DraftKings False Report Fines: NJ Hits Sportsbook for $100K
New Jersey Says Sportsbook's Conduct 'Unacceptable'
The New Jersey Division of Gaming Enforcement is unhappy with DraftKings and didn’t pull any punches in its dealings with the company.
The state’s gambling regulators fined DraftKings $100,000 after it reported inaccurate data to the state. The error in the report caused Resorts Digital to file three months of incorrect tax returns to the state.
The DraftKings false report fines of $100,000 came after the sportsbook voluntarily offered to pay that amount. The DGE is allowed to fine sportsbooks up to $20,000 per violation, but it accepted the DraftKings proposal.
DraftKings reported more money was wagered on parlays than actually was, but underreported the amount bet on other sports. That caused state gambling regulators to have to correct several months of sports betting data.
“These types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system,” Mary Jo Flaherty, acting director of the DGE, 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.”
The letter to DraftKings was dated June 16, but was just recently released to the public.
The DraftKings false report fines aren’t going to hurt the sportsbook. The sportsbook reported $123 million in revenue through May of this year. It’s not a good look for the online sports betting giant, however. People expect more from one of the big names in the industry.
In a letter sent to DraftKings on June 16, DGE Acting Director Mary Jo Flaherty wrote, “These types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system.” Flaherty, not mincing words, described DraftKings’ conduct as “unacceptable.”…
— casino_reports (@casino_reports) July 8, 2024
New Jersey Not the Only State to See Reporting Errors
One reason the DGE was so harsh on DraftKings is the problem has occurred in other states. Flaherty’s letter said in March the DGE noticed DraftKings had reporting issues in Oregon and Illinois. It believed the same thing was happening in New Jersey.
If DraftKings had reported the issue itself, the DraftKings false report fines would likely have been less. Since the state discovered the errors, there wasn’t much leniency.
DraftKings said it has corrected the problem.
“We value our relationship with the DGE and are committed to ensuring compliance with all regulatory guidelines,” DraftKings said in a statement. “There was an error in the reporting of our wagering mix breakdown to the state that we have corrected by implementing additional controls.”
DraftKings said it did not notify the state as it did not believe the error affected taxable revenue. It said it added additional monitoring and trained staff to ensure correct numbers were reported going forward.
New Jersey is one of the biggest states in terms of sports betting revenue. It has plenty of bettors who enjoy wagering their expert picks, so DraftKings tries to stay on their good side. It’s unlikely the same error will occur again.
DraftKings received a bit of a black eye for the error, but can now get back to doing what it does best. That’s accept wagers from sports bettors of all experience levels.
- DraftKings takes bets from longtime bettors to those who need a betting odds calculator to figure parlay payouts. It will pay a little more attention to its reports in the future.
For Gambling news, odds analysis, and more, visit Point Spreads Sports Magazine.
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