Paul Manganaro lost $200 betting on the Los Angeles Rams to cover the spread at this year’s Super Bowl. Someone losing a bet wouldn’t ordinarily be news. However, Manganaro’s narrow loss was enough reason for him to decide to stop wagering. What happened next is where our story begins.
Having decided to throw in the towel, Manganaro tried to withdraw the rest of this balance from FanDuel Sportsbook. He had $300 left from a deposit he’d made a couple of days before. He claims that the site wouldn’t return that money if he didn’t wager it first. That’s what led him to initiate a class-action lawsuit.
Manganaro’s complaint brings up several issues. These range from US online casino operators’ anti-money laundering practices, to a warning issued last year by the New Jersey Division of Gaming Enforcement (DGE). It told the state’s online gambling operators that they needed to be faster in processing cashouts.
Manganaro v. FanDuel
The complaint Manganaro filed on Thursday with the Superior Court of New Jersey Chancery Division in Camden County claims that FanDuel violated state law.
Not returning his partial deposit and instead requiring him to first gamble (or “play through”) the $300 violates the New Jersey Consumer Fraud Act, according to the filing.
The defendants in Manganaro’s suit are FanDuel, Betfair Interactive and the New Meadowlands Racetrack.
The lawsuit says it’s doing so on behalf of all FanDuel Sportsbook players. However, its wording seems to include FanDuel Casino users as well:
“The Class is so numerous that joinder of all members is impracticable. According to its website, FanDuel currently has over twelve million registered users.”
FanDuel is the market leader for sports betting in the US.
A spokeswoman for the plaintiff’s law firm, Cherry Hill, N.J.-based Brodsky and Smith, told Online Poker Report on March 29:
“We can’t comment on any ongoing cases.”
A FanDuel spokesman declined to comment to OPR for the same reason.
“Fraud and criminal conspiracy”
In addition to allegedly violating the New Jersey Consumer Fraud Act, Manganaro claims FanDuel breached its contract with him, committed fraud and engaged in a civil conspiracy. He wants a jury trial for the civil action.
The complaint asks for FanDuel Sportsbook to return any partial deposits requested by players who have not yet gambled those funds, plus “treble damages” on those amounts.
Manganaro’s filing also seeks attorneys’ fees, “injunctive relief requiring the Defendants to change its terms and conditions listed on its website to make clear which monies need to be gambled,” and additional compensation as deemed appropriate by the court.
The class-action quotes the FanDuel site’s deposit and withdrawal terms as so:
“We also may conduct checks for Terms compliance, including anti-fraud checks on playing patterns and deposits prior to processing a withdrawal, and we may request additional information before permitting a withdrawal. Subject to such checks, you may close your account and withdraw your deposits and/or winnings at any time and for any reason.”
Manganaro claims that he signed up for FanDuel Sportsbook on Feb. 11. The lawsuit says he made the decision largely because the operator’s advertisements proclaimed bettors could “easily deposit and withdraw unused funds.”
He now alleges those ads were “fraudulent, misleading and incorrect.”
Why Betfair and Meadowlands are involved
Meadowlands is named as a defendant because it holds the license on which FanDuel Sportsbook operates. As for Betfair, that’s because, at one time, FanDuel Sportsbook used Betfair Casino in order to offer online casino games in New Jersey. As a racetrack, Meadowlands can only serve as a partner for sports betting.
The former Betfair Casino migrated its users to the new Stardust Casino when that brand launched in March 2021. FanDuel continues to use the Meadowlands license for its sports betting operations, but now has its own online casino partnership with Golden Nugget Atlantic City Hotel, Casino and Marina.
Betfair and FanDuel are brands under the umbrella of Dublin-based Flutter Entertainment.
OPR found this language on FanDuel’s site on March 29, on the page Sportsbook – Why Can’t I Withdraw My Funds?:
“Attempting to withdraw deposited funds: The withdrawal process is intended only for winnings. If you would like a refund on one of your recent deposits, please contact our support team.”
DGE Director David L. Rebuck warned New Jersey online gambling operators in his most recent Advisory Bulletin, posted in January 2021:
“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.”
Rebuck said operators were taking up to two weeks to make “funds available” to online gamblers who’ve requested withdrawals.
He said while online gambling operators did need to “investigate possible fraud, identity theft or money laundering,” some operators were taking too long to return the money. Some were even “soliciting or incentivizing” online gamblers to rescind or cancel their withdrawal requests.
Historically, retail casinos have often been targets for money laundering. Such attempts typically involve purchasing a large number of chips, gambling with some, then exchanging the remainder for cash again. According to the February 2022 publication from the US Department of the Treasury, National Money Laundering Risk Assessment, the practice is sometimes spread out over several land-based casinos.
According to the report, this is why partial withdrawals of deposits not used to gamble can seem suspicious.