Sportsbooks Push Responsible Gambling Boundaries With Delayed Withdrawals

Posted on January 19, 2021 - Last Updated on January 21, 2021

In an effort to keep players active, some sportsbooks are testing the limits of responsible gambling.

New Jersey’s sports betting regulator, the Division of Gaming Enforcement (DGE), recently called out sportsbook operators for encouraging players to cancel their withdrawals and continue wagering.

Could similar violations be taking place in Tennessee and elsewhere?

New Jersey responsible gaming violations

Sportsbook investigations ensued in the Garden State after the DGE uncovered a substantial amount of player complaints regarding withdrawals.

The DGE went so far as to publish a letter about the matter.

Two specific scenarios seemed to disregard the state’s gambling laws. First, an operator may not unnecessarily delay the withdrawal process. Second, it may not offer incentives for a player to cancel the process.

Some sportsbooks were doing both of those things.

Actions of this nature pose a serious threat to player protection and responsible gaming.

Although it did not call out any violators by name, the DGE has threatened to fine operators and take regulatory action against them.

National Council on Problem Gambling (NCPG) Executive Director Keith Whyte believes operator accountability is an integral part of resolving the issue. He advises the DGE to go a step further, saying,

“We are calling on the DGE to release the names of those companies who were found in violation – especially the ones who were targeting people and giving out bonuses to reverse their withdrawal.”

How long does the withdrawal process actually take?

When it comes to the withdrawal process, transfer times can vary. Regulators do not require operators to perform immediate withdrawals. However, the DGE does prohibit superfluous delays.

In the letter, the DGE emphasizes that while no exact timeframe is given, regulations require players to “receive their withdrawn funds without any delay longer than needed to perform an anti-fraud or anti-money laundering check.”

Investigators found that operators intentionally prolonged the withdrawal process. They hoped players would get tired of waiting for their funds, cancel the process, and begin wagering again.

The DGE noted that some players had waited up to two weeks for withdrawal processing.

Three of New Jersey’s 14 sportsbooks also operate in TennesseeDraftKings, FanDuel and BetMGM. Their policies are as follows:

DraftKings does not stipulate how long payment processing initially takes. The book does mention that it generally takes 2-8 business days after the Accounting Department processes a withdrawal for funds to appear in a user’s account.

  • PayPal: 3-5 business days
  • Credit Card: 2-7 business days
  • Checks: 1-3 weeks
  • Bank Transfers: 2-3 business days

At BetMGM, the internal review process can take up to five business days, though the sportsbook approves some withdrawals in as little as a few hours. Once processed, each method has a slightly different transfer rate.

  • Checks by Mail: 7 – 20 business days
  • Borgata Cage: Up to 72 hours
  • Bank Transfers: 3-7 business days
  • PayPal: 1-2 business days
  • Borgata Prepaid Card: 24 hours
  • Skrill: 24 hours

FanDuel processes PayPal withdrawal requests within 48 hours. Online banking takes 2-4 business days and checks arrive within 7-10 business days.

As of now, no Tennessee players have reported issues with the withdrawal process on any of these three sportsbooks.

Should reverse withdrawals be banned?

Players are by all means permitted to cancel a requested withdrawal. Nevertheless, they must make this cancellation on their own accord, with no outside persuasion. In multiple New Jersey scenarios,

“. . . patrons reported contact from providers encouraging or enticing them to reverse the withdrawal request and wager the funds. It has been reported by some patrons that they were even offered bonus money to reverse a pending withdrawal request.”

The Division concluded that existing state regulations prohibit such operator practices.

When it comes to responsible gaming measures, the ability to reverse a withdrawal is questionable in and of itself.

Across the pond, the UK Gambling Commission recently instructed operators to discontinue the option of reverse withdrawals altogether.

In the US, NCPG’s Keith Whyte shares sentiments that are not quite so severe. He said,

“Frankly, I do think there are some responsible gambling issues with this, but it’s mainly a consumer fairness issue.”

Whyte suggests three policy solutions that could correct the problem. First, Whyte believes players should be able to lock in a withdrawal, in effect preventing it from being reversed.

Second, there is an obligation for additional responsible gambling messaging if reverse withdrawals are to be permitted.

And third, if a player reverses multiple withdrawals, he or she should be flagged as a high-risk player.

Tennessee and responsible gaming

It is still unclear whether or not Tennessee sportsbooks have taken any similarly illicit steps. The lack of player complaints is a good sign for the new market.

Tennessee is not without its own responsible gambling issues, however.

Most recently, the Tennessee Education Lottery approved payday loan company Advance Financial as a cash deposit location for local sportsbook Action 24/7.

Although the TEL board itself seemed to have some reservations and discussed potential complications, the company was ultimately given the final stamp of approval.

Advance Financial charges hefty interest rates of 279% to those in need of emergency funds. This can lead to potentially dangerous situations when a single cashier can help someone take out a high-risk loan and deposit cash into a wagering platform in one fell swoop.

On the other hand, Action 24/7 is able to boast nearly instant transfer times because of this. The Nashville-based company offers immediate in-person cash withdrawals at any Advance Financial location. Additionally, the average approval time for a digital withdrawal is 15 seconds.

Only time will tell whether this partnership will be more of a benefit or a detriment to bettors.

Sportsbooks may continue to test limits, but one thing seems clear – consumer fairness and responsible gambling go hand in hand.

Operators will have to play by the rules if they intend to be in this game for the long haul.

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Alec Cunningham

As a college athlete, Alec Cunningham played Division II golf at Tusculum University. She graduated in 2015 with a bachelor’s degree in Journalism and Professional Writing. She then returned to her love of written word in 2000 after working in the music industry as a concert promoter, tour manager and artist developer. As a journalist, she's covered a variety of topics and currently specializes in Tennessee online sports betting and Virginia casino news. She served as a panelist at this year's All American Sports Betting Summit, discussing the ever-evolving role of women in the gambling industry.

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