DraftKings Fined $100K, Scolded By New Jersey For ‘Gross Errors And Failures’ In Wagering Data
In a letter sent to DraftKings on June 16, DGE Acting Director Mary Jo Flaherty described the operator’s conduct as “unacceptable.”
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The New Jersey Division of Gaming Enforcement has smacked DraftKings with a six-figure fine and a verbal undressing for reporting inaccurate sports wagering numbers over several months, the Associated Press reported Monday.
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.”
The DGE levied a $100,000 fine against DraftKings for the offense.
Every month, each of New Jersey’s 16 licensed mobile sportsbooks has to report its financials in a number of categories, including handle (amount wagered) and revenue, broken down by sport, with multi-leg parlay bets separated out. According to the DGE, DraftKings Sportsbook overreported the amounts wagered on parlays and underreported in other categories.
DraftKings has consistently been one of the top two books in New Jersey by handle and revenue (along with FanDuel) since online sports betting launched in the state in the summer of 2016, with the exception of a blip early in 2024 that saw Fanatics Sportsbook briefly overtake DraftKings — owing, it is believed, to some VIP customers taking their business from DK to Fanatics.
Tax implications
All online operators in New Jersey are required to tether to a land-based partner, and DraftKings falls under the Resorts Digital umbrella. The AP reported that because of DraftKings’ erroneous data, the tax returns Resorts filed last December and this January and February were incorrect.
Both DraftKings and Resorts declined to comment to the AP.
According to the New Jersey DGE, DraftKings blamed the mistakes on a coding error in an update to a database. The company told the DGE it has since corrected the coding error.
Flaherty revealed in her letter that the errors came to the DGE’s attention after regulators in Illinois and Oregon identified problems with DraftKings’ revenue reports in their states.
Longtime New Jersey DGE Director David Rebuck retired in February, and Flaherty was announced as his interim replacement.
DraftKings operates legally in 25 U.S. states. New Jersey was the first one in which the mobile book launched. DraftKings also operates an online casino in New Jersey.
