NJ Sports Betting Regulator Fines DraftKings For ‘Weaknesses’ In Business

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NJ sports betting

NJ sports betting regulators have fined one of the leading US sportsbook operators $100,000 for “unacceptable conduct.” 

The New Jersey Division of Gaming Enforcement issued DraftKings a $100,000 fine for reporting inaccurate sports betting data. The sportsbook operator overstated money wagered on parlays while understating other types of NJ sports betting wagers.

“These types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system,” DGE Acting Director Mary Jo Flaherty wrote in a letter to DraftKings. “They evidenced weaknesses in DraftKings’ business abilities and casino experience and unacceptable conduct in dealing with regulations and requisite reporting and financial systems.”

DraftKings NJ sports betting mistake

DraftKings’s inaccurate bookkeeping caused its partner, Resorts Digital, to file incorrect tax returns in December 2023 and January and February 2024.

DGE’s Office of Financial Investigations learned of similar issues in Illinois and Oregon and believed it could be happening in New Jersey, according to Flaherty’s letter.

DraftKings responded to the state, suggesting a coding issue in a new database caused the inaccuracies.

DraftKings fixes coding error

The company has told the state it has fixed the issue. It also said it has created additional monitoring of its data to flag unusual changes.

DraftKings believed it was not an urgent issue as it did not affect taxable revenue, according to information in the DGE letter. The regulator said it is a “critical component of the monthly tax return.”

Flaherty noted the state had to reissue statistical data in a press release, which had not happened “since at least 2011.”

Other June NJ fines

The DGE also issued a $2,000 fine to FanDuel for an April 2022 sports betting regulatory violation. 

It also imposed a $15,000 penalty against Caesars, Harrah’s and Tropicana for employee license violations. The companies employed five individuals “serving more than one of the AC licensees” without proper endorsements.

Photo by Shutterstock/Maryna Pleshkun