Jim Bob Hartenstein – J.B. for short – is no stranger to the sports betting scene. An avid odds-shopper with just about every imaginable mobile betting app on his phone, he thought he knew the ins and outs of the trade – until he opened an email from a New Jersey operator earlier this year.
“In compliance with the laws surrounding internet gambling within the state of New Jersey, any wagering account which has been inactive for a period of 1 year is considered dormant,” the email read. “Dormant accounts are closed and any funds remaining in this account have been forwarded to the Division [of Gaming Enforcement] for deposit in the State General Fund.”
Although Hartenstein didn't have much money in this particular sportsbook account, he'd never heard of such a policy and thought it to be “bulls**t.”'
But it turns out just about every state that's legalized online gambling has a similar law in place.
According to these statutes, accounts that have been inactive for a set amount of time get drained, with at least half of the forfeited funds funneled directly to the government to use as it wishes. (Some states, like New Jersey, call for a 50-50 split between the state and the gaming platform operator.)
In all states with such statutes, operators are required to make a good faith effort to track down the lapsed bettor and give them the opportunity to either reactivate the account with a deposit or wager, or withdraw the funds before the last granule of sand hits the bottom half of the hourglass.
But Hartenstein (who is being referred to by a pseudonym due to not wanting to be identified by name in this piece) said he received no warning before his account was declared dormant, and Unabated co-founder Captain Jack Andrews (another pseudonym, albeit a widely known one) told Sports Handle that he's heard of several instances in which this has happened.
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“The dormant account or expired sports betting ticket has always felt like an unnecessary tax, in my opinion,” said Andrews. “It's like the coin-flipper machine you find in an arcade or on cruise ships. It looks like each coin that gets flipped in eventually gets returned to bettors. However, then you notice the gutter off to the side of the pushers. Coins that drop down there become the property of the house. There's the vig.
“So, is it fair?” Andrews asked himself. “It's a stated regulation that is pretty universal. I've been alerted in the past when my account was 30 days from the cutoff. Should the sportsbook get to keep dormant accounts? I don't think so. Should the state get to keep dormant funds? I don't think so either. That's why my official opinion is that it's fair, but it's unnecessary. Here's my solution: Each state has an unclaimed property department. Unclaimed funds, dormant account balances, should wind up there.”
Why No Automated Refund?
If there's a flaw in New Jersey's statute, it's that it renders an account dormant after a year of inactivity instead of three, and legislative attempts to bring this time period in line with the more generous national standard have thus far been unsuccessful.
That being said, “while the terms in New Jersey may seem short, the statute clearly defines the process for this from the beginning,” said Brendan Bussman, managing director of B Global, a gaming, sports, and hospitality consultancy. “Most people typically do not read most of the T&Cs (terms and conditions) when they sign up, but patrons needs to look at these things, especially if they are just a casual bettor.
“If it’s your money, keep using your account, or empty it and put it into another place if you do not intend to use it. In most states, it is not hard to make a deposit to start up again.”
But in a day where moving money online is such a frictionless proposition, why wouldn't a mobile sportsbook simply transfer unused funds back into a bank account that's connected with the dormant betting account?
“Some states allow operators to issue refunds directly to the player,” said Jessica Feil, vice president of regulatory affairs and compliance at OpenBet. “They know the bank accounts, but if an account has been dormant — not even a ping for three years — you don’t know how good that information is about their bank account, so you don’t want to send the money somewhere it shouldn’t go.”
Hence, if funds are returned, they usually come in the form of a check sent to an address that's been verified by the operator.
At Least It Beats Europe!
Chafed as Hartenstein was at the mere existence of dormant account policies, Feil is here to remind American bettors that it could be worse.
“In a lot of Europe, when you open an account and leave money in it, they have the right to charge a monthly maintenance fee,” she pointed out. “Let’s say you left $100 in soccer winnings in there and came back the next season, it might be gone. That’s not the case in the U.S. The process for declaring an account dormant and disposing of the funds is prescribed by statute in every state, and operators put the information in their house rules. They do have to take affirmative steps to find the player.”
So U.S. policies in this arena are better for bettors, but are they really fair? Like it or not, Feil feels as though they are.
“Dormant betting accounts exist because the reality is sometimes players will open accounts, deposit money, and forget about them. And there are costs to operators to maintain accounts and the security of data,” she explained. “So after a period of time, there has to be some sort of recourse if we think the customer is never going to come back. In most places, it’s three years, which is quite a long time if you think about it.'
“The reality is this isn’t much different from any sort of unclaimed property situation,” Feil added. “Sportsbooks and casinos are financial institutions, much like banks. So I think it’s reasonable after proper notice and attempts by the operator to locate the customer to have a policy in place to close the account officially so that it's not a liability for the operator.”