New Jersey Gambling Regulators Fine DraftKings $100,000
Gambling Regulators in New Jersey are not playing around when it comes to sportsbooks accurately providing their sports betting data. As such, New Jersey Gambling Regulators Fine DraftKings $100,000 and a verbal warning for doing just that.
Each month, all 16 licensed mobile sportsbooks in New Jersey have to submit their financial reports covering various categories. These reports include details on their sports betting handle and their revenue, categorized by sport. Furthermore, they also have to report and categorize multi-leg parlay bets separately.
However, according to the New Jersey Division of Gaming Enforcement (DGE), DraftKings has been inaccurately reporting the sports betting data.
New Jersey Gambling Regulators Fine DraftKings Over Inaccurate Betting Data
According to sportsbook PPH industry news, the mistake by Draftkings is overstating and understating the amount wagers in different categories. In this case, it was overstating the betting handle on parlays and understating the amount of money wagers in other categories.
Everything began at the beginning of March of 2024. This is when the Office of Financial Investigations within the gaming enforcement division discovered discrepancies in DraftKings’ reporting of sports betting revenue to regulators in Illinois and Oregon. Thus, they were also suspicions that similar issues were occurring in New Jersey.
DraftKings told New Jersey regulators that an update to a newly created database contained a coding error. Thus, it resulted in the mis-categorization of certain bets. In a reply to the DGE, DraftKings said it did not give the matter an urgent attention. This is why they did not report the error. Especially since they did not think it would not affect taxable revenue. Thus, the error did not require their immediate attention or reporting.
Of course, the DGE was not happy with that response. Despite the mistakes having no impact on total revenue and the corresponding tax obligations, tithe information remains an essential element of the monthly tax filing.
DraftKings received a letter from DGE’s acting director Mary Jo Flaherty on 16 June. The letter said, “These types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system.” Furthermore, Flaherty, not mincing words, described DraftKings’ conduct as “unacceptable”.
On Monday, DraftKings said the coding errors has been fixed. Furthermore, they said that they have discussed the importance of the error internally. Thus, they will be training their staff and creating additional monitoring safeguards.
DraftKings’ Inaccurate Sports Betting Data will have Tax Implications
As per the New Jersey gambling law, DraftKings must have a land-based partner. In this case, they are affiliated with Resorts Digital. However, due to inaccurate data from DraftKings, Resorts’ tax returns for December 2023, January 2024, and February 2024 were all inaccurate.
In a communication to iGB, a spokesperson for DraftKings said: ” We value our relationship with the DGE and are committed to ensuring compliance with all regulatory guidelines.” Furthermore, they said that “There was an error in the reporting of our wagering mix breakdown to the state that we have corrected by implementing additional controls.”
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