Why The GAN Fine By New Jersey DGE For Geolocation Violations Is A Good Thing

Posted By Steve Ruddock on June 23, 2016 - Last Updated on April 8, 2020

[toc]The New Jersey online gambling industry had a near unblemished record when it came to consumer protections, particularly on the geolocation front. That is, not a single instance of an out of state player gaining access to a licensed online gaming site had been recorded in the history of online gambling in the Garden State.

That streak came to an end recently, when the New Jersey Division of Gaming Enforcement fined GAN $25,000 for allowing six out of state players access to Betfair Casino.

While not an operator, GAN supplies multiple online gaming operators, including BetfairCasino.com, with products and software used in online gambling.

According to the DGE, the scope of the error was limited, and resulted in only $350 in wagers being placed by out of state players.

The DGE said the violation occurred because of an “unintentional activation” of mobile software that hadn’t gone through the necessary testing. The glitch has since been corrected, properly tested, and reintroduced to the market without incident.

This was the largest fine handed down to an online gaming company in the two-and-a-half year history of the industry, and by far the most egregious (there have only been three other fines to my knowledge) of the violations committed by online gaming companies.

Silver lining

These geolocation violations are unfortunate, and will certainly be used to advance the arguments of online gaming opponents, but the reality of the situation is quite the opposite. The $25,000 fine the DGE imposed on GAN is good for regulated online gaming, and should make people more at ease with the idea of legal, regulated online gambling.

Here’s why.

One of the arguments that has been tossed around by those that oppose online gambling goes something like this: The reason there haven’t been any recorded instances of underage gambling or geolocation failures is because they are undetectable and unable to be policed. Quite simply, they have argued that the technology to police online gambling doesn’t exist.

At an online gaming hearing, Sands representative Andy Abboud phrased it thusly:

“Don’t be fooled by the technology companies that come before this committee today or in the future promising Internet technology that will be able to prevent kids from getting online to gamble – because it is nearly impossible to prevent minors from gambling online.”

At another hearing, Abboud tried to argue that the lack of evidence (that is, no instances of underage gambling or geolocation failures) is proof that it’s taking place.

The DGE’s investigation and subsequent fine prove otherwise. The technology is in place to ferret out potential violations.

The notion that a complete absence of evidence demonstrates the DGE (or other regulatory bodies) cannot catch violators has just been debunked.

Not the first online gaming fines

As noted above, online gaming operators in New Jersey have been sparsely fined.

The DGE has previously fined online operators for marketing to players on the self-exclusion list:

  • In November of 2014 Caesars Interactive was hit with a $10,000 fine for sending marketing material to people on the self-exclusion list.
  • In June of 2015 Caesars Interactive was once again hit with a fine, this time for $15,000, for the same offense.

The only other online related fine (again, to my knowledge) was handed down to bwin.party when the company failed to make good on one of its stipulations for licensure in the allotted period of time.

When the company was first approved by the DGE in 2013, one of the conditions imposed on bwin.party was that previous owners Ruth Parasol and Russell DeLeon had to completely divest their shares in the company within two years. The pair only partially divested by the deadline, and bwin.party was slapped with a $10,000 fine.

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Steve Ruddock

Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus is the developing legal and legislative picture for regulated US online poker and gambling.

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