close
close

New Jersey fines DraftKings $100,000 for reporting inaccurate sports betting data to the state

By WAYNE PARRY – Associated Press

ATLANTIC CITY, NJ (AP) — In one of the sharpest rebukes they have ever issued, New Jersey gambling regulators have fined DraftKings $100,000 for reporting inaccurate sports betting data to the state, a move the regulator called “unacceptable conduct” that showed weaknesses in the company’s ability to do business.

The errors required regulators to release corrected financial data for several months, something that had not happened in 13 years.

The errors included placing too high stakes on multi-level bets (parlays) and placing too low stakes on other betting categories.

“These types of gross errors and omissions cannot be tolerated by New Jersey’s gaming regulatory system,” Mary Jo Flaherty, deputy director of the state’s Division of Gaming Oversight, wrote in a letter to DraftKings on June 16. The letter was released on Friday.

People also read…

The inaccurate data resulted in Resorts Digital, the online arm of Resorts Casino, filing false sports betting tax returns for December 2023 and January and February 2024.

The documents had to be corrected and republished weeks later. Resorts declined to comment.

In early March, the Division of Gaming Regulation’s Office of Financial Investigations became aware of problems with the way DraftKings reported sports betting revenue to regulators in Illinois and Oregon and suspected the same problems were occurring in New Jersey, Flaherty wrote.

DraftKings announced on Monday that the problem had been resolved.

“We value our relationship with DGE and are committed to ensuring compliance with all regulatory guidelines,” the company said in a statement. “An error occurred in reporting our bet mix breakdown to the state, which we have corrected by implementing additional controls.”

The company told New Jersey regulators that an update to a newly created database contained a coding error that led to the incorrect categorization of certain bets, the state said.

In a March 29 letter to the state, DraftKings said it did not give the matter urgent attention and did not report it in a timely manner because it believed the errors had no impact on taxable income and did not require immediate attention and reporting, the state said.

The department rejected that response, arguing that the data was “a critical part of the monthly tax return,” even though the errors had no impact on gross income and the taxes due on it.

DraftKings told the state that it had, among other things, corrected the coding error, discussed the significance of the error internally, trained employees and implemented additional monitoring measures.

Follow Wayne Parry on X at Twitter

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.