It was recently reported that bet365 has been ordered to pay back bettors who were adversely affected when incorrect odds were unilaterally changed without seeking regulatory approval.
Let’s take a closer look at the sanctions and how they might impact top-rated sportsbooks.
Must Seek Permission
A standard regulatory audit conducted in April 2022 uncovered a series of errors that will ultimately cost bet365 $519,323.32 for unilaterally changing odds on 199 winning wagers without seeking approval from the New Jersey Division of Gaming Enforcement (DGE). The company defended its actions by arguing that its house rules allow odds to be revised.
Although the New Jersey Division of Gaming Enforcement did approve bet365’s house rules as part of its licensing process, New Jersey’s regulatory rules also state that any revision on any wager cannot be done without the approval of the Division.
DGE Interim Director, Mary Jo Flaherty, wrote in a July 24, 2024 letter to bet365: “Bet365 failed, in all instances, to recognize that although Bet365’s house rules were approved by the division, it was with an express statement and caveat that Bet365 was prohibited from voiding any wager without prior division approval.”
“Once bet365 accepted the wagers, even using odds it considered to be ‘incorrect,’ its only recourse was to seek Division permission to alter or void the wagers,” Flaherty added.
Bet365 was given 10 days to comply with the DGE’s demands and pay back over $519,000 to the customers whose wagers were impacted by the company’s unilateral decision to change the odds. Under normal circumstances, a sportsbook that fails to comply with regulations is hit with a fine but in this instance, the money will go to the customers in lieu of a fine.
Technical Glitch
A total of 199 bets on 13 sporting events between December 2020 through November 2022 were unilaterally changed as a result of technical errors according to the audit. A full report by bet365 is required within 20 days of the July 24th letter to “identify and rectify the failures of its internal software systems” while also articulating what protocols and procedures have been implemented that will ensure this failure does not reoccur.
“These types of multiple and serious violations cannot be tolerated in the New Jersey gaming regulatory system,” Director Flaherty wrote. “They impact adversely upon bet365’s business abilities and casino experience and evident impermissible conduct in dealing with regulations, with significant adverse impact on patrons.”
The scathing rebuke from the DGE is commensurate with bet365’s multiple infractions. If the betting public loses faith in the sportsbook, it may lose faith in the domestic industry, and thus seek alternatives like offshore sportsbooks that pay no taxes to New Jersey or any state government.
“The failure of Bet365’s internal software coupled with its manual trading errors caused its system to be unable to ensure the accuracy of its data feeds,” Flaherty continued. “These failures are both problematic as to Bet365’s ability to conduct online gaming and the integrity and reliability of its operational systems and therefore unacceptable as they resulted in misleading wagering information that was relied upon by its patrons and ultimately led to incorrect payouts for numerous patrons.”
