The Nevada Gaming Commission issued a $100,000 fine against William Hill on Thursday for a series of infractions related to deficiencies with the sportsbook operator’s sports wagering system.
The infractions stem from a system flaw with William Hill’s sports and cashless wagering system that resulted in the transmission of thousands of erroneous duplicate wagers on the platform over a seven-year period through December 2021. The NGC approved the fine at Thursday’s hearing after William Hill reached a settlement with the Nevada Gaming Control Board (NGCB) on Aug. 17.
During the period, the flaw in William Hill’s CBS Race and Sportsbook System caused the platform to process more than 50,000 incorrect duplicate wagers, resulting in patron losses of approximately $1.3 million. Although a bettor intended to only place one wager on a particular event through the system, the flaw resulted in the erroneous duplication of that wager, said Michael Somps, a Nevada senior deputy attorney general at Thursday’s hearing.
In total, the system processed approximately 42,000 incorrect duplicate losing wagers in Nevada through December 2021, as well as 13,000 duplicate winning bets, an internal investigation from William Hill found. The inadvertently victorious wagers resulted in patron winnings of approximately $2 million, according to William Hill.
The Nevada Gaming Commission approved a $100K fine against William Hill for violations stemming from deficiencies with the book's CBS Race and Sportsbook System. Since 2015, WH's legacy system processed around 42K erroneous duplicate losing wagers in Nevada. pic.twitter.com/jL9EdQHpfd
— Matt Rybaltowski (@MattRybaltowski) September 22, 2022
The settlement resolved a complaint against several parties, most notably William Hill U.S. Holdco Inc. and William Hill Nevada II, the manufacturer of the CBS wagering system. Caesars Entertainment completed a $4 billion acquisition of William Hill’s U.S. division in April 2021, several months after announcing the proposed deal in October 2020.
In outlining the underlying causes of the wagering system’s flaws, the settlement represents multiple areas that Caesars found to be insufficient, said Jeffrey Hendricks, who serves as assistant general counsel of regulatory and compliance at Caesars Entertainment.
“That is not the standard we set operationally. That is not the standard we set from a compliance perspective,” Hendricks told the commission.
Peak traffic, erroneous duplicates
At some point around June 2021, William Hill determined that it needed to correct the flaw in the CBS wagering system after the operator received several patron complaints, according to the NGCB. While the subsequent investigation did not determine the root cause of the issue, the company indicated that the system was most susceptible to accidentally booking duplicate wagers at periods of peak traffic.
The issue arose when a customer attempted to place a bet on his mobile app, then subsequently placed an identical wager on the same event, with the same odds, for the same dollar amount within a period of 60 seconds from the original wager, William Hill’s internal investigation determined.
In peak traffic times, William Hill claimed the system would come under a heavy load, causing a succession of wagers to back up. Unnerved by the long processing time, an impatient bettor could attempt to place a bet, leave the app before the wager was fully processed, then return to the app to place an identical wager.
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For instance, if a bettor placed a $5 wager on a given event, the flaw resulted in a second identical bet of $5 to be deducted from the customer’s account, according to Hendricks. William Hill subsequently attempted to refund customers who inadvertently placed duplicate losing wagers in full, but has not been able to locate all of the customers, Hendricks added.
When asked by the commission how much of the $1.3 million in patron losses had been returned, Caesars responded that the company has not determined the exact amount. At the same time, William Hill did not void the duplicate winning bets.
Prior to the June 2021 patron complaints, when a William Hill bettor contacted the operator’s customer service team with allegations of a duplicate losing wager, the bettor was likely refunded the amount of the duplicate wager, according to the NGCB.
Slow to respond
When the system eventually stabilized, all of the wagers still in the queue — including the additional identical bets — would still be processed by the system, according to the complaint. While William Hill took remedial measures to address the issue, the NGCB found that the sportsbook operator did not fully identify the cause of the problem or mitigate the issue entirely.
Nevada Gaming Commissioner Ogbonna Brown pressed Hendricks on the timeline of the internal investigation. Although William Hill implemented a system patch in an attempt to correct the duplicate wager issue that June, the NGCB did not become aware of the deficiencies for another three months. The NGCB, according to the complaint, first learned of the issue in September from a customer who had a dispute with William Hill. Another month elapsed before William Hill began the internal investigation.
— Rick Velotta (@RickVelotta) September 22, 2022
When the flaw was discovered, the NGCB was not immediately notified by the manufacturer of the system, Somps noted. William Hill Nevada II, the manufacturer, failed to notify the board within three business days of detecting the issue, pursuant to Nevada Gaming Commission regulation 14.260, Somps added.
Transition to Liberty tech platform
Last month, Caesars Entertainment EVP Eric Hession noted that it planned to convert all of Caesars’ branded apps and sportsbooks to the company’s Liberty tech stack by the end of the year.
When Caesars Entertainment rebranded its online sports betting division in August 2021, the company used the Liberty technology to power mobile sportsbook operations in eight states. Caesars is in the process of transitioning to Liberty, its in-house, integrated tech stack in several other jurisdictions, including Nevada.
The infractions at hand, according to an industry source, occurred on William Hill’s legacy tech stack that was in use by the company long before the 2021 acquisition.
Over the course of the investigation, Caesars was not able to identify every duplicate wager from the life cycle of the program dating back to 2015, Hendricks said. But he emphasized that Caesars worked as diligently as possible to keep the NGCB updated on the status of the investigation last fall. Still, Commissioner Steven B. Cohen criticized the respondents for a failure to report the matter in an expeditious fashion on numerous occasions.
Caesars expects to have all its digital sportsbooks on its new Liberty operating platform by the end of 2022, $CZR officials said during today's Q2 earnings call; Caesars online sportsbook is now live in 18 states and could launch in Massachusetts, Ohio and Kansas by early 2023.
— Ryan Butler (@ButlerBets) August 2, 2022
A separate investigation by William Hill determined that a ticket writer at the Red Garter Hotel & Casino in West Wendover, Nevada, made multiple unlawful wagers using money from his bank drawer. William Hill discovered a cash shortage of $3,350 at the location in April. The employee has been terminated and the matter has been referred to law enforcement, Caesars said Thursday.
William Hill admitted to each and every allegation set forth in the complaint in last month’s stipulation for settlement with the state. When reached by Sports Handle on Thursday, a Caesars Sportsbook spokesman declined comment.