FanDuel

FanDuel’s $82K New Jersey Sports Betting Blunder

FanDuel’s legal sports-betting operations in New Jersey are off to an unusual and bumpy start, with the firm agreeing to pay at least $82,000 in winnings on an erroneously listed NFL line that the new operator wasn’t likely even liable to pay.

The strange situation occurred last Sunday during the National Football League’s Sunday Night Game of the Week between two AFC West Division rivals, the Denver Broncos and Oakland Raiders. During the late stages of the game, a coding error very briefly (for 18 seconds) allowed a massively erroneous line to be printed on an in-play wager to be paid in the event the Broncos scored on their last possession to win the game. Instead of what should have been odds of -600 (betting $600 to win $100), a handful of betting slips were printed with inaccurate odds of +75,000 (betting $100 to win $75,000). The miscoded line seems to have reached the public only at FanDuel’s live sports book at Meadowlands Raceway in New Jersey, and was either not available online or was corrected before any bettor noticed it.

A Newark bettor, Anthony Prince, was among those who few who received a ticket with the unexpected splendid payout possibilities, which seemingly hit when Denver kicked a late field goal to win. Yet Prince — and presumably a few others — were turned away when attempting to collect. Prince took his tale to New Jersey’s News12, which duly reported on the blunder. Prince was seemingly due $82,610 on his $110 wager, except he wasn’t able to collect at the time.

According to the News12 story:

“They said their system had a glitch in it and they’re not obligated to pay for glitches,” Prince says.

Prince says that instead he was offered $500 and skybox seats for three Giants games. But Prince says that he declined.

“The other guy said, ‘You should take what we give you because we don’t have to give you [anything] at all.’ I said, ‘Wow, for real?’” Prince says.

And there the matter stood, with FanDuel issuing the following public statement at the time:

“The wager in question involved an obvious pricing error inadvertently generated by our in-game pricing system. Specifically, near the end of the Sunday afternoon game between the Denver Broncos and the Oakland Raiders, the odds for the Broncos (who had the ball and were trailing by two points at the time) to win were +340 (bet $100 to win $340). The next play, the Broncos completed a 26 yard pass to position themselves to attempt a 36 yard field goal to take the lead in the final seconds of the fourth quarter, clearly positioning the Broncos as the favorite to win. 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. We have reached out to all impacted customers and apologized for the error.”

FanDuel Changes Course, Pays Bets

And then, in an unusual move, FanDuel reversed itself and paid off Prince’s $82,000 slip, plus several others on the same line processed during the same 18 seconds. FanDuel then released a second statement, declaring the following:

“Above all else, sports betting is supposed to be fun. As a result of a pricing error this weekend, it wasn’t for some of our customers. For eighteen seconds, bettors were offered odds paying out 750-1 on the Denver Broncos converting a 36 yard field goal. A 36 yard field goal has approximately an 85% chance of success, so the astronomical odds offered on something highly likely to occur was very obviously a pricing error. 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. We want FanDuel to be a sportsbook for all bettors, and we want sports betting to be fun. So, this one’s on the house. We are paying out these erroneous tickets and wish the lucky customers well. 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 continued to try to make some promotional hay out of the situation by ponying up another $82,000 as part of a random giveaway, $1,000 each being awarded to 82 separate accounts.

Good Marketing, But Legally Unnecessary

While this is a great marketing move, albeit it an expensive one, FanDuel did this entirely to bolster its image in a new market rather than because of any legal liability… because FanDuel had no such liability here. Every sportsbook in the world has standard boilerplate in its Terms and Conditions that declares all such wagers made and accepted to be null and void in the case of an erroneous line being offered, no matter what the reason.

FanDuel’s ToC disclaimer is this:

“In the case of any blatant errors in prices transmitted (including for example where the price being displayed is materially different from those available in the general market and/or the price is clearly incorrect, depending on all of the circumstances), bets will be settled at the correct price at the time of acceptance (or the Starting Price in the case of horse-racing, whichever is the greater). If a bet is accepted by us on an event where offering a price on the event itself (rather than the price) was in error, the bet will be void and your stake will be returned.”

That’s absolutely the industry standard. Mr. Prince should, in the legal sense, never have been paid on the erroneous wager, so it’s a great windfall for him. Dozens of other bettors will receive smaller surprises as well. Meanwhile, FanDuel hopes that a coding blunder and as much as $200,000 in unneeded expenses will turn out to have long-term brand-name benefits. It’s difficult to evaluate whether the extra expense is worth it, though the situation is indeed generating plenty of extra press.

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