Regulator: NJ Gambling Operators Delay Customer Withdrawals, Ask Reversals

The New Jersey Division of Gaming Enforcement (NJDGE) has received numerous complaints from patrons in the Garden States that withdrawal times from online gaming accounts have been artificially increased by operators to give operators enough time to change customers’ minds about pending withdrawals.

In other words, the NJDGE stipulates that iGaming operators have been forcefully trying to retain customers. Some of the delays were attributed to possible fraud, identity theft and money laundering checks.

However, an increasing number of complaints has raised suspicion, prompting an investigation into operators’ payment processes as well as a commitment to player protection and responsible gambling.

In the review, the NJDGE factored in an increasing number of reports that operators used the delay to change patrons’ minds into reversing a withdrawal and remaining active customers. In some instances, bonus money has been offered to reverse payments. Responding to this, the regulator published this:

“The Division has concluded that the existing rules of the Division prohibit the practice of soliciting or incentivizing withdrawal requests to be rescinded or cancelled by the patron.”

-NJDGE

Delays for AML and KYC Checks Allowed

Commenting on the case, the watchdog acknowledged the need for operators to undergo mandatory AML and KYC checks, which took time, in order to prevent fraudsters or criminals from using online gaming as a way to launder money.

On the specific issue of whether patrons can cancel their withdrawals, the regulator remains determined to enforce a rule that allows such action only in the cases where the patron has made the decision independently. In other words, if an operator asks for a reversal of withdrawal, this will most likely be considered a breach of responsible gambling practices upheld by the Division, adding:

“The Division shall not permit “funds in the process of withdrawal” to be deposited to an iGaming account if such deposit was solicited or incentivized by an operator.”

-NJDGE

Going even further, the Division expressed its strong disagreement with withdrawal delaying tactics that were done solely for the purpose of potentially bringing a departing customer back. In fact, the regulator described such practices as “unacceptable.”

No Tolerance for Such Practices Moving Forward

To clear up any ambiguity in the existing regulation, the NJDGE has said that moving forward such practices will not be tolerated. Delays must happen for only as long as an operator needs to clear specific fraud, money laundering and other illicit activity suspicions, the regulator warned.

Offering money to patrons as a form of incentive to reverse pending withdrawals is misconduct, the Division explained. Another noteworthy point is that should a patron fail to provide all requested documentation, and their withdrawal is cancelled as a result, this would not be construed as a delaying tactic by the Division.

New Jersey is one of the leading states in terms of gambling. The state was instrumental in the legalization of sports betting in 2018 and has since been fighting offshore marketing and illegal sports betting.

The Garden State also demonstrated and deployed numerous initiatives to boost responsible gambling practices and educate consumers about the dangers of engaging with unlicensed sportsbooks. Now, it seems, the danger may have been closer to home than the regulator suspected.