You’re My Butterfly

How did a Jacksonville Jaguars employee get away with a $22 million theft? The short answer is a lot of people were asleep at the wheel and woke up in Crazy Town.

$22 million. That’s what a Jacksonville Jaguars employee allegedly stole in large part to play daily fantasy sports. The story can be found here (if you somehow haven’t come across it already), but the crux of it is a (now ex) Jacksonville Jaguars employee, Amit Patel, is accused of stealing funds from the Jaguars’ virtual credit card program to purchase luxury items and place bets through online gambling websites.

Patel’s attorney, Alex King, said his client “used VCC funds to gamble on Daily Fantasy Sports.” Per the attorney, 99% of the misappropriated funds were related to gambling losses. However, as noted above, there were several luxury purchases, including a condominium, cars, and a $95,000 watch, according to the Florida Times-Union.

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There are also indications that Patel is one of the biggest DFS whales, which, if true, helps explain the mind-numbing losses he racked up playing DFS.

“Hearing that the Jags employee who stole $22 million was ParlayPicker makes sooooo much sense,” well-known DFS player Matt “SamENole” Smith tweeted. “He would constantly do huge trains in high stakes, would occasionally have players who weren’t even in lineups, and other times didn’t even enter a lineup at all after registering.”

ESPN’s David Purdum wrote an excellent article on ParlayPicker and the DFS losses the account has accumulated.

Still, whether gambling accounted for $22 million or $2.2 million, the situation should be a wake-up call on several fronts.

Next Stop: Crazy Town

Over on LinkedIn, Jonathan Michaels of Michaels Strategies pointed out some of the responsible and problem gambling challenges the industry needs to come to grips with:

1. Solutions need to be cross-platform - players don't discern between sports betting, daily fantasy sports, online casino, lottery, horse racing, etc. - so why do all our solutions only fit into one of those buckets?

2. The need for proper channel checks on high-level players - while the lack of FinCEN guidance on AML responsibilities in the online space presents a challenge, there is no way an operator should take these kinds of bets without doing enhanced KYC on a customer.

3. The use of technology to identify problematic play - solutions exist today to help identify when players are crossing into problematic play, but the use of those solutions in the US market is few and far between. Operators need to find proper solutions to identify these types of behaviors before this type of situation happens again....and again....and again.

Michaels makes very good points, but #2 is the one I want to key in on. As I said on X when the story broke, “If this is accurate, it raises a number of questions. #1 in my mind: how can a licensed operator let some average Joe rack up six-figure losses, let alone 7, possibly 8-figure losses in what sounds like months?”

Bryan Bennett, the former CEO of BetFred US, had similar questions, “How the hell did he fly under the radar for so long with that kind of volume? Not only under the team’s radar but the operators as well. A fraction of this volume would have triggered a source of funds review at most/all sportsbooks to adhere to AML and RG controls. Crazytown.”

When we consider the amount someone needs to wager to rack up $7 or $8 million in losses, it’s clearly a trip to Crazy Town, as the total amount wagered would typically be 10-20x the amount lost.

What Should an Operator Allow Someone to Wager?

That raises the question, at what point should an operator step in and begin to ask questions about the size and frequency of a customer’s wagers?