Renowned daily fantasy sports operator DraftKings has recently been slapped with a fine by gambling regulators in New Jersey for violating rules pertaining to the protection of people who have self-excluded from gambling activities. The state’s Division of Gaming Enforcement (DGE) has already published details of two regulatory actions taken against the fantasy sports company that has recently ventured into online sports betting and online casinos.
First, on June 6, the Division of Gaming Enforcement imposed the maximum $2,000 civil penalty against DraftKings after the company was found to have sent promotional emails and direct mailings to a number of individuals that had registered on the state’s gambling self-exclusion registry. As it turns, the gaming regulator informed DraftKings of that particular violation on April 12 and fortunately, the issue was settled quite smoothly with DraftKings agreeing to the penalty about three weeks later on May 1.
The second instance of a violation that was noted by the Division of Gaming Enforcement saw the regulator impose a civil penalty of $5,000 after which it asked the company to disgorge an additional $3,277.36 that it had reportedly won from customers who had gambled on the site despite having previously requested that their accounts be placed on a “cooling off” status – this would prevent them from accessing gaming services from the site for certain period of time.
A Software Glitch
As it turns out, the New Jersey gambling regulator became aware of the second issue when DraftKings reported a software flaw that was related to the “cooling off” status feature last November. As such, a number of gamblers who had requested that their wagering abilities be limited for a designated period of time found a loophole that allowed them to keep betting.
According to David Rebuck, the director of the Division of Gaming Enforcement, the failure of the “cooling off” feature was caused by a software update which had taken place in the previous month. At the time, there were a total of 54 sports bettor in the cool-off status and 13 of them were able to wager around $28,800 with the daily fantasy sports provider earning a total of $3,277.36 from that amount.
DraftKings, on discovering the glitch on their own, chose to self-report to the New Jersey Division of Gaming Enforcement, a move that has been touted as a great step in the right direction for the gambling industry. Despite the fact that the fines the company had to pay were relatively small compared to what they have earned in the past few months, it is great to see that it is leading the way with regards to ensuring consumer protection is a top priority in the gambling industry in New Jersey.
