Online Sports-Betting Apps Face Customer Complaints Over Delays Withdrawing Funds

FanDuel Group,

DraftKings Inc.

DKNG 9.09%

and BetMGM combined have an estimated 77% of the online sports-betting market in the U.S., according to Eilers and Krejcik Gaming, an industry research firm.

BetMGM is a joint venture between Las Vegas-based MGM Resorts International and British gambling firm Entain PLC.

The complaints reveal how sports bettors, many new to the activity, are trying to understand the workings of the new online gambling industry in the U.S. Operators have used splashy ads and promotional offers to try to woo gamblers, but some bettors have reported confusion over issues such as how to redeem such offers or cash in their winnings.

The Better Business Bureau sends complaints to the companies, and the organization grades the companies on whether they respond to those complaints through the BBB, among other factors. FanDuel has an “A-minus” grade, DraftKings a “B-minus” and BetMGM an “F.”

About 1.5% of companies—or 81,000—in the Better Business Bureau’s database have an F rating, according to a spokeswoman. The nonprofit rates about 5.4 million companies based on their responsiveness to customer complaints.

“I deposited $1,000 at BetMGM to place some bets,” one customer wrote in February. “I placed these bets and won. My $1,000 is now $2,913.63.I attempted to withdraw my funds. For 18 days now, BetMGM has stonewalled my every effort to get my winnings.”

BetMGM responded eight days later through the BBB website that the funds were released, adding that “the vast number of withdrawals” are approved within three to five business days. The Better Business Bureau doesn’t release the names of the consumers who file complaints.

BetMGM didn’t comment. The company had an 86% response rate to BBB complaints, according to the group.

FanDuel and DraftKings said withdrawal requests are sometimes delayed when there are signs of possible fraud or money laundering, which must be investigated under financial regulations. Both companies have a 100% response rate for BBB complaints, according to the group.

Josh Ives,

FanDuel’s senior vice president of customer operations, said the company is often vague when explaining the delays to customers to avoid tipping off any wrongdoers about the company’s methods. In other cases, accounts are flagged for signs of possible problematic gambling behaviors, such as when a customer suddenly ramps up spending.

“Although sometimes customers are going to be unhappy, at the end of the day we have to be fully committed to compliance, to responsible gaming and consumer protection,” Mr. Ives said.

About 70% of FanDuel’s withdrawals pay out in 30 minutes or less, with some of the payments occurring instantly, he said. FanDuel has 550 front-line staff responding to customers during the popular football season, he said.

At DraftKings, compliance is key to the business, and “our focus remains on the customer and efficiently resolving customer needs,” Shawn Henley, senior vice president of customer experience and community, said in a statement.

Thirty-six states and the District of Columbia have legalized sports betting after a Supreme Court ruling in 2018 cleared the way for the industry to expand. A handful of states also allow online casino games like digital slots and blackjack.

Daniel Wallach,

a gaming attorney who specializes in sports-betting regulations, said customers should file complaints with state regulators, who have the authority to investigate and impose fines on licensed operators.

“I think in many instances, the patrons may not understand the process that’s specified by statute and regulation,” he said.

Mr. Wallach cited New Jersey, which has issued a warning to the industry.

The New Jersey Division of Gaming Enforcement last year said customers reported being asked to cancel withdrawal requests and instead continue betting, and in some cases were offered bonuses to reverse withdrawals.

The agency’s director, David Rebuck, said the practice violated state rules, without identifying companies that used the tactic. In response to a request for comment, the New Jersey attorney general’s office said in a statement that any complaints about withdrawals are investigated and addressed with the operator.

New Jersey doesn’t mandate a specific time frame for withdrawals to be completed, but patrons shouldn’t face any delays beyond checks for money laundering and fraud, regulators have said.

Write to Katherine Sayre at [email protected]