Last Friday, the New York State Attorney General filed a lawsuit against the company behind the 35 to 1 online betting website, alleging that it violated the state’s consumer protection laws by failing to disclose key information to consumers. Specifically, the suit claims that 35 to 1 failed to adequately disclose that:
- game results may be bogus due to random number generation
- the point-spread may be off by as much as 3 to 5 points
- Poker isn’t really a thing
In response, the company behind the popular sports betting website has stated that it “vehemently denies” these allegations and called them “entirely false and misleading.” The suit is seeking to have 35 to 1 immediately cease operating and shut down its website, as well as compensate New York state for their losses.
What are the Alleged Violations?
According to the Attorney General, the website 35 to 1 violates various consumer protection laws in New York, including the New York State Consumer Protection Act and the New York State General Business Law.
As noted above, the Attorney General is seeking to have 35 to 1 cease operating and blocked from future use. However, if the website is forced to close, it’s possible that it could be re-launched under a new domain. Therefore, it’s important to examine the suit and these allegations in detail.
The New York State Attorney General claims that 35 to 1 carried out various fraudulent schemes, including:
- deceptive advertising
- marketing misrepresentations
- misleading game play
- misleading wagering requirements
- illegal acts
- and more
To support these allegations, the Attorney General has pointed to various statements that appear on the website. For example, on the homepage, 35 to 1 states that its games are “fair” and “rigged” less than 10% of the time, and that its odds are “second to none.” These statements are allegedly false and misleading.
Additionally, on the website’s FAQ page, which is generally visited by new users, 35 to 1 states: “Our point spread and odds are so good you’ll wonder why you ever paid a commission to your bookie.” This statement is also allegedly false and misleading because it implies that gaming on the website is fair and that the odds are in favor of the bettor.
Further, the Attorney General contends that the website engaged in illegal activity by offering sports betting in New York where it’s not legal, encouraging players to place bets in New York where they’re not allowed, and taking payments in New York while knowing that they’ll be shipped to another state. According to the complaint, these are all practices that the website is legally prohibited from engaging in.
The complaint also alleges that 35 to 1 engaged in deceptive advertising by claiming that:
- it was independently verified as a top rated and secure betting website
- its games were tested by experienced casino software engineers to ensure random number generation and fair play
- it was certified by the Better Business Bureau of New York
- it was awarded the prestigious Better Business Bureau Torch Award for ethics and integrity
- and more
Of course, the key issue in this regard is whether these statements are false and misleading. As noted above, the Attorney General contends that 35 to 1 made a number of these claims in its marketing material, but did not disclose that they were false and misleading.
As another example, the Better Business Bureau stated in 2014 that it had received no complaints against 35 to 1. However, the company did not disclose in its advertising that it had received no complaints.
Similarly, the Attorney General maintains that 35 to 1 made numerous misrepresentations in its advertising materials and on its website, including:
- it was the most popular and highest rated sports betting website on Google Play and the iOS App Store
- it had the best odds and biggest selections for football and horse betting
- its games were fair and its point spreads were highly accurate
- it was endorsed by top sports handicappers and analysts
- it was recommended by top tier online bookmakers
- it had the best support and forums of any sports betting website
- and more
Of course, once again, the key issue is whether these statements are false and misleading. While it’s not a crime to make false statements, it is a crime to mislead New York state consumers. The investigation is still ongoing, so it’s too early to tell what, if any, impact this might have on the company’s bottom line.
Additionally, it’s not clear from either the Attorney General’s complaint or the supporting documentation whether or not these statements were actually false when made. If they were true when made, they would constitute marketing misrepresentations under state law, and if they were false at the time, the company could be liable for consumer fraud. The burden will ultimately be on the Attorney General to prove their case.
The complaint further alleges that 35 to 1’s games aren’t what they claim to be. Specifically, the Attorney General contends that the games are “fixed” and “controlled” by the company, in violation of New York state law. In the complaint, the Attorney General writes:
“Defendants’ games are fixed and controlled, rendering them illegal gambling devices under New York law. Defendants assert that their games are ‘fixed’ only 6.4% of the time, yet their wagering requirements state that customers must wager at least 35 times the amount wagered on each game to avoid losing money. Additionally, defendants’ advertising claims that their games produce ‘odds that are impossible to lose,’ however, they violate New York State law by paying out at least 35 to 1, even when the consumer has not placed that large of a wager.”
While it’s not a crime to operate illegal gambling devices in New York State, it is a crime to operate a gambling device in New York State knowingly and with the intent to defraud. Therefore, 35 to 1 could be facing charges of fraud. Again, while this is an allegation, it’s a strong one, and one that could prove to be costly to the company if true.
Wagering Requirements & Fraud
It’s also important to note that while the New York State Attorney General is seeking to have 35 to 1 shut down and blocked from operating in the state, they’re not necessarily seeking to collect damages. Indeed, the complaint states that “it would be in the best interests of the state to avoid the necessity of continuing to expend resources on this matter, and only to recoup its losses.” In other words, the goal is not to bankrupt the company but rather to protect New York state consumers.
The fact that the Attorney General is seeking to avoid putting forth unnecessary effort is evidenced by the complaint’s other allegations. For example, the suit accuses 35 to 1 of “misleading game play” by presenting simulated games that don’t accurately reflect the odds of the real thing, and by presenting false balance spreads on games where there is no point spread.
The Attorney General also alleges that 35 to 1 carried out various illegal acts in the state, including, but not limited to:
- the use of mystery payouts
- illegal shipping
- and more
A key allegation in this regard is that 35 to 1 “failed to maintain minimum financial requirements to engage in the business of betting and receiving wagers.” According to the complaint, the company “offered various incentive programs for placing wagers, yet failed to disclose to New York State consumers that these programs were entirely bogus and that they were never legitimately required to maintain a minimum balance.”
As an example, the complaint points to an “exclusive sign-up bonus offer” that 35 to 1 allegedly made to new users. To qualify for this offer, the customer must deposit $20,000 in his/her account within 10 days of making an initial deposit. However, the complaint maintains that “this sum was not required to be maintained for the customer’s benefit” but rather “was in contravention of New York State law.”