DraftKings was fined $150,000 by New Jersey gambling regulators. DraftKings allowed a Florida man, who was not physically present in New Jersey, to place online sports bets.
The New Jersey Division of Gambling Enforcement announced Wednesday that it had reached a settlement agreement with Boston-based DraftKings regarding the so-called proxy gambling incidents, which are prohibited under state regulations.
DraftKings agreed to take a number of corrective steps, including closing the account for proxy betting and voiding 21 of the bets that the Florida man made. It also closed his account for fraudulent gambling.
DraftKings stated in a Thursday statement to The Associated Press that they are constantly improving their systems to detect violations to our terms of usage. “In this case, our systems failed the detection of violation of our terms and use. We have taken corrective actions to rectify that.”
The company declined further comment and refused to make company representatives available for interviews.
This case concerns a Florida man known for his big-time gambling habits. In 2019, he opened an online DraftKings account and he was known for placing $50,000 in one game or event.
Except for their names, court documents didn’t release any identifying information about the man or his friend. The AP couldn’t locate them to request comment.
DraftKings discovered that the Florida man was accessing his account via a proxy user after it was signed in from Florida and then New Jersey. According to court documents, this was due to geolocation data. He was given a written warning by the company.
According to court documents, it verbally advised the Florida man and his friend that proxy betting could be done provided that the friend waited at most two hours after the Florida man last used the account to place a wager.
New Jersey authorities claim that the Florida man was also a guest at DraftKings’ Super Bowl in Miami in February 2020. He bet through his friend, in the presence and with the knowledge DraftKings personnel.
DraftKings also confirmed that DraftKings knew of the Florida man’s friend and use the same arrangement to place bets in Pennsylvania after DraftKings was approved by the state to offer online sports betting.
In October 2020, the company closed his account for proxy gambling.