A Derby lesson to be learned, no matter where you bet on sports

The negative news continues to run down the stretch following the latest Kentucky Derby official result. A less than inspiring Preakness didn’t seem to make much of a dent either. Bad for horse racing, bad for jockeys, trainers and owners. And what absolutely will be felt by the largest majority, bad news for the betting public, who support the sport of kings.

A sports betting story that got much attention last centered around the horse racing section, but could be an omen for the entire customer service and bettor world. Which includes with what I dare say with that tired moniker, both legal and illegal sectors. 

What Happened in Reno, Stayed in Reno?

If you feel bad losing your Kentucky Derby wager(s), consider the story of Dr. Steve Friedlander, a Nevada ophthalmologist who WON $35,000 on the Run for the Roses. 

Profiting from the memorable disqualification on Maximum Security, Dr. Friedlander hit a $40 trifecta on the Kentucky Derby that paid an enormous $459,024, plus a $100 exacta that paid $150,480. In total, a collection of over $600K. Or so he thought.

The doctor was unable to collect the huge payouts because he placed the bets at a non-pari-mutuel location - the William Hill Race and Sportsbook inside the Reno casino Tamarack Junction - that caps the exacta payout odds at 150-1 and the trifecta odds at 500-1.

Those caps lowered his $40 trifecta payout to $20,000 and his $100 exacta payout to $15,000.

When Friedlander went to the casino to cash his tickets two hours later, a writer informed him there's a cap on exotic wagers and pointed to a small placard on the wall that Friedlander hadn’t noticed. It reads 'This William Hill Race and Sports Book is a NON-PARI-MUTUEL LOCATION" and referred bettors to the house rules regarding payout odds limits.

"I was pretty sick," he said. "It’s one of those things where I watched the race and thought I won all this money, yet I thought 'this is too good to be true.' And I went down there and 'yeah, that’s right.'"

Had Friedlander placed his bet at a standard Nevada pari-mutuel location — where all wagers are placed in a pool and bettors bet against one another rather than against the house — he would have been paid in full, therefore receiving the entire $600K+ payoff.

William Hill said Friedlander "has the right to appeal to the Nevada Gaming Control Board, but we are confident that we have fully complied with the relevant gaming regulations and had prominent signage alerting customers to the payoff caps."

Thus far Friedlander has declined to cash his tickets (likely on attorney’s advice) and made an appeal to the Gaming Control Board, which told him they would decide within 45 days.

Friedlander said he hopes his story will serve as a cautionary tale as legal sports betting spreads across the country.  "I want new bettors to hear my story so they’re aware what house rules are,” he said. “And to make sure they do their research before they make a bet."

Read the Rules First – Making sure Offshore OR Onshore 

Much has been made over one controversial issue in the past year since the Supreme Court decision to overturn PASPA, igniting the beginning of legalized sports wagering in the U.S. It’s centered upon the advantage "legal" sportsbooks supposedly will have over current offshore sportsbooks offering bettors clarity and opportunity to seize advantage understanding wagering rules and principles. Taking a cue from Dr. Friedlander’s unfortunate experience, perhaps we should re-examine that claim and more importantly, learn from his misfortune.

First, the rules for all wagering are clearly displayed on most all offshore wagering websites and have been done so accordingly for several years. Creating explicit clarity for bettors has been a central reason that has elevated selected brands to be named among the list of preferred sportsbooks.   It’s what has helped certain well-known sportsbooks like Bovada, BetOnline, 5Dimes and WagerWeb avoid many customer service issues because players better understand the rules among different sports and games before entering play. And among the many reasons what’s differentiating them from others and often accounted for their preferred level success. Smart customers have avoided many troubled waters by reading and charting the rules carefully before setting out to sea. 

Rules ARE Rules

This isn’t a criticism at all against William Hill, which is certainly one of the most respected and successful gaming companies in the world. More of a red-light for all bettors to understand the rules when entering any new land-based U.S casino to wager on sports or playing online. All new U.S. sportsbooks have included their state and company rules clearly online. *Please also remember, like any other U.S. laws, certain guidelines differ state to state. 

For example, New Jersey will not allow wagering on their state university teams involving college football and basketball. It is expected that new sports betting state Tennessee will only offer online betting. Very strict identification and collection policies will be in effect. Specific state guidelines perhaps different from other states involved the past year (ex: NJ & PA) since PASPA reversal.

Lastly, keep in mind the Federal Tax rules, which are also explicitly written within each U.S. sportsbook wagering app and website. Don’t ever believe that won’t be noticed when a W2-G tax form is potentially mailed to you next January. Something that has been long forgotten for players accustomed to playing at offshore wagering websites. 

Enforcing the Rules

It will be interesting to see the outcome of Dr. Friedlander’s appeal and court case in the upcoming months.

Legally, it would seem obvious that William Hill would be the favorite to win the appeal, with the court not obligated to pay him the balance of funds. The sign enforcing the minimum payout was posted in the casino.  A reality the same as Maximum Security isn’t going to be awarded the blanket of Derby roses, because legally they gave the Kentucky judges and stewards the power to make that decision. 

I feel for the doctor’s plight, but here’s hoping the court and much more William Hill privately doesn’t decide to award him the total payout difference. Here’s why:

The infamous FanDuel software breakdown last September set a bad precedent for what customers should expect in the new legalized sportsbook world. Awarding that fortunate fellow his $82,500 because of software error has most bettors many believe they have legal right to expect a judgement to always go their way even though rules are specified accordingly. FanDuel did not have to award the bettor, however decided to do so, citing positive public relations judgement. It’s been followed in other rules reversal cases by DraftKings and newcomer PointsBet, looking at the "bigger picture" to potentially gain new customers. The cost may be critical once maturity of the industry begins to take hold and attorneys arm themselves with these decisions. 

Perhaps some kind of compromise might be forthcoming, with Dr. Friedlander receiving dollars beyond what he received but not the full mutuel payout. That’s certainly better than Gary West, owner of Maximum Security, the disqualified winner of the Kentucky Derby will likely receive for his appeal. At the track, once they ring that official bell, all bets and RULES are final.   

Glenn Greene covers the games from a betting angle every week exclusively at OSGA.com. For weekly betting insights, including previews and picks from Glenn, click here.