NJ DGE slaps DraftKings with $100,000 fine, stern words

In a letter sent to DraftKings on 16 June, DGE’s 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 the company for the offence, wrote the AP.

Every month, each of New Jersey’s 16 licensed mobile sportsbooks has to report its financials in a number of categories. Included are handle (amount wagered) and revenue, broken down by sport, with multi-leg parlay bets separated out. According to the DGE, the Boston-based company over-reported the amount wagered on parlays and under-reported in other categories.

The company has consistently been one of the top two sportsbooks in New Jersey by handle and revenue (along with FanDuel) since online sports betting launched in August 2018. Fanatics Sportsbook briefly overtook DraftKings early in 2024. The spike, it is believed, happened after some VIP customers took their business from DraftKings to Fanatics.

Tax implications of DraftKings’ bad data

All NJ online operators must be tethered to a land-based partner and DraftKings falls under the Resorts Digital umbrella. Because of DraftKings’ erroneous data, tax returns that Resorts filed last December 2023, January 2024 and February 2024 were all incorrect.

In a statement issued to iGB, a DraftKings spokesperson responded: “We value our relationship with the DGE and are committed to ensuring compliance with all regulatory guidelines. 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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