Reverse Play: New Jersey’s Online Casinos May Face Fines If They Keep Incentivising Customers to Cancel Withdrawals

Author Thomas Wolf
January 21, 2021 3 min read

New Jersey online gambling regulator, the Division of Gaming Enforcement, has told operators there that they will be fined if they keep offering customers bonuses to reverse their pending withdrawals.

Allowing and even encouraging withdrawal reversal used to be common at online casinos across the world. However, as awareness and media attention on problem gambling has risen, the practice has fallen out of favor.

Some markets, like the United Kingdom, have banned the practice completely in recent months.

Critics claim it encourages irresponsible gambling behaviors. It bypasses the “cooling off” period that a customer goes through after a withdrawal before deciding if they want to gamble again.

“This is a naked attempt by online gambling operators to get citizens to lose more money,” one anti-gambling campaign group representative from New Jersey told ABC News.

Improperly Encouraged

“Operators should clearly understand that the Division will take regulatory action and impose civil penalties whenever patrons are improperly encouraged or incentivized to rescind their withdrawal requests for the purpose of resuming gaming activity,” the DGE said in a statement on their website.

New Jersey online casinos have been regularly smashing revenue records each month since the market launched last year. They took over $1 billion in bets in December 2020 alone.

Online casinos accounted for nearly $100 million of that total.

The leading Golden Nugget online operation pulled in $29 million in December and amassed a yearly revenue of $95 million. That’s three times the revenue of its land-based Atlantic City counterpart over the same period.

Longer Than Needed

However, the DGE said it has received dozens of complaints in the past few months about online casinos and betting sites taking weeks to process withdrawals.

This in itself is not a regulatory breach, as there’s no hard and fast rule on withdrawal speed under current laws.  

That’s because delays can happen in the withdrawal process – for example, during Know Your Customer (KYC) or anti-money laundering checks.

Withdrawals must be processed “without any delay longer than needed to perform an anti-fraud or anti-money laundering check,” says the current legislation.

But “encouraging or enticing them to reverse the withdrawal request and wager the funds” during this waiting period is “unacceptable” to the DGE, said its director, David Rebuck.

Telling a customer they’ll have to wait for their withdrawal but then allowing them to cancel it and have instant access to it for more gambling is not a good look.

Real-Time Withdrawals

Not all New Jersey operators use this questionable tactic.

Richard Schwartz of Rush Street Interactive told ABC News that 75% of his customers had received “real-time” withdrawals in the last year. He didn’t clarify exactly how long that was, but less than 24-hours is the expectation.

“Our automated payout system protects our players by enabling them to cash out quickly so they don’t otherwise cancel their payout requests and continue gambling with their winnings,” he said.

Clearly, many online casinos are aware of the potential problem. Let’s hope all parties amicably agree on this issue so it doesn’t become a sticking point in negotiations on potential future legal markets across the US.

For the latest updates on this New Jersey online casino story, plus much more from the online gambling world, keep checking our pages!

Author Thomas Wolf


Thomas Wolf

409 articles

Thomas Wolf is our editor in chief. With an extensive background in online gambling (both working for casino operators and game studios) as well as an MBA from the Thunderbird School of Global Management, he's a proper authority on online casinos. When not running the day to day operations or reviewing new operators Thomas is a blackjack aficionado with some seriously big wins recorded at land-based casinos in both Las Vegas, Monaco and Macau.

Leave a Comment

Your email address will not be published.