FanDuel Already Paying Out Alabama National Championship Bets as a Reward to Early Bettors. CBSSports
From the article....
This week, the company announced that it is treating No. 1 Alabama as the champs already, paying out all future bets on the Crimson Tide to win it all that were made prior to 5 p.m. on Friday. That also includes any outstanding parlay bets that only required Alabama winning the title.
FanDuel says that it's motivation behind the move is to reward customers for jumping on Alabama early. Bama opened the season at plus-195 (nearly 2-to-1 odds), meaning a $100 bet would pay out $195. However, after a dominant season, the Tide now have minus-280 odds to win the title, meaning a bettor would have to pony up $280 for a chance to win $100.
This is great news if you had a futures bet on Alabama obviously. Because you now have a built-in hedge that will allow you to make smaller, possibly higher payout, bets in the upcoming games basically risk-free. Say you bet $1000 on Alabama at +195. That would pay you $1,950. Then you go and make say, a $500 bet on Oklahoma (+416) to win. Even if you lose you still have a profit of around $1500. This is a luxury that you now have not afforded to a bettor who took early money on Clemson, OU or Notre Dame.
It skews the market.
It also relieves Alabama bettors of any of the risk they carried into the games, risk that is carried by backers of the other teams. It creates an uneven playing field and can potentially skew the market, lowering odds on other teams as this risk-free Bama money hits the pools, potentially watering down everything for other players.
How is this allowed by the New Jersey Gaming Commission and by other regulatory bodies in States where FanDuel operates?
How is this not considered market manipulation?
How is this not in violation of gaming rules?
If I had a futures bet on Clemson, Notre Dame or Oklahoma, (I don't btw, not a fan of futures bets for a variety of reasons) I'd be pretty pissed now. As a matter of fact I'd be livid. Because you're rewarding other players for making bets in cases where the line just happened to drop quite a bit. You're essentially handing out participation trophies to Bama bettors.
What FanDuel is doing is skewing the market, and potentially limiting their exposure on underdog upsets by almost guaranteeing risk-free money into the market. It's like their subsidizing select bettors at the expense of others.
One of the biggest challenges for sports betting as it navigates a patchwork of state-led regulatory agencies is ensuring that the betting markets are wholesome and fair. In this case FanDuel has failed the very market it is trying to establish.
This is different from "sign-on" bonuses and other enticements because those are available to everyone who can legally bet in a book. First deposit matches are the same. But in this case FanDuel has selected certain bettors to win before the game is even being played.
I'm pretty sure this wouldn't fly in Las Vegas, where FanDuel does not operate books currently, nor should it. New Jersey should look into this action to prevent it from happening again. The alternative is to do nothing and cast doubt on the integrity of sports betting in New Jersey.
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