Stacking wagers like matryoshka dolls
In a ruling that may cause sportsbooks to be extra careful when posting betting markets, the Massachusetts Gaming Commission determined that DraftKings must pay a customer $934,137 in winnings that the company sought to reduce by about 90%. It was a unanimous decision, with the Commission ruling 5-0 in favor of the customer.
The customer took advantage of a mistake by DraftKings. During MLB’s American League Championship Series, the customer combined multiple “total hit” wagers on Toronto Blue Jays outfielder Nathan Lukesinto several parlays. Normally, bettors would only be able to put one such wager into a parlay, but the customer was able to combine wagers of five, six, seven, and eight total hits without a problem.
Thus, when Lukes ended up with nine hits in the series, every total hits wager won. The customer used the error to place 27 parlay bets. Of those, only three lost because they included college football legs that didn’t come through. The customer also added high-probability NFL wagers to increase the parlay payouts.
DraftKings argued that the customer clearly exploited a betting market error, which is correct. If one were to win an eight total hits bet, one would naturally win total hit bets with lower thresholds, as well. The error allowed the customer to dramatically increase the potential payout with zero added risk; it was essentially an eight total hits bet on steroids.
Made their bed
The error was the result of Nathan Lukes being tagged as a “non-participant” in DraftKings’ system instead of an active player. Thus, the customer was able to skirt guardrails that would normally prevent markets with correlated outcomes to be piled into the same parlay.
In a Commission meeting on Thursday, DraftKings’s Paul Harrington said, “We believe this customer was engaging in fraud and unethical behavior at DraftKings’ expense.”
Commissioner Eileen O’Brien, admonished Harrington for that assertion, saying, “An obvious error is a legal and factual impossibility. This is the advantage that the patron took. I take issues with casting aspersions on a patron when no evidence was given to sports wagering. We need to seriously consider giving voice to the consumer and getting their half the story…The compulsion to pay will in fact encourage compliance.”
A common refrain from sports bettors on social media is that while DraftKings says it should get its money back, most doubt that the company would have refunded the customer had the person lost the bets.
While DraftKings wanted to void the nearly million-dollar payout, it was not looking to cancel the bet completely. Instead, it wanted to cancel the five, six, and seven total hit legs of the parlays and treat the parlays as smaller bets. As such, it would pay the customer $95,742.53, comprised of $84,242.53 in winnings from the adjusted parlays and $11,500 in the person’s original stake.
