The New Jersey Division of Gaming Enforcement has levied a $100,000 fine on DraftKings for providing inaccurate sports wagering data to the state in late 2023 and early 2024.
The erroneous data was reported to the state by Resorts Digital, LLC, the DraftKings license partner for New Jersey sports betting.
The fine is believed to be the largest given to an online sports betting operator in New Jersey since the state launched its market in 2018. The state delivered its decision in a four-page letter to DraftKings and its senior director of regulatory operations, Jacob List, in June.
Regulators claim DraftKings knew revenue data was incorrect
The letter, which came from the offices of the New Jersey Attorney General, the Department of Law and Public Safety, and the NJ Division of Gaming Enforcement, indicated that Resorts Digital turned in inaccurate Monthly Sports Wagering Tax Returns in December 2023 as well as in the following two months to begin 2024.
In addition, a March 2024 report also contained errors. Resorts Digital is required by law to submit the monthly revenue reports to the state, but relies on data supplied by DraftKings.
In each of the months cited in the disciplinary letter, DraftKings Sportsbook NJ reported inaccurate parlay total handle as it relates to overall total handle. As a result, sports betting data issued in statewide reports was not correct.
Most troubling to the state seems to be the fact that there is evidence that DraftKings knew their data was inaccurate as soon as mid-January but did not self-report the issue. DraftKings claims it did not report the errors because, in their opinion, the false report did not change its taxable revenue. The state of New Jersey disputes that understanding.
‘Gross errors and failures cannot be tolerated’
In March, confronted with the inaccurate reports, DraftKings assured the DGE it had processes in place to not make the mistake again.
However, when the March report was submitted by Resorts Digital in April, there were errors, and DraftKings issued new numbers to amend that report a week later. The state says as a result, DraftKings “failed to abide by a remediation step” it had agreed to previously. Specifically, that step was to correct any mistakes within 24 hours of learning them.
Citing state gaming statutes, the letter claims there was a “failure to exercise discretion and sound judgment to prevent incidents which might reflect on the reputation of the state of New Jersey and act as a detriment to the industry.”
“These types of gross errors and failures cannot be tolerated in the New Jersey regulated gaming system. They evidenced weaknesses in DraftKings’ business abilities and casino experience and unacceptable conduct in dealing with regulations and requisite reporting and financial systems.”
New Jersey regulations allow for a $20,000 fine for each instance of a violation of this sort. Seeing as DraftKings failed over the course of five months to provide accurate sports betting data, and also failed to follow a remedy it had agreed to, the DGE fined the sports betting operator for five violations.
DraftKings among top NJ sportsbooks since launch
The DGE began tracking sportsbook-specific revenue in January 2024, the second month that DraftKings began submitting erroneous reports. Since then, through May, DraftKings has totaled some $123.1 million in betting revenue, which is second only to FanDuel Sportsbook in the 21-operator industry. New Jersey officials do not break down handle by individual operators.
DraftKings has been present in New Jersey since the Garden State launched legal sports betting in 2018.
And since that time, the operator has been one of the go-to brands for NJ bettors.
Before 2024, the state did not break down revenue for individual brands. But it was accepted that DraftKings generated the vast majority of business for its land-based partner Resorts Atlantic City. Over the past six years, Resorts has totaled just over $968 million in overall revenue. Only Meadowlands Racetrack, with its partner in FanDuel, has performed better at over $2 billion.
