Russell Karp of DataArt examines how the leading US sportsbooks handle unexpected changes to events, with a deep dive into house rules.
One of the many challenges facing sportsbook operators is the effective handling of unexpected changes to events. With the ongoing Covid-19 pandemic, extreme weather conditions, player injuries, and any other force majeure, sportsbook owners must respond with clear house rules.
In our recent interview about sports integrity, Matthew Holt, CEO of US Integrity, shared his opinion on house rules: “House rules dictate how a sportsbook handles a wide variety of situations, like how long must a football game go for there to be action? It’s usually 55 minutes out of the 60 minutes played.
“We actually had a game here once – a bowl game with Wisconsin and UNLV, where Wisconsin was just throttling UNLV in what was essentially a pick’em, and a mysterious van smashed into the transformer outside and the lights went out,” he explains. “And they had played only 52 minutes and all the bets were null and void in a situation that was going to cost sportsbooks millions and millions of dollars.
“There are all kinds of things that come up in sports. Osaka withdraws from the French Open due to anxiety. Some books offer refunds. Some say: ‘It’s a loser’. The Kentucky Derby horse gets disqualified for steroids after the race, but most books have already paid. And do you pay the second-place horse now? Do people get their money back? So there’s a wide range of things that can happen in sports.”
If comprehensive house rules aren’t in place, the results can be disastrous. And considering the uncertainties of the global pandemic, some sportsbook operators have revisited their regulations. One example occurred last year when DraftKings took precautionary measures regarding the potential for significant cancellations in the NFL season.
Johnny Avello, director of sportsbook operations at DraftKings, announced that the company would refund all Super Bowl futures bets if the entire NFL season were canceled. He further indicated that DraftKings would honor such bets if circumstances allowed, stating: “If we go into the playoffs and there is a champion, then we will pay.”
An odd situation that occurred last year also raised awareness of the importance of carefully worded house rules for wagering. Here’s what happened: Just a few days before a match, six players on FC Rostov of the Russia Premier League tested positive for Covid-19. The result? The starters, second-stringers, and coaches all went into mandatory quarantine.
And although the team asked FC Sochi to reschedule the game, their request was denied. The only option for FC Rostov was to use its youth team for the match. And here’s the kicker: odds provider Don Best didn’t hear this news until game day, resulting in a scramble to repost the spread to make betting outcomes reasonable, given the situation.
At the same time, sportsbooks paid out for all the wagers previously placed, following their house rules to honor those bets even in such unusual circumstances.
The Russian Premier League scenario serves as an excellent reminder for sportsbook operators to review their house rules to protect their interests and the interests of their clients in uncertain times.
Following the lead of big players
Each sportsbook designs its own rules for dealing with cancellations, postponed games, and force majeure. “House rules dictate how the sportsbooks handle these things. And sometimes they are very controversial. And sportsbooks’ rules don’t always mimic each other across the board, so you can go to ten different books and make the exact same bet and get several different results,” Holt explains.
In this article, I’ll compare the strategies of three major US sportsbooks—DraftKings, FanDuel, and BetMGM—to explore various regulations.
NBA: For wagers on NBA games, DraftKings considers an event void if it “does not start within 12 hours from the start time as last issued by the governing association”. The company’s house rules further explain that this statement applies to postponed games due to weather, crowd trouble, or other situations.
When it comes to NBA games, Holt says: “Think of the number of exhibition games. There’s no other country in the world that allows the amount of wagering that the United States does on exhibition games: NBA All-Star Game, MLB All-Star Game, NFL Preseason. Where the participants in those games will tell you they don’t care if they win. In an NFL Preseason – you’re just trying to get your backup quarterback familiar with the playbook. Or, Major League Baseball’s spring training – you’re just trying to get your team roster built out. An NBA Preseason is just about getting back in shape – not who wins or loses these games. And yet, we bet millions of dollars on them.”
NFL: For DraftKings NFL bets to be valid, games must begin in the same scheduling week of the league. If a game is stopped before the minimum time has been played, it must be completed within 48 hours of the scheduled start date, or bets will be void. The exception for this rule is when the specific market outcome has already been determined, such as an otherwise stated rule for playoff games.
MLB: Games must begin on the scheduled day for bets to remain valid. If a game is suspended after it starts but resumes within 36 hours of the original start time, bets remain valid. Otherwise, all bets are void unless otherwise stated, such as specific rules for playoff games.
“We had a good example where one of the hosts of a show on VSiN made a $1,000 bet on the French Open last year,” Holt says. “And the event, which is normally played in the spring, got pushed due to Covid, and because the event moved all the bets were null and void.
“And when they rescheduled the French Open to November, they put up new odds as if it was an entirely new event. And one of those hosts had $1,000 on the eventual winner at 30 to 1, and all he got was his money back. He was really upset and thought: ‘Hey, they didn’t do a good enough job of displaying that information or notifying customers of that’. And he took it to the Gaming Control Board and lost to the sportsbook because, at the end of the day, they do post house rules, whether it’s on the betting app or inside the actual physical sportsbook somewhere.”
NBA: FanDuel has a somewhat different rule than DraftKings when it comes to bets on NBA games. The company considers all bets void “if a match does not start on the scheduled start date and is not completed within 24 hours of the scheduled start time”. However, this rule doesn’t apply to wagers made on markets that have been “unconditionally determined.”
NFL: FanDuel’s primary rule for NFL bets is the same as DraftKings – wagers are void if the game isn’t played within the same scheduling week. FanDuel additionally voids all bets when a venue change occurs, while a minimum of ten minutes of game time must be completed in the fourth quarter for bets to remain valid.
MLB: If a one-day game is postponed, it must be played on the scheduled date for bets to remain valid. For games over multiple days, such as during the playoffs, bets remain valid for any games completed no later than one day after the last game was scheduled.
“Covid gave us a whole new set of challenges and how we handle things,” Holt explains. “There are just so many things to consider now that can happen within an event: changing venues, changing times, changing days, they’re getting canceled, calling the games halfway through the games.”
NBA: For games that are postponed or incomplete yet resumed or played within 24 hours of the originally scheduled start time, all bets are valid. However, if a game starts more than 24 hours after the originally scheduled start time, all bets are considered void, and stakes are refunded.
NFL: Games must be played within one week of the originally scheduled date and held at the original location for BetMGM wagers to remain valid.
MLB: Regular season games must be played on the scheduled date and venue for bets to remain valid.
Covid-19/Force Majeure Events: Just like DraftKings and FanDuel, BetMGM will not be held liable to any bettor for a failure resulting from a force majeure event, such as a Covid-19 outbreak, hurricane, fire, or earthquake.
The following table provides a summary of the primary house rules for DraftKings, FanDuel, and BetMGM.
Games must start within 24 hours of scheduled start time.|
Games must start on scheduled date and be completed within 24 hours of scheduled start time.|
Games must be played within 24 hours of scheduled start time.|
Games must begin within the same scheduling week of the league.|
Games must begin within the same scheduling week of the league.|
Games must be played within one week of the originally scheduled date.|
Games must begin on the scheduled day.|
Games must be played on the scheduled day.|
Games must be played on the
scheduled day and at the scheduled venue.
Although the pandemic resulted in massive cancellations of sporting events, the global situation is improving; allowing sports fans and betting enthusiasts to thrive. So it’s vital for sportsbook operators to review their house rules to effectively handle unusual situations whenever possible:
“And despite the fact that sportsbooks make all these house rules, at least once a month, something happens in sports that people don’t know how to handle, like, ‘oh, we never thought a tornado would rip the roof off the stadium’,” Holt points out. “Now what do we do?’”
Establishing your rules
When unfortunate situations arise, sportsbook operators should ensure that their house rules are carefully designed to protect all interests. At the same time, house rules directly impact the overall fan experience and help foster trust in the sportsbook.
“I will say house rules are rarely displayed prominently,” Holt adds. “Ask your buddy who just went to make a bet at a book, who does not bet every day for a living, say: ‘Hey, did you see the house rules?’ He’s going to say ‘no’ and nobody ever notices and nobody looks for them. It’s amazing that 99% of people who place a bet have no idea that it even exists, never mind where to find it, or ever seen it. There’s no big sign anywhere that says ‘house rules here’, and because of that, most people actually don’t know what they are, and it causes a lot of confusion and mayhem. And that can leave customers confused, upset, and wondering ‘what happened?’.”
In this fast-paced betting world, it’s equally important to provide bettors with accurate information as quickly as possible and to educate players on the specific house rules that relate to their bets. These measures will help sportsbooks build a positive reputation, boost fan engagement, and promote more bets.
Beyond influencing fan experience, Matthew Holt also says that house rules can serve as a marketing tool, especially for newbie operators:
“So what we have seen in the past year is some of the newer sportsbooks using it as a marketing tool. So, something happens, the Kentucky Derby disqualifying that horse till the next day. You pay out those bets three minutes after the race is over. What are you supposed to do the next day? And what happens when the sportsbooks start picking and choosing which bets to void? ‘Well, this one we didn’t take a lot of action on so we’ll just pay all the losers, send a couple of tweets and tell our customers how much we appreciate them’.”
“But when you don’t do it consistently, it just leads to more customer confusion. And so, I think at the end of the day, house rules should be clear. They should be concise and then they should be forced. The operators should be forced to follow them to a tee.”