CINCINNATI — Garrett Price hit it big on the first game of the NBA season five months ago.
“We went nuts,” said Price, a Newark resident who bets regularly on multiple sportsbook apps. “There was pandemonium in my house when that hit because you turned a $100 bet? Yeah, a $100 into $14,000. That’s a pretty good night.”
But that was before Draft Kings canceled his bet as an “obvious error.”
Ohio’s sports-betting law allows bets to be voided for obvious errors as long as sportsbooks follow their house rules and “clearly convey the reason for the cancellation,” said Jessica Franks, spokeswoman for the Ohio Casino Control Commission.
Price said Draft Kings gave him an explanation. He isn’t sure about its clarity.
“Whether it was their algorithms, their software, somebody pressing buttons — I have no idea who or how — but somewhere on Draft Kings, something went wrong,” Price said. “And because of that, they wouldn’t pay the bet.”
Sportsbooks have voided more than $77 million in wagers since Ohio legalized sports betting in January 2023. That’s 0.91% of the $8.5 billion gambled in the 13 months ended Jan. 30, according to the WCPO 9 I-Team’s analysis of state data.
Those refunded bets are barely a blip on the balance sheets of the nation’s largest sportsbooks, but the payouts they prevent are much bigger — and mostly unknown. That’s because most states don’t scrutinize voided bets very closely and rarely release financial information about them.
“Most defer to the sportsbook to void bets due to obvious errors,” said Ian Messenger, CEO of the Association of Certified Gaming Compliance Specialists in Toronto. “Massachusetts, Pennsylvania and New Jersey require sportsbooks to seek approval before they void bets. New Jersey takes a very tough approach and often requires sportsbooks to pay out in cases of obvious errors.”
But Price’s bet was one of hundreds canceled by the same mistake, which Draft Kings blamed on a third-party vendor when it sought regulatory approval to void the bets in Massachusetts, Connecticut and New Jersey last fall.
That’s how we know the following:
- Connecticut’s Department of Consumer Protection rejected a Draft Kings request to void 81 bets, which caused the company to pay out $151,000 in winnings from an Oct. 24 NBA game between the Denver Nuggets and Los Angeles Lakers.
- New Jersey’s Division of Gaming Enforcement denied a Draft Kings request to void 215 winning bets from that Oct. 24 game but didn’t disclose the amount of payouts required by the company.
- Draft Kings sought permission to cancel $4,182 in bets by 138 people in Massachusetts. That would have cost the company $575,437 if the Massachusetts Gaming Commission hadn’t authorized the voids. It required the Draft Kings to pay bettors three times their original bet, or $15,546, instead.
- Price was one of four bettors who asked the Ohio Casino Control Commission to investigate Draft Kings for its handling of bets from the Lakers-Nuggets game. They claimed they were owed a combined $36,095.
"I actually never got a response (from Ohio),” Price said. “I would have liked to at least hear why they weren’t going to be able to intervene on our behalf. We really just kind of got ghosted in the whole process so, yeah, it was a little disappointing.”
Franks said Ohio did not investigate the Oct. 24 NBA bets, but it did cancel two voided bets sought by sportsbooks last year. She did not identify the sportsbooks but said 10 bettors were affected by the decisions.
Could one error 'cripple' a sportsbook?
Draft Kings gave a detailed explanation of the Oct. 24 error to the Massachusetts Gaming Commission, where the staff recommended approving the sportsbook’s request in a Nov. 14 memo. It said Sportcast, a third-party vendor that supplies Draft Kings with betting lines, offered a series of first-quarter bets that were “interpreted as full-game markets” by the Draft Kings computer system.
That meant bettors would win if LeBron James, for example, got more than 8.5 points, 2.5 rebounds or 6.5 assists for the entire game. It’s an attractive bet because James averaged 25.4 points per game last season, with 7.2 rebounds and 8.1 assists per game.
The Massachusetts memo said Draft Kings warned Sportcast that additional “development work was needed to handle these markets,” but the vendor uploaded the friendly betting lines anyway. Bets were offered for 13 minutes about three hours prior to game time.
Its house rules allow Draft Kings to void “bets accepted during technical problems” and “bets placed at odds that are materially different from those available in the general market at the time the bet was placed.”
But the company made other arguments in favor of its decision to void those Oct. 24 bets in a pair of November meetings of the Massachusetts Gaming Commission.
“The legitimacy of sports wagering depends on establishing clear rules governing how wagering will be conducted,” said Jacob List, senior director of regulatory operations for Draft Kings. “If operators cannot rely on established and approved rules being enforced as expected, the wrong error could financially cripple the operator.”
List also told regulators that a small but sophisticated segment of bettors is exploiting sportsbook mistakes.
“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,” List said. “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.’”
Massachusetts Gaming Commissioner Jordan Maynard was sympathetic to that argument, but only to a point.
“It’s in the best interest of the commonwealth not to have (social media) trolls take advantage of your company,” Maynard said. 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.”
Commissioner Brad Hill raised another objection to Draft Kings by questioning why it continued doing business with Sportcast after a similar mistake led to voided bets in New York in January 2023.
“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,” Hill said.
'A bet laid should be a bet played'
Although Massachusetts allowed Draft Kings to erase most of its liability from the Oct. 24 Lakers-Nuggets game, its regulatory approach led to better outcomes for gamblers than Ohioans received. Not only did Massachusetts require refunds of three times the original bet, but Draft Kings announced “discretionary bonuses” for 14 of its Massachusetts customers.
“Draft Kings informed (the commission) the status of these wagers began creating customer friction,” according to a Nov. 27 internal memo from the state. “Draft Kings attempted to alleviate the resulting friction by issuing bonus bets to any customer they believe had not intentionally abused the incorrect odds. This was defined as a customer’s parlay that contained less than 50% of the incorrect odds.”
That remedy was never offered to Price, a fantasy sports podcaster whose Dynasty Nerds platform has 14,000 subscribers and 46,000 followers on X, formerly known as Twitter.
“The frustrating part was those lines had changed before the game started,” Price said. “So, you would think, if they realized that this was an error, they would have voided the bet before the game even started. But instead, they waited until after the game was over. The bet already hit. And then they told me that they weren’t going to honor the bet.”
Price said he was not aware of the controversies surrounding the Oct. 24 bets until the I-Team contacted him. And he didn’t learn about the favorable betting lines from social media. He just found them on the Draft Kings app and took advantage of what the company offered.
“They have the right at any time to void any bet if they deem that the odds are placed incorrectly,” Price said. “And so, obviously their legal team did a good job of kind of covering them in those instances.”
Messenger thinks gaming regulators should take another look at their rules because of the evolving nature of the sports-betting industry, where high-stakes parlay bets are increasing in popularity. These complicated bets are more difficult to underwrite. But friendly rules on voids allow sportsbooks to pull the plug when bets get too costly to pay out.
“The ‘obvious errors’ clause is in many cases far too broad, and covers issues caused by human error – without any real incentive for the sportsbook to address the underlying cause,” said Messenger, whose trade association teaches gaming compliance professionals about fraud, money laundering, internal audits and surveillance systems. “Something that is becoming more acute as sportsbooks get more complex in their offerings – the excuse of ‘technical problems’ is becoming more common where sportsbooks are utilizing the services of third-party vendors.”
To Price, the answer is simple.
“A bet laid should be a bet played,” said Price. “It’s an agreement between myself and whatever gaming company I’m making the wager with.”
