DraftKings to pay $150,000 penalty for violating proxy betting rules
| By Daniel O'Boyle
DraftKings has agreed to pay a $150,000 (£113,000/€136,000) civil penalty for violating proxy betting rules in New Jersey.
The payment comes after the New Jersey Division of Gaming Enforcement filed a complaint to the state attorney-general’s office regarding proxy wagering by a DraftKings customer.
Media reports in 2020 alleged that a DraftKings customer based in Florida had an agreement with DraftKings sportsbook director Johnny Avello that allowed him to use a proxy that would place bets for him in New Jersey.
At the time, DraftKings denied these media reports.
However, the attorney-general determined that the operator did violate the rules regarding proxy betting. As a result, DraftKings agreed a settlement with the Division of Gaming Enforcement, that includes a $150,000 penalty payment.
In addition to the payment, the settlement stipulates that DraftKings will undertake “corrective actions” to ensure it does not allow similar events to occur again.
Last month, DraftKings published its financial results, revealing that it made a net loss of $1.52bn (£1.12bn/€1.34bn) for its 2021 financial year despite revenue more than doubling year-on-year.
Revenue for the 12 months to 31 December 2021 amounted to $1.30bn, up 110.9% from $614.5m in the previous financial year, but costs – mostly related to marketing – grew more rapidly.