Lawyers, Props, And Money: The Oral History Of The First DraftKings Sports Betting Championship

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Thursday, March 19 was the scheduled start date of the four-day 2020 DraftKings Sports Betting Spring Championship. It was to have a $1.5 million guaranteed prize pool, with wagering built around March Madness and a variety of NBA games.

But there is no March Madness. There are no NBA games. So there is no Sports Betting Spring Championship.

For now, the 2019 DraftKings Sports Betting National Championship remains the only legal U.S. sports betting competition of its kind. Held in Jersey City last Jan. 11-13, with the NFL Divisional Round playoffs as its centerpiece and NBA, NHL, NCAA, soccer, golf, and more surrounding the four football games, DK got innovative with a competition to see which sports bettor could build the biggest bankroll.

A $10,000 buy-in got you $5,000 in tournament cash, and you could take home whatever was left in your bankroll after three days of betting. There was also a $2.5 million guaranteed prize pool, with a million-dollar top prize and the rest distributed among the next 24 finishers.

A total of 260 players entered — 156 by direct buy-in, 92 by qualifying in daily fantasy sports satellites, and another 12 via contests and promotions. That translated to $1.3 million in prize pool money. And that left DraftKings on the hook for the other $1.2 million in “overlay.”

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That’s par for the course with the giant DFS companies during these early stages of trying to dominate the sports betting market. They’re willing to lose money here and there in order to build goodwill and earn positive publicity.

By the time last January’s event ended, however, not all of the will was good and not all of the publicity was positive. The competition was thrilling, dramatic … and loaded with controversy.

The rules stated that all betting had to cease at kickoff of the final Sunday NFL game, Saints vs. Eagles. When the previous game, Patriots vs. Chargers, nearly butted up against that kickoff, the DK SBNC was thrown into chaos.

In this oral history, several of the top finishers and key figures who were on the scene in Jersey City share their memories of the wild long weekend of high-stakes wagering. (Numerous attempts were made to include a representative of DraftKings, but the company failed to facilitate an interview.)

With no spring 2020 event, and not much in the way of sports to bet on, there’s no better sweat right now than reliving the inaugural Sports Betting National Championship.

‘I think it’s going to overlay a lot’

Randy Lee (Parx Casino poker dealer, amateur gambler): I learned about it about six or eight weeks before. Just saw an email about the competition and decided to pull the trigger and take a shot. I kinda knew when it was announced that there was probably a pretty big shot at an overlay just because of the size of the buy-in, and because there wasn’t a ton of notice.

Daniel Steinberg (DFS pro, partner at SaberSim.com): I saw the advertisement for it, thought it looked pretty cool. A lot of the satellites for it on DraftKings were getting overlays. So I figured it was something I should try to qualify for. I don’t have a background in sports betting, but I figured if I have some solid strategies to win, maybe it would be a good tournament to play. I got in on a qualifier — I don’t remember the amount, maybe $80.

Cal Spears (RotoGrinders CEO): I tried to qualify in quite a few of the online qualifiers. But I never hit any of those. But in my mind the whole time I was thinking, this is an aggressive prize pool, and it’s probably going to overlay. I figured as long as this overlay still looks good, I’m going to buy into it. What did the overlay end up being? Like a million bucks?

Shane Sigsbee (co-founder of Imawhale Sports): I got a call from my friend Steven McLoughlin at DraftKings maybe like a week prior, and he was like, “Hey, this event, we’re guaranteeing $2.5 million and we’ve only got so many guys signed up, and I think it’s going to overlay a lot, you should come out for it.” I hadn’t even heard about it until Steven called me. It was winter time, I live in Las Vegas, and going to New Jersey in February isn’t the most attractive destination. But I made a last-minute decision to go do it.

Christopher Leong (poker pro): I heard from a friend about it. He bought in, so I decided to also. The overlay was attractive, and also the fact that a lot of people had ended up freerolling into the contest, and whatever you were left with in your bankroll you were able to walk away with. We knew that a lot of  people wouldn’t even be trying to win the tournament.

Rufus Peabody (professional sports bettor, co-host of Bet The Process): I didn’t hear about it until the week before. Somebody asked me if I was going to be in it, and I was like, “What is it?” And then I looked into it and saw that there was going to be a pretty big overlay and that’s why I entered. And I thought there would also be some value to be had by being strategic about it. And given the fact that a lot of the people had won entries from DFS satellites — and the format, the fact that you’re not just competing for prizes, you have an active bankroll, and whatever you win from your bets you keep — I thought that would lead people to be overly conservative, especially those who didn’t pay their own entry fee.

‘DraftKings was flying by the seat of their pants’

Donnie Peters (journalist, operations manager for SharpSide.com): It felt a little like DraftKings was flying by the seat of their pants. I got that first notion walking in the hotel lobby, and not really seeing any signage or a check-in desk. Right off the lobby there was a little sitting area, and off that was a restaurant, and people there were asking me if I knew where the event was. People were like, “Why isn’t there a representative meeting us? Where do I actually get registered for the event?”

Peabody: The registration process was extremely difficult. To use cash, you needed to go down to Atlantic City and then come back and register in person at the headquarters. And you had to create an alternate email address to register that was separate from your DraftKings account. I knew people that tried to register and it was too difficult. I think they would have gotten a lot more entries if the process had been easier. They just created so many barriers. But it was the first time doing it.

Spears: By the time we got checked into our AirBnB and went over to register, it was closing in on 6 p.m. Friday. I had my NBA bets picked out. And the registration process was rough. They had to create a new DraftKings account for you. It’s like a shadow account, so they can give you that $5,000 bankroll into that account. But you also had to fund it. You couldn’t use your DraftKings player account to fund it. So I couldn’t use the credit card that I normally use to make deposits. So I went through all my credit cards, tried to do PayPal, all of it was a mess, couldn’t get anything in. I finally got my $10,000 deposited using one of my debit cards. By the time I’d done that, though, the games had already started. So I actually missed the first bet that I was going to make.

‘Everyone let their guard down’

Peters: It was not a tense atmosphere at all early on. I don’t think it really got tense until Sunday. The fact that this was the first time for this event, and everyone was still trying to figure out what they were going to do, what the best strategy was, what games were happening when, I think that brought people together. People bounced those questions off each other: “Hey, like, so do you know, what happens if I don’t bet anything? Do I keep that money?” There was just a bunch of questions that everyone had, so everyone let their guard down and was much more vulnerable. Everyone was going into it like, “I don’t know anything about this, but neither do these other guys.” So we’re all trying to figure it out on the go.

Steinberg: It was really fun, really social. They have the games on, and you see your name on the leaderboard going up and down, people were cheering on different plays because you had people betting player props, first-quarter lines — just a lot of action and a lot of excitement at the event.

Spears: There were so many DFS qualifiers that it almost felt like being at a DFS live final. All the guys that I normally hang out with when DraftKings does a baseball championship or a hockey championship.

Peters: This wasn’t DFS. This was sports betting. But it was a very similar crowd. A lot of these guys knew each other.

Steinberg: It was a really fun tournament because you could just bet on your phones. We were betting from, like, restaurants, and it was just like, you could go do whatever you wanted to do and have fun and get the bets in.

Lee: I live in New Jersey, and I did everything remotely on Friday and Saturday. I didn’t go to the event venue. I was able to just crash at my place.

‘It made a lot of sense to play for first’

Peabody: The way the prize pool was set up — it was so top-heavy with a million dollars for first —it made a lot of sense to play for first, from a pure expected value standpoint.

Steinberg: I talked with [my twin brother]Max about, basically, it’s a really top-heavy tournament. So we both thought, we should take a really risky strategy and make very high-risk bets early on and just go boom or bust and try to build a big bankroll. And we both tried to do that, but Max ended up failing, getting a bet wrong, and I ended up getting a bunch of bets right and building up a big bankroll.

Peters: There was a party Friday night for everyone that was in town, just to be able to go out to a bar. DraftKings had this whole back area rented out for the qualifiers and some media. There were a couple guys at the party that had basically come with the idea of just going all-in and trying to do that multiple times. So we’re all there having some drinks, and some of the guys are sweating these college basketball games that are nowhere near the top 25 ranked teams. But they’re screaming at the TV, and word starts to circulate about “so and so has his money on this, so and so has his money on that.” A few guys bombed out early on. One loss on Friday night and their tournament was over.

Spears: I remember going to the hotel bar to watch the games and “Awesemo” [DFS pro Alex Baker] was there, and he’s just like a computer, he’s the best DFS player. And he’s like, “My strategy is to bet the max every single game, to turn $5k into $10k, $10k into $20k, $20k into $40k, and if I can do that six times in a row, I should have enough to win it all.” So he went all-in immediately and lost a game while we were there at the bar and I think he was the first guy out.

Peabody: I had an idea of what the winning bankroll number would be and I ended up being way high on that. I thought it was going to be something like $200,000 at least, given how you start with $5,000, and if someone bet 100/1 for their entire bankroll, that’s $500,000 if they win right there. Part of the reason that didn’t happen was there were limits on the bets — you weren’t able to bet anything 100/1 for $5,000 even if you wanted to. 

Steinberg: My goal was, I was hoping to get like a $20,000 bankroll by the end of the first day. We started out with $5,000. So I bet like $2,500 each on two games straight up, and I won one and lost one. So then I bet my entire bankroll on one game, won that one, and then bet my entire bankroll on another game and won that one, so then I had a $20,000 bankroll after the first day. People weren’t being as risky as I was, so I was in really good shape. A lot of people were going with small parlays to try to hit it big, or just waiting. I didn’t end up being as aggressive as I thought I was going to be. I didn’t need to be.

Peabody: I spent time thinking through what I thought the best strategy would be. But I wanted to see how other people would play it too, because that’s how these things work. It’s very game theoretic. If everybody else went in with the exact same strategy that I had, it would have been a bad strategy. So that led to this idea that what I wanted to do was get myself into a position where I thought I’d have a chance going into the final day. But I didn’t think there’d be a huge advantage to build my $5,000 into $100,000 instead of $50,000 going into the final day. It is an advantage, but I don’t think it would be worth the risk, just because then that would dictate other people’s strategies. I mean, I would have played the tournament very differently if someone had gotten up to $100,000 after the first day. Then that changes everybody’s approach.

‘There were games happening every which way’

Peters: When I go into a poker tournament as a journalist, I know exactly how to cover it, what steps to follow. With this event, there were games happening every which way, at every different time. They had this big warehouse rented out, there were all these TVs, there were all these different groups of people watching all these different games and you didn’t really know what was happening. Eventually DraftKings made the leaderboard available online, and at the bottom of the leaderboard, you could also download a spreadsheet and see everyone’s individual bets. So I started downloading the CSV file every 10 minutes or so. And after doing it a few times, I got used to looking through it and seeing what people were betting on, and then putting that out there in the coverage — like, “hey, this guy is in the lead by $10,000, he has a bet right now with this parlay and it closes with this game that’s running right now,” just get that out there. The leaderboard was accessible, but a lot of the DraftKings guys didn’t have access to their laptops, they were running around, talking to the players, doing whatever needed to be done. So a couple of them started asking me for more real-time updates on what was happening. As I was typing it up, I would also relay it to them. If somebody made a big leap into first place, they might announce it on the loudspeaker.

Spears: Donnie was doing an amazing job of tracking everything in his spreadsheet, figuring out whose parlays are live. It was really cool being next to Donnie, and watching DraftKings guys keep coming back to him to figure out what was going on. And Phil Hellmuth kept dropping by to check with Donnie what was happening.

 

Peabody: I stayed in a hotel nearby, a Westin. I didn’t make any bets on Friday — or I might have made like one small bet. But on Saturday, I did go to the HQ in the afternoon and watched the games there. I hit a few golf parlays to build my bankroll. And actually, if it hadn’t been for a bad stretch the last three holes by one of the golfers, I think there was a very good chance I would have been at $80,000 instead of $40,000 going into the last day. 

Spears: I think I was down to like $2,500 by the time the first football game started on Saturday. The Saturday night game, it was Colts-Chiefs, and I was all in on Eric Ebron. I needed Ebron to pass his yardage prop [over 45.5 yards]. And he didn’t do that until like the very last play of the game, in garbage time. [Ebron caught two passes for 21 yards on the final drive to give him 51 yards for the game.] So, I won that prop, and then I had a parlay bet that was Eric Ebron’s yardage prop from that game plus Tyrell Williams’ yardage prop [over 21.5 yards]the next game. Those two bets represented my whole bankroll.

Steinberg: The person who had the biggest bankroll at the end of Saturday, DraftKings was going to give a $50,000 bonus.

Lee: I hit a three-team parlay Saturday that ended up paying out $27,000, that really got me a stack. So then I got to compete for the big stack in the tournament, which was worth an extra $50,000.

Steinberg: I thought I won the $50,000, so I decided to go to sleep at like 11. And I wake up to someone knocking on my door really loud, and it’s Max, and he’s telling me that the person who was behind me made a live bet on a hockey game. So now I have to make a live bet on a hockey game in an attempt to overtake this guy. So I ended up making live bets on hockey — I don’t watch hockey, I have no idea, I just made these, like, random bets. And then the other guy ended up making more live bets on top of me once he saw that I was making bets, so I ended up making more live bets, and he ended up barely edging me out in terms of bankroll and I ended up not winning the $50,000.

Lee: Yeah, I went into Sunday with the lead [by $377 over Steinberg]and won that $50,000.

Leong: For the most part, all the bets, within a couple minutes of any game ending, the bets would be credited to the account. But for some reason, for a bet I won Saturday night, it took over two hours to get it credited. I was at my AirBnB, and after a half-hour of waiting, I realized, something is wrong. So I hopped in an Uber and went in physically to the event center and had to go up to the help desk and make them do it right in front of me. They were just like, “Oh yeah,” I think it was two minutes, boom, done. It was a mess. I heard other people were going through the same thing. But I also heard some people were getting their stuff instantly done. Basically, whoever stayed at the event center and was closest to the help desk could get all their stuff put through that they needed to. So that gave them an unfair edge over everyone else. I was going to go all-in on one of the Saturday night basketball games, and I would have won that. Instead I only had like $2,000 to go into Sunday with.

‘My whole focus was on sweating Randy’

Peters: There’s a guy named Shane Sigsbee. He’s big into poker and sports betting from the backing side of things. I saw him at the event and introduced myself to him. He was hanging out by Randy on Sunday. At the time, I didn’t think too much of this.

Sigsbee: Randy and I had been friends for a couple of years prior to the event. I was introduced to him by a mutual friend, Katie Stone, out there in New Jersey. I’d backed Randy for some poker events prior to this, just around the Philly and AC area.

Lee: We just struck up a deal and went from there. I knew him through mutual friends in the sports betting community. He was definitely someone I was looking to pick the brain of and have in my corner, especially at the end.

Sigsbee: I have hesitations about talking too in-depth about it. We’ve kept the percentages private. I think people in the gambling circles knew that I was backing Randy for it. I’m really good friends with Rufus, for example, and Rufus knows that I was backing Randy, and all the big sports bettor guys know that I was backing Randy. But it never became public knowledge. I had some really small percents of some other people [in the SBNC]. But it was people that busted out on Friday and stuff. By the middle of Sunday, my whole focus was on sweating Randy.

Lee: I wanted to feel everything out for the early game on Sunday. You could only bet the two NFL games, and I made the decision to sit on the first game and let everyone catch up. Being in first place gave you an advantage. I was really curious to see what everyone else did and sit on the first half of the first game, because you’re capable of seeing what everyone was betting. That was my strategy.

Sigsbee: DraftKings made it very clear that backing entries or having a percent of entries was fine, but you absolutely could not collude. I was in the top 10 [seventh place, to be precise]going into Sunday. Randy and I couldn’t go bet the opposite sides of the early game to ensure one of us won. Randy didn’t even bet the early game. I went all-in on the early game. And by the late game, I was out of the contest.

Leong: If I had gotten my bet in on Saturday night, I would have had a higher likelihood on Sunday of doing something. But because we didn’t get that last opportunity to bet on Saturday, I had to do some really desperate moves Sunday. I don’t remember what the moves were. But I had to do something that I didn’t really want to do. There was no sweat. I lost my first bet and it was over.

‘I had my entire bankroll on Patriots -3.5’

Peabody: I was in fourth place going into the final day. I knew how chaotic it was [at HQ]and there were issues with the WiFi there. A lot of times it thought you were in New York. So I decided to just stay in the hotel on Sunday. I got the premium WiFi at the Westin, and I had a backup internet source if I needed it, my phone and hotspot. I thought I’d be able to focus more, there would be fewer distractions, so given what was at stake, that’s what I did.

Steinberg: On Sunday, Max and I were talking strategy all day. He was really trying to help me figure out what the best moves were.

Peters: Most of what the Steinbergs did was on player props, specifically — that’s like their bread and butter. So they were really geared in on that, sitting in the back of the one room with a laptop.

Spears: Going into Sunday, I had like $1,500, and I had that Ebron-Williams parlay live. I was sitting there with no chance of winning, so I decided to go for bigger-return bets, and I did Sony Michel first to score a TD and Sony Michel to score two TDs. And I hit both of those in the first quarter. That was just wild. Both of those hit, and they paid pretty big, and suddenly I had like $7,000 to work with. And I put that all in on the Patriots to cover the live betting spread. And then later, my Tyrell Williams bet hits — he had a 21.5-yard prop and he got almost 100 yards — and they paid that parlay bet before the game was over, and at that point I put it all on the Chargers to cover the live spread, because it was absurdly in favor of the Patriots at that point. By the time all those bets were done, I had $12,000 riding on the live betting to return $24,000, and the game ended in an area where I won both the Patriots live bet and the Chargers live bet. I had Patriots -7 and Chargers +23.5, and it landed in the middle.

Peabody: I had my entire bankroll on Patriots -3.5. I figured I had to double up twice. I had an opinion on the game, I liked the Patriots anyway, and I thought for a lot of people, the Chargers were the sexy side. So I believed the Patriots side would be a little more contrarian. Especially people trailing, I thought they were going to want to take Chargers moneyline or alternate spreads to get a bigger price. I thought it would be more contrarian to play the Patriots there, so I did.

‘I’m just like, oh man, this is wrong’

Steinberg: I really wanted to bet a lot of money on Sony Michel over 61.5 rushing yards and over touchdowns. I’m a huge Patriots fan, I watch every Patriots game, I felt extremely confident that they were going to run the ball against the Chargers a ton and that Sony Michel would do really well. So I wanted to bet a lot on that. But we got an email from DraftKings early in the morning saying, basically, it is possible that if you make a bet on the Chargers-Patriots game and the game goes to overtime or takes a long time, your bets will not be graded in time. So when I saw that, I felt like, I can’t really risk putting all my money on this game, because if I do that, I could physically not be able to win the tournament because I won’t be able to get another bet off. So instead of betting a lot on the Sony Michel prop, I decided to bet like $5,000.

Sigsbee: One thing I really remember about that day was the head of DraftKings, I think it was Johnny Avello, getting up on stage, like literally first thing that morning, and being like, “Look, we don’t know when the morning game is going to end and there’s a chance that people aren’t going to be able to get bets in for the afternoon game.” And I remember thinking, yeah, that’s not going to happen, there’s always like a 10- or 15-minute window. But, you know, the NFL doesn’t care about the DraftKings Sports Betting National Championship. They’re not going to hold up the start of the second game for that.

Lee: They had announcements throughout the whole tournament weekend and the day. And if you knew the timing of the games, that if the Patriots-Chargers game went an extra 20 minutes, then you were really pushing the deadline with getting bets in on the second game. That opened up even more room for me, since I held off in the first game.

Steinberg: One thing that was really weird was I bet the Sony Michel yardage prop, and he had over 100 rushing yards in the first half and I bet over 61.5 yards — so, it’s basically impossible for Sony Michel to lose this prop, he’d have to lose like 40 yards rushing by the end of the game, which is physically possible, but very unlikely, right? So, to my surprise, at the start of the second half, DraftKings actually graded my bet out! I think it was a good decision by DraftKings to do that, but it was really surprising. 

Spears: At some point in the first half, they paid everyone who had Sony Michel, and all those guys were able to put that money right back into play and use it to climb the leaderboard. So I heard that happening, and I’ve got my Tyrell Williams money that I’m really wanting to put back into play, and I go ask them to pay the Tyrell Williams prop. Like, his yardage prop was 21.5, and he was ahead of it by a few yards, maybe 10 yards. And you can tell the guy is thinking in his head, Is this 10 yards enough, or might he have a reception where he loses 10 yards? I’m just like, oh man, this is wrong. This can’t be the way that you decide if you’re going to pay these bets, if we all need this money to climb a leaderboard. But Tyrell Williams had a huge second half and they did pay it early.

‘It was just really frantic’

Peabody: I remember the Pats were up like 28 or 30 at halftime [it was 35-7], so I was starting at that point to plan out my move for the next game. It was a huge blowout, so you didn’t expect the fourth quarter to take as long as it did. But the Chargers put a little more effort in at the end than one would expect, just prolonging that game, despite the fact that they were down like four scores.

Steinberg: The Chargers-Patriots game was ending, and I was praying that it would take a long time so people would have their money tied up.

Peabody: It doesn’t take a long time to put a bet in. I figured I’d have at least a few minutes. It didn’t cross my radar that somehow the bet wouldn’t be graded and processed in time. It was the Patriots’ point spread. It was the biggest market. It’s not like you had to go through a list of props. In fact, that’s one reason why props were less appealing to me, I wanted a big market. In the case that something wacky did happen, I figured that would be the first to grade.

Peters: As the first game was ending, there was a little bit of chaos in the room in terms of people trying to get bets in, but also there was a lot going on in terms of people deciding what they needed to bet to win, because there was just a lot in limbo from the first game. It was just really frantic. It was a big warehouse space, but off to one side, there were these different rooms, and one was a VIP host room, you could go in there and ask the DraftKings people some questions. That room started to get frequented a lot. There were people going in and out of there, people didn’t know what was happening. I remember Jon Aguiar was there for DraftKings and he was running in and out of that room, talking to people. Then you got to know that it was about this game going long and not ending much before the next game — when the betting closed — and the fact that there were going to be some bets that got graded out and some that didn’t.

Spears: You could see some people were starting to get their accounts updated, other people weren’t, and there was a vibe in the room of freaking out. People were angry, people were looking for answers.

Steinberg: I’m at the event, and I decided the best bet to make is on the Eagles +8.5. I want to wait until the last possible second, though, because I didn’t want people to see the bet that I was making because then they would react to it. So basically, I went to the DraftKings help desk like three minutes before the game started, and I go, “OK, do you guys see what bet I’m making? This is the bet I’m trying to make.” They seemed to be kind of confused, but I just wanted to be absolutely sure that if some error happened or something, that the DraftKings people would see that this is the bet I’m trying to make and to credit me with it if it didn’t work. This is a decision worth possibly a million dollars, and I just wanted to make sure that I’m taking every single precaution I possibly can.

Peabody: I’m at my hotel, I keep refreshing my screen. And then in a different tab I have the leaderboard and I’m like, what the hell, other people’s are graded, why is mine still pending? I was trying to load up my bet. Then kickoff happened way quicker than I thought. I hadn’t even changed the television to the other channel. I was focused entirely on my computer, not on the TV.

Peters: A lot of what happened in that last hour or so of betting was going to happen anyway. There were going to be people that were trying to take first place right at the end and figure out what their opponents were trying to do on the spot. Well, all of that was magnified by 10 because there was this whole uncertain, frantic nature, this totally unavoidable element that just threw everything off-balance. And it freaked everyone out. DraftKings was freaking out. It was pretty wild to be in there. And it carried over into that second game. As that second game kicks off, people are pissed, people are yelling, now it’s like, “What do you mean I couldn’t get my bets in?!” Before it was like, “Hey, could you fix this?” That turns into anger because people have a ton of money on the line, they weren’t able to get their bets in — and some people were able to get their bets in.

‘Man, this guy really feels like he was screwed here’

Peabody: Once my bet hadn’t graded and the game actually started, I took a picture with my phone of my computer screen, and I’m glad I did, just to show that, look, I’m not making this up. Also, why would I not bet? That doesn’t make any sense. You can have a few different strategies here, but not betting is not one of them. I called Jon Aguiar and he said, “Hang tight.” I was like, “Can I put a live bet in?” He was like, “Don’t do anything, we’re talking about it.”

Spears: I don’t think DraftKings should have changed the rules to allow live betting.

Peabody: Jon gets back to me like 20 minutes later, and I thought at that point, they’re going to have to do something about it. I didn’t think there was any way that they wouldn’t at least allow an option for live betting, or revert back to where we were. Because it just seemed like too big of an error, too big of a snafu — you don’t want to decide a contest by essentially a refereeing mistake. I realize it wasn’t malicious on DraftKings’ part, but it certainly made it a playing field that was not level.

Steinberg: I could see that some screen names had not been paid out yet. So there was some awareness there. But it wasn’t until I checked Twitter and saw Rufus tweeting that I realized, man, this guy really feels like he was screwed here, and his bet clearly didn’t pay out in time. So, that’s when it started to feel like, wow, there’s really kind of a controversy going on here.

Peabody: I Ubered over to the HQ and arrived there near the end of the first quarter. I thought my case was pretty simple. I didn’t think there was any way they would just let things stand the way they did. It’s like if they forgot to deal in a player in a hand at the final table of the World Series of Poker and didn’t declare a misdeal.

Peters: Rufus Peabody wasn’t on site for most of the event until it got to the point where he decided to come down and be like, “Guys, what’s happening with my bets? You need to fix this.” I remember him in the aftermath, he was just like pacing on a phone, nonstop, talking to whoever he was talking to, but he was not very happy with how things closed out.

Peabody: When they didn’t do anything about it, that’s when I got upset. But also, from my experience in life, if you just get angry at people, I think it makes it less likely you get your desired outcome. I was upset, but at that point, after the game had started, I was like, there’s literally nothing I can do right now to change things. I didn’t go yell at anybody. I actually think I was more upset after the game ended, when there was certainty that I would have won the million. And I remember talking to Jon Aguiar afterward and once I mentioned the possibility of talking to a lawyer, he was like, “I can’t talk to you anymore.”

Peters: You got the sense that, like how a professional poker player is used to winning and losing lots of money and is better able to handle bad beats in a lot of situations, it seemed like Rufus was calm because of that. As a professional sports bettor who bets a lot of money, I’m sure he’s endured swings so big that some people would throw up just from looking at them. It was clear that he was not happy, don’t get me wrong. But it’s not like he was throwing chairs in the corner.

Peabody: I remember Phil Hellmuth came up to me and said that it was really awful what happened. He said that it was pretty f—ed up, basically. I heard second-hand from multiple people about bets getting graded early. And looking through the CSV files that they made publicly available of all the bets, that included the times all the bets were decided, you could see there were prop bets graded early. DraftKings claimed that no bets were graded from the help desk. And I was like, Duh, of course they weren’t graded from the help desk. They can’t. It’s Kambi. But they were in contact. What I surmised is that people at the help desk were able to reach out to Kambi and get a trader to settle those markets. And these were markets that were not 100% guaranteed to win. They were probably 99.9%. Because if you bet an over on a guy’s rushing yards, as you saw with Patrick Mahomes in the Super Bowl, you can have some coach that decides to have the running back run backwards for 50 yards on the last play if they want just to run out the clock. It doesn’t happen often. But it’s possible. [Paying out props early] wasn’t the normal operations for Kambi. It was something they did at the behest of people involved.

Sigsbee: At the event, there was a lot of ruckus going on about it, and people running into the DraftKings offices and complaining. And Randy even got locked out. Randy’s idea was he wanted to go all-in on the second game. But he did make a live bet, I think in the fourth quarter of the early game, he live bet maybe $10,000 [actually, $5,700] of his $53,000. And that won, and that money didn’t settle in time for the afternoon game. So obviously, you want to get your entire bankroll into play on the afternoon game, he wasn’t able to bet it all because, same exact thing as everybody else, the money just didn’t settle in time.

Spears: I’m waiting for this money to hit my account so that I could put it all in on the Saints, I was going to go Saints moneyline plus the over, parlayed. The idea was to try to turn my $24,000 into something that would be able to compete. So, I was just refreshing the page, waiting to do a parlay of Saints moneyline plus over, refreshing, refreshing, refreshing. And it remained zero, the entire time. And the game started and they did not allow live betting on that last game. I was furious. I’d just been on this epic run to turn $2,000 into $24,000. I’d never done live betting in my life, and I had a 12x during a game, I’d had this amazing experience doing it and I was all juiced and ready to go all-in, try to finish in the top three. And I didn’t get to move. But, I was lucky I didn’t. Because I would have lost, and I would have gone to zero. I would have had zero dollars in winnings and zero dollars from the prize pool, instead I ended up at like $24k in winnings, and that was good enough to finish in 11th place overall, which paid another $25,000. So I bought in for $10,000, cashed out for $50,000.

‘I’ve never had a million dollar swing on anything’

Peters: In terms of who could win, we had it down to about a half-dozen scenarios that were in play, but for the most part, it was mostly looking at Randy Lee, Daniel Steinberg, and Rufus. They were the three people we were all keying in on, depending on the outcome in the game.

Steinberg: I was in the top four, and I wanted to make a bet that I thought was going to be a more popular bet, because that way it would be harder for people to catch up to me. Honestly (laughs) I don’t remember the considerations that much. I remember thinking, possibly I should just bet everything. But, you know, it was really not as calculated as it should have been. I basically just picked a number that was close to all of it but left me with something where if I lost the bet, I still would be left with a top-10 or top-20 finish or something.

Lee: I didn’t have my entire bankroll on it. I had a massive amount, though — it was enough to make sure that if anyone else doubled up, that they couldn’t beat me as long as I won my bet.

Sigsbee: At that point, you’re dealing with such an efficient market, there’s no edge to be had betting the Eagles or the Saints or one of them on the moneyline. Randy’s an Eagles fan, that’s who he wanted to bet on, that’s how the decision was made.

Steinberg: I realized almost immediately I couldn’t win, because I had the same bet, Eagles +8.5, as [Lee]. I realized it maybe like 15 or 20 minutes after the game started, and it was really depressing. In hindsight, if I bet it all, I would have won the million dollars. But, I can’t fault myself, at the time it seemed like the right decision, and maybe in a different universe it would have ended up being the best decision.

Peabody: I had a few things I’d been debating [about what bet to make on the final game]. I wanted to see where the leaderboard actually shook out to see what I needed. I didn’t think I would be in a position where I would have as big a lead as I did. I leaned to the Saints and, in terms of being contrarian, you were going to see a lot more people on the Eagles. But given where I was, I didn’t need to double up anymore. So I was going to take an alternate point spread and still go all in but for a lower payout and with a higher probability of winning the bet. So lay like -3.5/-170, or -4.5/-150. I was at $81,000, second place was at like $58,000. So the plan was, I thought I needed to get to the $120,000 mark or so. At that point, given how much liability I would have had on that bet — the swing would be like $1.12 million based on whether that bet won — I was going to want to bet something on the other side of the game too just to cover my ass a little bit. I’ve never had a million dollar swing on anything.

‘You feel like you’re going to have a heart attack’

Steinberg: After the bets were in, I went to my room for like two hours and didn’t even sweat the game. I mean, when you’re sweating for that much money, you feel like you’re going to have a heart attack. And it’s been three straight days of betting, I was just beat and I needed a break. So I went to my hotel room and didn’t even watch TV and just laid in bed.

Sigsbee: Randy bet the Eagles with the points, and the first five or 10 minutes of the first quarter, we didn’t know what everybody else had picked, so we were cheering for the Eagles. And the Eagles got out to an early lead. We were really happy. And once the picks came out and we realized a lot of people who were trailing had bet the Eagles moneyline, we started doing the math on it, and we’re like, oh dang — we’re cheering for the Eagles, but they can’t win. If the Eagles win, Randy finishes like fifth or sixth. So now we’re cheering for the Eagles to lose by less than 8½ but not win.

Peabody: The funny thing is, there was a scenario where I could have won despite being locked out. It almost happened. If the Saints had won by exactly nine, I would have won. They were up by six, 20-14, and their kicker Will Lutz missed a field goal, and if he had made that field goal I probably win and it’s all a moot point.

Lee: Watching that field goal, it’s kind of hard to describe, because I knew it was on the line. I can hold my composure pretty well, so I did the best I could. But I was definitely pretty anxious. And I’m not normally somebody who gets that sensation of anxiety. But it was there in spades. It was a huge relief that he missed it. But I knew I still had to fade the last five minutes of the game.

Sigsbee: That field goal, that’s a moment that in my sports betting life that I’ll remember forever. After the event ended, I bought all of my team and Randy, I got everybody Will Lutz jerseys, had them framed in a really nice presentation, and everybody has those up their office. Lutz missing it wide right, I’ll remember that kick forever.

Lee: On the next drive, I was praying for the long stop. As much as I’m an Eagles fan, in most Eagles games I’m not the guy getting the million-dollar paycheck. I wanted the Eagles to come up a little short. When that pass went through Alshon Jeffrey’s hands and got intercepted — Alshon was my boy in that moment.  

Sigsbee: After that, on the second-to-last play of the game, the Saints were up by six and they’re just trying to run out the clock, and they break through, there’s one Eagles defender left, he makes a shoestring tackle at like midfield. Who knows, maybe the guy just goes down if he gets past him, but sometimes they keep running for that meaningless touchdown. That would have been a million-dollar swing. That was a nerve-wracking play that I think a lot of people probably were not watching at that point.

Peters: The whole tournament, Randy Lee, no one really knew who he was, because his name on the leaderboard was like “rj” and then a bunch of numbers [actually, rleejr86]. So no one knows exactly who Randy Lee is. Until he wins. Then you can tell because he’s the one guy cheering.

Lee: It’s hard to describe. I felt this overwhelming joy. It kind of erupted out of me. Somebody got a video of me hooting and hollering, screaming at the top of my lungs. And I’m a pretty loud guy, so I can be a little over the top with my celebrations. I’m pretty sure the whole venue heard who won.

AUDIO: Listen to Randy Lee’s celebration

‘It all went haywire at the end’

Peters: The event was awesome, once it kicked off everyone was having a blast, but when you factor in the bet grading and the controversy over how it ended, it was like somebody came in and rained on the party.

Spears: What would have been the fair way to handle it? It’s tough. I don’t have a confident stance on it. If you make an exception for one person, you have to make an exception for everyone. How many people along the way were affected by it? How do you make a resolution of it? And I think we all had an understanding that something like this could happen.

Leong: I’m still confused about why the bets need to be graded and why it’s not just instantaneously pushed through. And I think if that’s how it worked, Rufus would win. DraftKings needs to fix this system. Because it’s just not fair.

Steinberg: I understand why Rufus would be upset. And I understand also why he wasn’t at the event itself. But I think he probably could have obviously taken more precautions in terms of his bet not paying out in time. If I was him, I would have been at the event and made sure I was able to talk to support or something. Help them help him out. If you’re in the top 10, you probably should be there.

Peters: If something happens, play it as it lies, as they say in golf. I mean, it’s unfortunate, yes, it stinks for several people. It stinks for DraftKings as well, because they’re involved in this thing that was supposed to be awesome and had a lot of good PR behind it, and the only thing that people were talking about coming out of it was that it all went haywire at the end and crap just blew up in their face. I don’t think there’s anything that they could have done on site. I know some people were like, “Why don’t you just open things up until the first half? Why don’t you open things up until the end of the third quarter, and change the lock?” Well, you can’t change the lock, because then it changes it for everyone and people would have been doing different things.

Spears: The fair thing would have been figuring out some way to extend it, but think about how much liability they open themselves up to when they change the rules for me and Rufus Peabody, and then Rufus Peabody wins the million. Sticking to the rules is the safest way to do it liability wise, and that’s what they did.

Lee: It’s hard to really speak on [Rufus’] behalf, I don’t really like to get into that typically, just because it’s really not my business. But with the fact that we were forewarned about the betting cutoff the whole tournament long, it’s hard to — I mean, I can sympathize because had it been me in that position I’m sure I would not be happy. It would sit pretty not great with me. But at this point, shoulda been, coulda been, woulda been, you know?

Peters: I think the result, with Randy Lee winning, is fine. That’s not to say people didn’t get screwed. Yes, people also got screwed. Both of those things can be true, unfortunately.

‘We turned it into about a three-day celebration’

Steinberg: I finished in second place and won $440,000. We went to a bar, me and Max and a few of our friends who live in New York, and got extremely drunk. I remember I tipped our waiter $100 and he said, “No, I can’t take this.” And I said, “I just won $400,000, just take it.” And we put on the song “Back in the High Life Again” by Steve Winwood. It’s a great song and it captured exactly how I was feeling.

Lee: DraftKings actually hooked it up big time. We went out to a steak dinner, had a seafood tower, couple bottles of wine, with a couple of the guys from DraftKings and my friends that were there with me. And then we went out to Manhattan and had a table, got some bottles in a club, drank all night. Then they put me up in a hotel room out there. Lot of drinking, lot of partying. I can hold my liquor pretty well, and I was on a pretty good high from the whole night in general. I do remember most of the night, but there are some parts that, it’s like, well, I definitely had my fill to drink.

Winner Randy Lee: An Eagles fan, but not that Sunday

Sigsbee: That was really cool, they treated Randy first class that night. They took us into Manhattan and had a table at like the nicest nightclub in Manhattan, they brought out the lit-up sign for Randy, calling him the DraftKings national champion. They recognized him on the speaker at the nightclub. And then they gave Randy a wraparound suite on the penthouse floor of a hotel overlooking the Hudson River. Then Randy and I went from there down to Borgata, and we’re kind of just waiting around until the payment came through. We got a big suite at Borgata, we went to a big sushi dinner, and went out that night. We turned it into about a three-day celebration.

Peters: So Randy wins, and I heard a rumor going around that Shane Sigsbee was a little worried about not knowing the guy a ton and just letting him go and do whatever until the money came in. So the word was he threw a party for the guy and got him so drunk that he wouldn’t be able to leave until he could make sure he went to the bank with the guy to transfer the money.

Lee: It wasn’t necessarily anything like that. He wasn’t necessarily worried he wasn’t going to get paid or anything. Maybe that’s in the back of his mind, but … nah, he invited me to stay at the Borgata. He had some stuff going on out that way. And then had his flight from out of Philly. And we were kind of hanging out, drinking.

Sigsbee: Randy and I are good buddies. If I was close to him for those two days, I think it was just as much us celebrating, having a good time.

Lee: In the end, we agreed to keep the amounts we each got private. It’s not something we wanted to air out. I’ll just say I got a very healthy share. I think we’re both very happy with how everything worked out.

Champion Randy Lee celebrates his victory with poker great Phil Hellmuth

‘I have not taken any legal action against DraftKings yet

Peabody: We filed a complaint to the New Jersey DGE, and their response was basically that DraftKings said everything was OK. They responded, “The Division interviewed various DraftKings officials, reviewed the terms and conditions, rules of play, and various reports. The Division determined that DraftKings had adequately advised all participants that wagers on the Chargers game may not be settled before the start of the Eagles game. The Division also determined that DraftKings did not exhibit favoritism to any tournament participant. The Division confirmed with DraftKings that all wagers were settled offsite in accordance with DraftKings’ normal settlement procedures. Furthermore, the first- and second-place finishers had sufficient monies remaining in their wallet to wager on the Eagles game whether or not the Chargers game had been settled prior to the start of the Eagles game. Therefore, based upon the Division’s review of the information obtained during its investigation, no regulatory violations were found.” Here’s what I don’t get. If the DGE was investigating behavior by an individual, a bettor, they wouldn’t just ask the bettor. There would be more than just, “Hey, did you do this?” There would be an actual investigation. Whereas here, it was like they were working with DraftKings. They asked DraftKings, and there was no follow up to that. There was no finding out how or why these bets were graded early. They never even looked into that. I think regulators have a vested interest in protecting operators because that’s who’s paying their salary.

Leong: Mac Verstandig was my lawyer, he’s a really well-known lawyer in the poker community. I had a discussion with him about what he thought our likelihood of winning the case would be, and based on what he said and on the facts of the case, it felt like there was a very legitimate case.

Peabody: There was a class action. I didn’t want anything to do with that.

Leong: We filed the suit. I expected Rufus to join in, but I never talked to him about it. When he didn’t, I figured it was because he was going after bigger money. 

Peabody: My lawyer said that I had a much stronger claim than anyone else there, I didn’t want to dilute myself by being part of that class. I think there were maybe a total of 12 or 15 people who were impacted, and they weren’t in line for big-money prizes. I have not taken any legal action against DraftKings yet. My lawyer’s gone back and forth with their general counsel. But we actually gave them a proposal back in April of a mission statement for a non-profit, at the time it was going to be called Level Playing Field, which was going to be a consumer protection non-profit for sports bettors. We asked at one point for them to, in lieu of paying a settlement to me, to basically make a donation to launch this non-profit.

Leong: It turned out that it’s really hard to win a fight against casinos and sports gambling and all that — they have all the unlimited resources as well as all the politicians in their pocket. DraftKings didn’t offer us anything. They didn’t offer us a dime. I believe they hired one of the top lawyers in New York City. They took it pretty seriously. I got nothing at all out of it.

‘I’m very excited about this concept for the future of sports betting’

Peabody: It feels like the biggest gambling loss I’ve had, in a way. Even though I didn’t lose money. In fact, I won money. But given what I would have won, it did not feel like something worth celebrating. When I have these big wins or losses in sports betting, it makes me realize how little money matters. Because it doesn’t materially affect my life. If I have a week where I win $100,000, it’s not like I’m going out and buying a new car. That money, it provides more security, but I’m not a huge spender. And same if I lose $100,000 in a weekend, it’s not like I’m eating ramen. I mean, I’ve been doing this for over a decade now. In a way, betting for a living has made me a more patient, calm person. And it has enabled me to handle adversity better. Because there is so much that is outside your control on a daily and weekly basis. And I’ve learned to only stress over what I can control.

Lee: The money’s done a lot of different things for me. I went on some vacations, spent a little bit, fixed the car up, did this, did that. I actually recently built a bison farm, Buck Wild Bison is the name of the company. I had been involved with it for a couple years up to that point, we hadn’t broken ground and started any construction before the event, so that helped with a lot of the costs — building the farm, getting animals, things of that nature.

Sigsbee: Anytime you win a — let’s call it a six-figure amount — it’s definitely life changing. Sports betting is hard. It’s what I do for a living, and even the best sports bettors in the world, they’re picking on such tiny edges. You’re picking off a 1% edge or a 1.5% edge. Anytime you have a score like this, that makes up for a lot of months of revenue.

Leong: I love DraftKings. I know I tried to sue them, but I did it because I thought they did something wrong. I think that in the bigger scheme of things, I think DraftKings is definitely the greatest sports gambling company in the world, and I hope that they fix the system and keep doing what they’re doing, I have faith in them. They’re the leader in the industry, I know they’re going to make it right — maybe not make it right with me personally, but I know they’re going to fix the system somehow.

Peabody: I thought the event was a good idea. I think it was a lot of fun. I don’t think the execution was great. I think there was a lot they hadn’t planned for. But hopefully they’ve learned from that. I actually read through the rules [they posted for the planned March event]and it looks like, there’s a whole section, they might as well call them the Rufus Rules. They definitely are in response to what happened the last time.

Spears: I think they’ll figure out something to do to deal with the issue of locking all the bets within a time range. That shouldn’t be too hard. I think they should change the rules, maybe it’s just live betting for the first quarter but it’s not props and scoring props, it’s the game line itself. So if the game starts and you didn’t get to go all-in like you wanted to, you can still go all-in on the live line. And then the other big thing was they paid out player props before the games were over, subjectively. That’s an easy one to fix. Don’t pay player props early. Don’t pay a bet until it’s a dead lock. 

Peters: I think it’ll go more smoothly next time, because they’ve gotten that first one out of the way. They had probably the worst thing that could happen to them happen, so they can work to address that, fix it. In my mind, there’s no way they could not have learned from what happened the first time.

Sigsbee: I would love to get a piece of Randy again for the next one. The run he had, with the bets he was making, was impressive, and of course I’d love to have a percent of him again. I don’t know if he needs me (laughs), don’t know if he needs my capital backing. But maybe we’ll rekindle the magic.

Lee: I would probably still look to sell some action next time, just because, it’s a lot of money, man. Even when you have money, to go in solo on a pretty serious sports betting competition with as many true competitors as there’s going to be, I wouldn’t want to do it myself.

Spears: It was a wild ride. I’ll do it again, I’m really looking forward to it in football season, that’s what I know best. Live betting that Patriots vs. Chargers game on Sunday, that was such an extreme rush. I’m very excited about this concept for the future of sports betting.

Steinberg: I’m going to play next time no matter what. I’ll buy in even if I don’t qualify. I love the event. I’m going to do ’em all, for sure.

Photos by Donnie Peters and Brett Smiley

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Eric Raskin

Eric is a veteran writer, editor, and podcaster in the sports and gaming industries. He was the editor-in-chief of the poker magazine All In for nearly a decade, is the author of the book The Moneymaker Effect, and has contributed to such outlets as ESPN.com, Grantland.com, and Playboy.

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