Oops! A Massachusetts bettor discovered an error in the system at DraftKings and took full advantage. During this year’s ALCS, bettors could bet on the hit total for the Blue Jays Nathan Lukes.. A savvy bettor figured out that the system allowed him to create parlays that Lukes would get at least 5, 6, 7, and 8 hits. (Obviously, if Lukes got 8 hits, he would get 5, 6, and 7 hits as well.) The bettor bet a total of $12,950 in 27 different parlays, and hit 24 of them. (Lukes actually got 9 hits in the series.)
Normally, betting software won’t let one make parlays like that. But a system glitch allowed him to do so.
The payoff was a total of $934,147.83. DK appealed to the state gaming commission, claiming it was a technical error, and offered to make a payout of $95,742.53, which would have been what the bettor would have won had the glitch not been present.
The state gaming commission basically denied DK’s request and told them to pay the full amount.
The details are better explained in these two links.
This is what I understand from the article. He really wanted to bet that Lukes got 8 or more hits. By adding 7+, 6+, and 5+, the system said that the odds of that are longer than getting 8+, even though, in reality, it didn’t change the odds at all.
So, let’s say it was 3-1 that he got 8+ hits, 2.5-1 for 7+, etc. The system, I guess, did the root sum squared or something, as if they were all uncorrelated, even though getting 8+ would be perfectly correlated with 7+, coming up with 10-1 or whatever for the parlay.
Cool. Then, he bet on some nearly sure winners to do that same thing 27 times and won 24 of them.
My understanding was that all bets are gentlemen’s agreements and not actually legally binding. Or at least they are in the UK (I was definitely taught that at school), and US law being based on British law I thought the same applied
Bahaha. I’m imagining a page folded in half and slid across the table at negotiations.
As a token of our charity and goodwill and, in light of the unfavorable press we’re certain to receive, we think you’ll be very happy with this, our final offer.
A bet with a commercial sportsbook is meaningless unless it’s fundamentally a legally enforceable contract.
And thus Draft Kings’ argument that “We shouldn’t have to pay because a bettor was smarter than we wish he had been” is doomed: You agreed to the contract - you’re bound by it.
I’m really glad the MGC told DraftKings to go to hell. They screwed up, too bad for them. And their accusations that the winner engaged in “fraud and unethical behavior” that was unfair to the “honest players” broke my irony meter.
But what was up with the first article linked? Is that a trade website or something? I couldn’t believe how pro DraftKings they were.
Companies that base their business model on gambling don’t tend to give the gambling public that option. They always insist you pay up front, after the fact you can try and convince the casino that it doesn’t have to honor your gentlemen’s agreement, but they have your cash
Not really if betting companies made a habit of saying “nah just kidding” when they lost bets they would not get many repeat customers whatever the law says
I looked it up, and it looks like the Gambling Commission in Great Britain only manages raffles, lotteries, and fundraising.
I assure you that similar regulatory agencies in the United States handle much more than that, including betting. In fact, both DraftKings and FanDuel decided to not do business in the state of Nevada (home to Las Vegas, the gambling capitol of the US) because the way they operate would be illegal in Nevada.
“It has been made clear to the board that Flutter Entertainment/FanDuel and DraftKings intend to engage in unlawful activities related to sports event contracts,” Control Board Chairman Mike Dreitzer wrote in the order.
Instead, they prefer to do business in “prediction markets” which are handled by federal law in the US.
“As part of our ongoing commitment to regulatory compliance, we have withdrawn our inactive application in Nevada,” Jen Aguiar, DraftKings’ chief compliance officer, said in an emailed statement. “Prediction markets are federally regulated by the Commodity Futures Trading Commission, and we remain dedicated to working collaboratively with regulators to uphold the highest standards of integrity in our operations.”
Not only is betting legally binding, laws around it can be pretty bureaucratic.
Though is it the case that it makes bets legally enforceable contracts? Or is it just that were Draftkings to go “screw you we ain’t paying” then the commission could take away their license to operate in the state?
It’s a really poor decision. Palpable errors are a part of gambling, and presumably DK have wording in their T&Cs to the effect that deliberately playing on a glitch in the system can result in no payment. The better cannot reasonably claim that he was not exploiting a glitch and should have had his bet voided.
Yes, though to clarify, we are talking about what happens when you make a bet with a registered gambling organization. In that case, there is a contract. If they fail to pay you, you can sue them. If you discover that fraud was involved, then they can be reported to the authorities. They may be fined, they may lose their license, there might even potentially be criminal legal action taken against people in the organization.
And you probably do not want to operate in Nevada with an illegal gambling organization.
Now, people can make private bets, and that might be considered a “gentlemen’s agreement”, but that’s not what we’re talking about with a massive business like DraftKings. It’s like the difference between selling your lawn mower to your neighbor for $50, or buying it at a department store.
That’s a potential consequence, yes, but not the only one.
As I understand it in the UK neither is legally binding, either a bet your friend or with a major corporate gambling shop (which have existed in the UK for much longer than the US, in fact it’s mildly amusing to me to see Ladbrokes etc taking over the US casino sports books)
This explains the irritating YouTube adverts I (as a resident of close enough to DC to have a DC IP address) get bemoaning the existence of prediction markets and how Congress should act
“I’d like an insurance contract that pays me $1mm if I die of a heart attack. Actually, make it a $2mm policy that will pay if I die of a heart attack and if I die.”
I just have to say, speaking as an actuary, that i find that a really funny error for a gambling company to make.