New Jersey online gambling ops scolded for incentivizing reverse withdrawals


New Jersey online gambling operators have been warned not to slow-roll customer withdrawal requests in the hope that customers will keep gambling.

On Wednesday, the New Jersey Division of Gaming Enforcement (DGE) issued an advisory bulletin regarding some unidentified online gambling licensees “soliciting or incentivizing withdrawal requests to be rescinded or cancelled by the patron.”

The DGE said it had received complaints from customers regarding operators who were taking up to two weeks to process a withdrawal. Some of these customers reported receiving communications from operators “encouraging or enticing [customers] to reverse the withdrawal request and wager the funds.” Some customers were even “offered bonus money to reverse a pending withdrawal request.”

The DGE notes that its existing rules don’t specify a hard time-frame in which operators are required to process withdrawals, and the regulator acknowledged that some delays may be justified in order to prevent fraud or money laundering. But the DGE says withdrawals must be processed “without any delay longer than needed to perform an anti-fraud or anti-money laundering check.”

The regulator took a particularly dim view of the fact that, while certain operators were imposing unnecessary delays on withdrawals, they informed customers that the funds in question could be made immediately available for wagering purposes if the customer rescinded their withdrawal request. The DGE said its existing rules prohibited the solicitation “either overtly or covertly” of such a reversal.

The DGE said withholding withdrawals for any period longer than necessary to detect criminality was “an impermissible delaying tactic” and operators “should clearly understand that the Division will take regulatory action and impose civil penalties whenever patrons are improperly encouraged or incentivized to rescind their withdrawal requests for the purpose of resuming gaming activity.”

Regulators in more mature sports betting/iGaming markets have also been cracking down on such shenanigans. Last spring, the UK Gambling Commission (UKGC) prohibited its online licensees from accepting all reverse withdrawal requests, calling such requests “a flag for potential gambling harms.”

The order was part of the UKGC’s “tighter measures to protect consumers” during the initial pandemic lockdown, and the regulator issued a reminder just last week that it would be monitoring its licensees’ activity to ensure consumer protection remained the watchword as the country entered another national lockdown.

The US iGaming/sports betting market is relatively young, and growing pains are to be expected. But the phenomenal growth enjoyed by markets like New Jersey in 2020 could come to a screeching halt if operators don’t rein in their worst instincts.