PropSwap Changes Rules After Payment Squabble

PropSwap, a marketplace where people buy and sell active sports betting slips, has announced big changes to how it operates. This comes after many people got upset about a recent payout problem, involving a big futures bet. The company got into trouble when a seller thought they would get $37,000 but ended up with much less money because of taxes.

PropSwap Admits Error in Tax Mix-Up, Promises Reforms After Online Uproar

The incident caused an outburst of anger on social media platforms, with users blaming the company for its lack of openness and failure to meet its obligations. PropSwap’s bosses said they had told the customer beforehand that any ticket put up for sale must show the amount after taxes. Even so, the bet got the green light and was sold at the full price before taxes.

Luke Pergande, the CEO of PropSwap, admitted that the company had slipped up. He explained in a statement made to Next.io that although the customer had watched a video and received several emails about tax expectations, the listing was allowed to go ahead by mistake. To make amends, PropSwap has chosen to pay out the full amount from its own pocket — even though it is not legally bound to do so — as a show of good faith.

Going ahead, PropSwap plans to add manual checks for all mobile ticket listings to stop similar errors from happening again. Pergande stressed that their company’s smaller size allows them to have more direct quality control, unlike bigger platforms such as eBay.

Bonus Offer Backfires as PropSwap Struggles to Rebuild Trust After Betting Slip Scandal

The issue also sparked new talks about the company’s part in making bets possible. Pergande made it clear that PropSwap does not and cannot guarantee bets without being called a sportsbook, a label that brings heavy rules and taxes in Illinois. He also pointed out the limits of their business plan, saying that the platform takes a small cut compared to other resale markets like StubHub.

However, the hit to PropSwap’s image might be irreversible. X (formerly Twitter) users showed anger, with some removing the app and others demanding legal steps. People questioned the platform’s trustworthiness and business morals, with one user saying it made more sense to do these deals on your own than to pay fees to a company that does not guarantee payouts.

To make things worse, PropSwap’s attempt to counter the backlash by giving a bonus to new users was seen as a crowdfunding effort to cover the disputed payout. Pergande said no to this, explaining the offer aimed to get critics to try the platform firsthand — not to fund the original bet.Even with the criticism, PropSwap stays focused on winning back its users’ confidence. Pergande pointed out that this marks the company’s first big issue in its decade-long run and stressed that the insights gained from this event will help make the platform more robust in the future.