Astros scandal cheated bettors, but should sportsbooks pay the price?

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When Major League Baseball levied penalties last week against the Houston Astros for stealing signs during their 2017 championship run, it raised more questions than answers: How long has this been happening? Did players use technology to cheat in other ways? Does this extend beyond Houston?

For some bettors, there was only one question on their mind: Can I get my money back?

A few got their wish. At least one book last week refunded all World Series and American League futures tickets on the New York Yankees, who lost to the Astros in the ’17 ALCS. It wasn’t the first time bettors have been refunded for controversial outcomes in recent years, a practice that draws influence from overseas and has been lauded by some as a savvy public relations move to attract free publicity and bettor loyalty.

At most books, though, the idea of refunding tickets in arbitrary cases is a practical and ethical nightmare. And it’s not just about losing a few bucks on refunded bet slips.

“I think there is no position the sportsbook should take on any of that,” said Jay Rood, Bet.Works’ chief risk officer and RunSportBet Bet’s head trader. “It’s the league that decides who wins their championships and how they play. Once the horse is out of the barn, there’s not a lot that we can do to change that.”

In most cases, sportsbooks’ own house rules preclude them from refunding tickets outside of an operator error. At RunSportBet Bet in New Jersey, for example, a winning bet is “determined on the date of the event’s or the market’s conclusion,” and the book doesn’t recognize “overturned decisions for wagering purposes,” as outlined in its house rules.

Even if the Astros’ title was stripped – which hasn’t happened – most books would be forced to leave that decision in the past. Otherwise, they could be setting themselves up for unenviable payout decisions in the future, too.

“Once you start saying, ‘We’re gonna go ahead and pay this,'” Rood explained, “you violate your house rules, so then there’s precedent. … You open a Pandora’s box that you don’t want to mess with.”

Elsa / Getty Images Sport / Getty

Of course, house rules vary for each operator, and books can frame their own rules to allow refunds for non-operator errors. Such was the case this week after the Astros’ sign-stealing scandal and, notably, last year following the New Orleans Saints’ loss in the NFC title game – which was decided, in part, by a botched pass interference call.

Even with the potential for costly losses for the operator, there are clear draws to refunding ripped tickets. With nearly half of all states passing some form of sports betting legislation in the last 20 months, millions of potential bettors are still figuring out the marketplace. Branding your book as a forgiving one in cases of on-field controversy can be appealing to the novice bettor still seeking a regular bet shop.

Conversely, it can also set a dangerous standard for sportsbooks to adjudicate fairness in matters that are already handled by sports leagues – especially as the two sides aim to build cooperative, long-term relationships that are so pivotal in the early stages of legalized sports betting.

While the NFL admitted error in last year’s NFC title game, it never reversed the pass interference call or the result. MLB punished Houston’s staff for stealing signs, but the Astros remain 2017 world champions. Is it in a book’s best interest to overrule its league partners for the bump in bettor favor?

“The moment we say, ‘They blew that call and we’re gonna pay our people like that,’ you make (the leagues) look bad,” Rood said. “And it may, in turn, bring problems for them.”

Just look at the aftermath of last year’s NFC title game. In addition to a lawsuit filed by New Orleans fans against the NFL, sports bettors considered their own suit, “claiming losses from (the) bad call,” as reported at the time by The Action Network’s Darren Rovell. Some of those bettors may have felt emboldened by the decision of at least one book to refund bets on the Saints, which contradicted the NFL’s ruling.

It’s not just the high-profile outcomes that cause nightmares for books, either. Rood says bettors were clamoring for refunds after a Dec. 3 game between the Houston Rockets and San Antonio Spurs, when James Harden’s dunk attempt in the fourth quarter of Houston’s double-overtime loss was erroneously ruled a missed basket.

Bettors didn’t get their money back, and the Rockets’ appeal was denied by the NBA. If Rood was in the business of post-result refunds, though, the pressure to pay out aggrieved bettors before the NBA’s own ruling could’ve created a logistical headache.

“You’re betting on a product that’s decided by a league that’s played on the court – we all know what the rules are,” he said. “We had no reason to step in and change anything. And our house rules prevent us from doing that.”

That’s to say nothing of the obvious slippery slope that comes from issuing refunds due to any sort of sports controversy. The New England Patriots have been harshly penalized twice since 2007 by the NFL for violating league rules – first with “Spygate,” then with “Deflategate” in 2015. Do non-Patriots bettors have a claim for refunding tickets in those instances, a la Yankees bettors from 2017?

What about the steroid era in baseball, which fundamentally changed results for decades? If sign-stealing merits refunds, does the use of pine tar? There are endless grey areas that bettors acknowledge when they buy a ticket, Rood says, which in turn frees books to just grade what occurs in the games – regardless of what may influence them.

“If you’re a seasoned gambler, you’ve gotta know that teams are living right on the edge of what they can and can’t do legally to be competitive,” Rood said. He added, “The unfortunate timing is that we just exposed sports gambling to a brand new audience, and someone who maybe played some baseball and wasn’t successful, they can point to this (Astros scandal) and say, ‘See, this whole thing’s rigged. There’s hidden information.’

“I think all the leagues do the best they can to try to monitor and police their teams, but you’ve got hundreds of individuals that might have come up with something, somewhere.”

This isn’t going away anytime soon. The Astros’ sign-stealing scandal wasn’t the first saga to test sportsbooks’ payout procedures, and if the last 12 months are any indication, it won’t be the last.

While some operators are capitalizing on those grey areas to attract new business, don’t expect most books to embrace the refund. For an industry so dependent on what happens in the field of play, the potential cost of rewriting decisions extends beyond dollars and cents.

“It’s really about separation of church and state – it’s two totally different entities,” Rood said. “… We don’t control what happens on the field, so we just try to anticipate rules around how we handle the wagering to it.”

C Jackson Cowart is a betting writer for RunSportBet. He’s an award-winning journalist with stops at The Charlotte Observer, The San Diego Union-Tribune, The Times Herald-Record, and BetChicago. He’s also a proud graduate of UNC-Chapel Hill, and his love of sweet tea is rivaled only by that of a juicy prop bet. Find him on Twitter @CJacksonCowart.