LSB Feature: The Rise And Potential Fall Of Proxy Betting

Proxy betting has been a staple in the gambling space for many years.
With more states legalizing sports betting, the need for proxy bettors has decreased.
DraftKings recently froze a bettors account for using a proxy to place a $3 million wager.

LAS VEGAS – Almost as synonymous with gambling as the term action, proxy betting has been a staple in the sports betting space for seemingly generations.

Many middlemen (and women) have grown thriving careers are proxy bettors for those who can not physically place their wager for one reason or another. With more states having their own legal sports betting market, the need for proxy bettors has slowly become obsolete.

The Rise

Proxy betting was almost a necessity in sports betting before the repeal of PASPA, the Professional and Amateur Sports Protection Act that prevented most states from having their own legal sports betting markets.

Because of this, many bettors would simply pay people in Las Vegas to place bets for them. This way, players would not need to travel out of state but still be able to bet on some of the biggest sporting events of the year.

Celebrity bettors like Floyd Mayweather Jr. is known for sending proxy bettors to major Vegas casinos to wager on sports to this day.

Many proxy bettors even made a career of placing bets for people. Matt Simo and Toni Nelson, for example, are two of the most prominent names in sports betting.

The pair have spent many years placing bets for out of towners in the era before PASPA’s repeal. Sports betting was only allowed in states like Nevada at the time, making Las Vegas the center for betting on sports.

“You try not to put too much pressure on yourself,” said Matt Simo about placing David Frohardt-Lane’s wager. “But if I messed up one of David’s picks … I could have cost him hundreds of thousands of dollars.”

Guys like Simo and Nelson’s job was simple, collect the money from the client, place the bet at a Las Vegas sportsbook that the client wants, and then collect a fee for their services.

It was a symbiotic relationship that allowed prominent out of town sports bettors to bet on sports from the comfort of their homes. This system went on for some time until the 2018 repeal of PASPA allowed other states to legalize sports betting.

The Risks Of Proxy Betting

Proxy betting was never a completely smooth process for sports bettors, however, as many things could and have gone wrong with the transaction.

There was recently an issue with a $3 million parlay accepted by DraftKings in New Jersey that has shed light on one of the biggest risks when it comes to parlay betting.

The unnamed Florida bettor took action on Georgia to win the SEC East, the Packers to win the NFC North, and Alabama to win the SEC West. If the parlay hit, the bettor would have collected more than $5.5 million.

However, the problem is the sports bettor was in Florida at the time he placed the wager. The Florida bettor hired a proxy bettor to place his wager at the DraftKings sportsbook in New Jersey.

When DraftKings got wind of this, they froze the sports bettor’s account, barring him from placing any more wagers claiming a violation of DraftKings policy. The New Jersey Division of Gaming Enforcement (DEG) is currently investigating the case.

According to Rule 13:69N-1.10 of the DGE permanent sports betting rules, proxy betting is indeed not allowed.

“No licensee shall knowingly accept a wager from a person on behalf of any other person. No licensee shall knowingly allow a person to make a wager utilizing the account of another person,” states the New Jersey Division of Gaming Enforcement, Permanent Sports Betting Rules.

Proxy betting from across state lines is in many cases viewed as a violation of the Wire Act of 1961. The Wire Act bans the transfer of funds across state lines for sporting events.

This law was put in place to stifle the mob who at the time had control of the horse racing market.

Situations like the DraftKings story are a common reason why fewer sports bettors are using proxy bettors to place action on sporting events.

Do We Still Need Proxy Bettors?

Now there are nearly two dozen states with their own legal sports betting markets and local regulated sportsbooks. This makes the need for guys like Nelson and Simo to be in less demand.

The risks when it comes to proxy betting is high, and the need for sending a proxy bettor is offset by the prominent access to online and mobile sportsbooks.

While there are plenty of states who do not have regulated sports betting in their legislation, international sportsbooks have those states covered, allowing sports bettors in all states legal access to betting on sports.

The need to pay someone to place a wager in one’s stead has become less and less frequent. With more states legalizing sports betting every year, proxy betting will continue to be an antiquated system.

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Giovanni Shorter

Coming from a background in narrative-based writing, Giovanni strives to write stories that will keep the reader engaged. Although he does pride himself in being accurate, how the story is told is also very important to him. When he’s not keeping readers up to date on sports betting laws and legislation, you can find him writing and recording music, playing videogames, or engaged in heated sports debates with his friends.