The New Jersey Division of Gaming Enforcement has levied a $100,000 fine against DraftKings Sportsbook for “unacceptable conduct.”
Gaming Enforcement accused DraftKings of overstating money bet on parlays while also understating other types of wagers in New Jersey. This inaccurate reporting caused DraftKing’s partner Resorts Digital to file incorrect tax returns in December 2023 and January and February 2024.
In a letter sent to DraftKings New Jersey Division of Gaming Enforcement Acting Director Mary Jo Flaherty said, “These types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system. They evidenced weaknesses in DraftKings’ business abilities and casino experience and unacceptable conduct in dealing with regulations and requisite reporting and financial systems.”
According to Flaherty’s letter to DraftKings the Division of Gaming Enforcement Office of Financial Investigations learned of similar issues occurring in Illinois and Oregon and believed it could also be happening in New Jersey which resulted in an investigation.
DraftKings responded to the investigation saying that a coding issue in a new database was to blame for the inaccurate reporting. DraftKings also said the coding issue has been fixed and new data monitoring was put in place to flag any issues like this in the future.
DraftKings did not believe it was an urgent issue as it did not affect taxable revenue, but Gaming Enforcement responded that it was a “critical component of the monthly tax return.”
DraftKings wasn’t the only sportsbook in New Jersey to be fined by Gaming Enforcement in June. FanDuel Sportsbook was handed a $2,000 fine for an April 2022 sports betting regulatory violation, and Caesars, Harrah’s, and Tropicana were all fined $15,000 for employee license violations for employing individuals serving more than one of the AC licensees without proper endorsements.