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New Jersey gaming regulators have ordered bet365 to pay out more than a half-million dollars after an audit found the sports-betting operator revised odds to already concluded bets that were placed with “obvious errors”, without prior regulatory approval.

New Jersey Division of Gaming Enforcement (DGE) regulations do not allow operators to revise or void any wager without prior permission.

“These types of multiple and serious violations cannot be tolerated in the New Jersey gaming regulatory system,” Mary Jo Flaherty, interim director of the DGE, wrote in an released on Monday (August 5).

“As set forth throughout this Action in Lieu of Compliant, the actions of bet365 by which it unilaterally voided wagers have been totally unacceptable,” Flaherty wrote. “No further violations related to the unilateral voiding of wagers will be tolerated.”

The enforcement action requiring bet365 to reimburse 199 customers was the second substantial penalty that Flaherty and her staff have negotiated since taking over as interim director on March 1.

Flaherty replaced David Rebuck, who spent 13 years as DGE director and oversaw the launch of both internet gaming in New Jersey in 2013 and sports betting five years later.

In June, DraftKings agreed to a $100,000 penalty for reporting inaccurate sports-betting data to the state.

In a similar tone to the bet365 action, Flaherty described DraftKings' errors as “unacceptable conduct”. The errors resulted in regulators having to post corrected financial data for several months, something that had not happened in 13 years.

The inaccurate data caused Resorts Digital, the online business of Resorts Casino in Atlantic City, to file incorrect sports-betting tax returns between December 2023 and February 2024, the DGE said in its letter published on July 5.

The four-page letter to bet365 dated July 22 and signed by DGE deputy director Louis Rogacki on behalf of Flaherty asked bet365 to make the payouts within ten days of receiving the notice. A request for comment from bet365's U.S. spokesman was not returned Monday.

The DGE ordered bet365 to pay its customers' winnings based on the original odds, not the changed odds.

The audit in April 2022 found that bet365 had accepted wagers on what it claimed were incorrect odds for 13 sporting events, beginning on December 25, 2020, when one customer placed nine wagers with incorrect odds on a table tennis match involving two Russian players.

According to the letter, bet365 unilaterally revised the odds for these wagers after they had already been paid out to the winning customer, without DGE approval.

Five days later, bet365 accepted wagers on an NFL game between the New York Jets and New England Patriots on what it claimed were incorrect odds. Bet365 accepted 21 wagers from 18 patrons, with nine customers placing winning wagers on the game, which the Patriots won 38-3.

Again, the DGE found that bet365 unilaterally revised the odds for these wagers after they had already been paid out to the customers, without regulatory approval.

The routine audit conducted by the DGE found a pattern of unilaterally revising odds on wagers after they had been paid out between December 2020 and November 2022.

The final incident occurred on November 18, 2022, when bet365 accepted eight wagers on an NFL game between the Tennessee Titans and Green Bay Packers, on which it claimed the odds were incorrect. The Titans defeated the Packers 27-17.

“While bet365 had honored seven winning wagers that had been placed by four patrons, it claimed that an eighth winning wager should not be honored because the incorrect odds were egregious and should have been considered an obvious error,” the DGE wrote in its letter.

“Bet365 has not yet honored the eight winning wagers from this event,” the DGE said at the time the letter was issued to bet365. 

The DGE ordered bet365 to pay out a total of $519,323.32 to 199 customer accounts. However, New Jersey regulators did not release specifics on what the odds were changed from or to on any of the 13 sporting events.

Besides operating in New Jersey, bet365 operates in ten additional U.S. states, namely Arizona, Colorado, Indiana, Iowa, Kentucky, Louisiana, North Carolina, Ohio, Pennsylvania and Virginia.

Bet365 claimed it had been permitted to unilaterally revise the odds on wagers for these events because they were posted in “obvious error”. The operator also maintained the revisions were permissible because it was stated in the company's House Rules that bet365 will seek to ensure all odds displayed on the site are correct when published.

“On occasions, there may, however, be incorrect prices published due to human or technical error or issues outside our control (obvious error),” according to the approved House Rules.

In response, the DGE said that bet365 in all instances failed to recognize its House Rules were approved by the division.

“It was with an express statement and caveat that bet365 was prohibited from voiding any wager without prior division approval, as is the standard course in division approvals of House Rules," the regulator wrote.

“Moreover, as a sports wagering provider participating in New Jersey’s gaming industry, bet365 is charged with knowledge of the gaming laws, including the division’s regulation barring unilateral voiding of wagers by operators without the express authorization of the division.”

The DGE noted that once bet365 accepted the wagers, even using odds it considered to be “incorrect”, its only recourse was to seek permission to alter or void the wagers.

Bet365 was involved in a similar situation in New Jersey in April 2023. According to the DGE, bet365 accepted 101 bets from 47 customers on a National Basketball Association game between the New York Knicks and Cleveland Cavaliers on what it claimed were incorrect odds.

Again, the DGE said bet365 failed to comply with state gaming regulations. Seven wagers were winning wagers placed on a player prop bet, while the 94 losing wagers were also placed on player-specific proposition markets. After initially refusing to honor the seven winning bets at the originally posted odds, bet365 later confirmed it had paid seven winning wagers a total of $13,776.25 based on the original odds.