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NJ DGE rebukes operators for incentivizing reverse withdrawals


The New Jersey Division of Gaming Enforcement (DGE) has issued a warning to its online licensees, after a review found a number were offering bonuses to players that reversed withdrawals.

The regulator said it received a number of complaints from customers whose withdrawals were taking up to two weeks to be returned.

In an advisory bulletin, DGE director David Rebuck said that some of the delays could be attributed to investigations into potential fraud, identity theft or money laundering.

However, he added, the volume of complaints prompted the regulator to review licensees’ withdrawal policies, to ensure player protection and responsible gambling concerns were being balanced with customers’ right to access funds.

Some customers reported that operators contacted them “encouraging or enticing them to reverse the withdrawal request and wager the funds.”

Customers even reported being offered bonuses if they reversed their withdrawal requests – something prohibited by DGE rules.

The Department added that under N.J.A.C. 13:69O-1.3(g) of its regulations, it was implicit that withdrawals should only be delayed for legitimate reasons, such as to conduct anti-money laundering checks.

Rule N.J.A.C. 13:69O-1.3(k), meanwhile, requires operators to update the balance of their operating accounts – in which they hold customer money – on a daily basis. N.J.A.C. 13:69O 1.3(j) requires the same for customer activity statements.

“While no specific timeframe for processing a withdrawal is mandated, it is clear that the rules do not countenance unnecessary delay,” Rebuck said. 

In addition, rule N.J.A.C. 13:69O-1.3(d) sets out ways in which a customer may fund their account. As reverse withdrawals are not listed, the DGE said it has said conditions on when these are permitted.

“The Division has interpreted its regulations to authorize the re-deposit of funds earmarked for a ‘requested, but not yet completed’. withdrawal request but only if the decision to reverse the withdrawal is made independently by the patron,” the bulletin explained.

“The Division shall not permit ‘funds in the process of withdrawal’ to be deposited to an igaming account if such deposit was solicited or incentivized by an operator.”

Rebuck added that offering bonuses to incentivize these reverse withdrawals was “unacceptable”.

“The Division has determined that the current rules, taken as a whole, prohibit the practice of soliciting, either overtly or covertly, the rescission or reversal of withdrawals once requested by a patron,” he wrote. “The encouragement or incentivization of such rescissions are inconsistent with the intent of having speedy and consistent withdrawals, with a minimal delay solely for the purpose of checking for fraudulent activity.”

The Division of Gaming Enforcement did note, however, that there are certain circumstances where a withdrawal may be legitimately delayed. For example, it noted that cancelling a withdrawal due to a lack of customer documentation “is not viewed as a delaying tactic”, but rather an important know-your-customer check. 

Rebuck warned operators licensees that continue to encourage customers to reverse withdrawals would face fines.

“Operators should clearly understand that the Division will take regulatory action and impose civil penalties whenever patrons are improperly encouraged or incentivized to rescind their withdrawal requests for the purpose of resuming gaming activity,” he said.

This week, the Division revealed that online gambling revenue in the state amounted to $99.5m in December 2020, more than double the total from December 2019.

Sports betting revenue for December reached $66.4m as handle fell just short of the $1bn mark, at $996.3m.