted to 257 wagers worth roughly $48,000 placed on its site — known as Barstool Sportsbook at the time.
On top of all these issues with voided bets, Massachusetts has recently found itself up against another big sportsbook operator issue.
Massachusetts regulators also share concern over sportsbooks targeting big spenders
On March 19, Connecticut Senator Richard Blumenthal penned a letter to Massachusetts sports betting operators and minced no words. The reason for this being, that Blumenthal is a big responsible gambling advocate and a regular contributor toward Massachusetts’ goal.
In the letter, Blumenthal accused Massachusetts sports betting operators of targeting problem gamblers and big spenders with enticements.
“Sports betting companies are exploiting, targeting, and taking advantage of vulnerable problem gamblers, especially during these coming weeks. How? They are enticing those problem gamblers to do more. They are enticing problem gamblers by targeting them based on the data they collect in real time about who is betting how much and where, and they are collecting that data and then targeting the most vulnerable problem gamblers to do more, leading them down dark paths to addiction. And the reason very simply is that they want to make more money.”
Blumenthal followed that statement by issuing a request to the MGC, saying:
“I urge you to leverage the data you collect to identify problem gamblers and proactively provide these individuals with services, such as a confidential advisor, to help them access treatment. You should also quickly and frequently direct potential problem gamblers to transparent and easily accessible information on self-exclusion so they can remove themselves from your platform. Further, I demand you end any promotions or marketing practices that encourage ‘high-value’ gamblers to continue spending money through exploitative bonuses, credits, and enticements. Instead, you should divert the resources spent on these problematic practices to programs dedicated to treating individuals with gambling addiction.”
In response, seven of the major sports betting operators – including DraftKings — unveiled the Responsible Online Gambling Association. Its goal is to increase responsible gambling awareness through research, education, marketing campaigns, and a certification program.
