FanDuel Backtracks on Refusing to Pay out $138,000 in NFL Bets

FanDuel had previously been a leading service for fantasy sports betting in the United States. When the Supreme Court ended the federal ban on sports betting in May 2018, FanDuel took advantage and expanded into sports betting offerings. However, it has been involved in a controversy after it failed to pay out on NFL bets worth over $135,000. It has now backtracked on this stance and paid out in full.

FanDuel and sports betting

Along with DraftKings, FanDuel had been the leading provider of daily fantasy sports offerings in the United States. This is an extremely popular service whereby users can pit their fantasy teams against others in an attempt to win a predefined prize pool.

When the Supreme Court ended the federal ban on sports betting in May 2018, both FanDuel and DraftKings set their sights on this new market opportunity. They already had a customer base that was highly targeted to the sports world and it was an easy progression to move into sports betting.

Shortly after the Supreme Court decision, Paddy Power, a European bookmaking behemoth, bought a majority stake in FanDuel. Paddy Power took over 61% of the business, with an option to increase this to 80% in the next three years and 100% over the next five years.

The Betfair US business (which is also part of Paddy Power) merged with FanDuel, which also saw $158m (£120m) of cash being used to pay off FanDuel’s current debt, as well as provide funds for their new business.

It was estimated that FanDuel held a 40% share of the daily fantasy sports industry in the US – it has more than 7 million fully registered customers.

First opened sportsbooks

To date, four states have opened their sportsbooks since the Supreme Court decision, with others very close to also doing so. FanDuel has mainly been in competition with the likes of DraftKings and William Hill when it comes to earning partnership agreements with casinos in these states.

FanDuel is partnered up with multiple casinos in these areas, and has also just released its own mobile betting app in New Jersey. The app is called the FanDuel Sportsbook and FanDuel was in a race to release in time for the start of the NFL season, which it managed to achieve.

Its first official sportsbook was offered with the Meadowlands horse race track in New Jersey.

Recent controversy

Despite FanDuel seemingly getting off to a solid start with its sportsbook offerings, there has been grumbling of late by some annoyed customers.

FanDuel had been refusing to honor certain NFL bets after it claimed it had experienced a glitch in its system. One punter had won more than $80,000 (£61,000) as a result of a $5 (£3.80) parlay bet, and numerous other punters had similar bets that FanDuel did not pay out. The organization had said that this mistake was due to an error in making the odds.

One of the most noteworthy bets in this instance was two people who had placed a bet at odds of +75,000 on the Denver Broncos to beat the Oakland Raiders, when there was one minute and 10 seconds left on the clock.

The Broncos’ kicker successfully converted a kick in the dying moments to give them a 20-19 victory and the two parties won more than $138,000 (£105,000).

However, when these punters went to collect their winnings, their slips were not honored by the cashiers. The cashiers instead offered him $500 (£380) as well as New York Giant skybox seats for three of their games. He refused and filed a complaint with the Division of Gaming in New Jersey.

The aggrieved party talked with News 12, where he said: “They said their system had a glitch in it and they’re not obligated to pay for glitches.”

Others had experienced similar issues, generating a lot of headlines in the media. This negative attention certainly is not what FanDuel wants at such an early stage in its sports betting career.

What happened next?

It seemed that FanDuel would stick by its stance of not honouring these bets because of the claimed error, but it has since backtracked. The most likely cause for this change of heart is down to the negative PR it had received.

While of course there are expected to be teething problems when a business first starts out, this is the third such incident to have occurred at the Meadowlands track since sports betting was legalized.

As an apology, FanDuel has announced an offer for punters during this upcoming weekend’s NFL action: “This weekend, we’re giving away $82,000 to our customers, by adding $1,000 to the account of 82 lucky users.”

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