DraftKings avoids bigger fine following “gross” sports betting data errors

Article by : Charles Perrin Jul 12, 2024

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DraftKings has agreed to pay a $100,000 fine imposed by the New Jersey Division of Gaming Enforcement following a slew of inaccurate sports betting data errors that were spotted.

From December 2023 through to February 2024, DraftKings got entangled in a reporting snafu that led to Resorts Digital, the company’s land-based sports partner, filing incorrect sports betting tax returns to the state.

The errors stemmed from overstating the amount of money that was wagered on multi-tiered bets, more commonly known as parlays, as well as other betting categories.

Every month, each of NJ’s 16 licensed mobile sportsbooks are required to report its financial data across a plethora of betting types, but in some categories, DraftKings misreported information.

But the DGE took a dim view of DraftKings’ activity, with the regulator’s acting director, Mary Jo Flaherty, refusing to mince her words on the gaming company’s conduct.

In a letter to DraftKings, Flaherty wrote: “They [DGE] evidenced weaknesses in DraftKings’ business abilities and casino experience and unacceptable conduct in dealing with regulations and requisite reporting and financial systems.

“These types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system.”

It is thought that the DGE could have pushed for a bigger fine under the New Jersey Casino Control Act as there were dozens of errors uncovered.

Each reporting violation normally carries a penalty of $20,000, however DraftKings offered to pay the DGE $100,000, and this was accepted.

The errors were believed to be the first in the post-PASPA era in New Jersey, and over the past few years, DraftKings has been one of the top performers in the state.

Since then, DraftKings has compiled a remediation plan to the DGE following the spate of criticism. The company insists additional controls and corrective measures have now been put in place to guard against future problems.

Nevertheless, DraftKings has come under the spotlight, and their activities will be scrutinized more closely moving forward.