DraftKings has landed in hot water with Garden State regulators.
The New Jersey Division of Gaming Enforcement fined the online sportsbook $100,000 and sent it a stern rebuke letter for providing the state with inaccurate sports betting data, the Associated Press reported Monday.
DraftKings overreported the amount wagered on multi-leg parlays and understated dollars wagered in other categories. What the NJDGE called “unacceptable behavior” forced regulators to correct financial data for several months.
“These types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system,” Mary Jo Flaherty, acting director of the NJDGE, wrote in a letter to DraftKings on June 16.
How it happened
The NJDGE said in the letter that DraftKings blamed the mistake on a coding error that miscategorized bets in a newly updated database. DraftKings said it didn’t think the inaccurate data affected gross revenue and tax reports, so the online sportsbook didn’t address the matter promptly.
However, that turned out not to be the case. DraftKings, partnered with Resorts Digital, made mistakes that led the land-based-tethered operator to file incorrect tax returns in December 2023 and January and February 2024.
The documents were recently corrected and refiled.
Fixing the issue
DraftKings told New Jersey regulators that it has corrected the coding error.
“We value our relationship with the DGE and are committed to ensuring compliance with all regulatory guidelines,” a DraftKings spokesperson told Covers. “There was an error in the reporting of our wagering mix breakdown to the state that we have corrected by implementing additional controls.”
DraftKings operates in 25 U.S. states and is one of the leading market-share operators for New Jersey sports betting.
The six-figure fine won’t make much of a dent in DraftKings’ Garden State operations. The online sportsbook has generated $123 million in revenue, the second-highest in New Jersey for the first five months of 2024.
