Sports gambling sites crash during Super Bowl amid surging demand

• FanDuel, DraftKings, Penn's Barstool App and BetMGM all experienced technical issues just before and during the Super Bowl.
• MGM's Nevada retail sportsbooks were unable to accept bets during the game.
• Global sports betting provider Kambi blamed a surge on a player-specific bet.

It should've been the night to lure new customers onto their platforms. Instead, technical disruptions and crashes left the biggest sports gambling platforms cringing and scrambling to solve unexpected problems.

In Nevada, BetMGM's app crapped out. Ten minutes before kickoff, MGM's retail sportsbooks found they could not accept bets. And while disgruntled patrons complained on social media, technicians worked furiously to find and fix the problem. By game's end, the problem still had not been fixed, and MGM was not immediately able to settle bets.

Gamblers who found themselves unable to place bets were not kind — in the kind of cursing and criticism normally reserved for athletes playing for opposing teams.

One person wrote on Twitter, "[sic] how is it that i'm seeing fanduel commercials on my television almost rubbing it in that i can't even place a bet on your app that crashes any time there's a reasonably large sporting event."

FanDuel's ads played prominently in the lead-up to the game, encouraging customers to sign up for free play and chances to win on the platform.

In a statement, the company that the outages were intermittent and a result of demand that exceeded expectations, but insists at no time did its platform stop operating. The technical glitches were apparently most troublesome in Michigan, which just legalized sports betting in January.

That explanation surprised industry insiders and those who run other sports gambling platforms.

"We all expected this to be a record-breaking event for online and mobile gambling," one leading executive told CNBC. "We had tech meeting after tech meeting leading up to Sunday to make sure things ran smoothly."

Penn National Gaming's Barstool Sports app went down, blaming third-party tech issues. It stopped short of pointing the finger at one of its partners, global sports gambling provider Kambi. But DraftKings did.

In a statement, DraftKings said, "It appears this outage was caused by a surge in traffic that caused problems for our backend provider. Our DFS (Daily Fantasy Sports) and pools products, supported by in-house technology, are functioning without issue. This incident is why we believe owning our own technology is important."

DraftKings announced last summer, it would terminate its partnership with Kambi by September 2021.

Kambi told CNBC it processed the highest ever bet volumes in its history, three times more than last year's Super Bowl. And it added the problem wasn't overall load, but instead "one specific player-related bet offer and its increased range of outcomes offered." That resulted in a backlog validating other bets and resulted in problematic performance.

Other sports betting platforms including William Hill and PointsBet said their operations were unaffected by technical issues.

"It helps, being in sole control of your technology," PointsBet CEO Johnny Aitken said.

DraftKings sent $20 credits to players it assumed had been affected by the outages.

FanDuel said despite the issues, customers still enjoyed a winning evening. They paid out $27 million to customers, $17 million of which went to new players.

"The stress on the platforms is an indication of how big the potential is for sports gambling," said Union Gaming analyst John DeCree. "I don't think one incident on the biggest night of the year is going to dissuade these players permanently."

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