DraftKings Hit With $10,000 New Jersey Fine for Self-Exclusion Failings

  • DraftKings violated state gambling law by promoting its services to self-excluded gamblers
  • The operator has received fines for similar offenses in various states in the past, including Iowa
  • The DGE has also recently warned online operators over incentivized withdrawal cancellations
  • New Jersey saw gaming revenue of $634.4m for the first two months of 2021, up 8% from 2019
DraftKings logo on phone screen
After a DGE investigation uncovered self-exclusion failings, DraftKings must pay a fine of $10,000 in New Jersey. [Image: Shutterstock.com]

The DGE ruling and response

DraftKings will pay a fine to the tune of $10,000 in New Jersey after an investigation uncovered self-exclusion failings.

sent “promotional mailings” to 11 self-excluded individuals

The New Jersey Division of Gaming Enforcement (DGE) announced its decision on Wednesday. According to the regulator, DraftKings sent “promotional mailings” to 11 self-excluded individuals, violating N.J.A.C. 13:69G-2.49(b)1 of the state’s sports betting regulations.

DraftKings SVP of regulatory operations Tim Dent released a company statement in response to the findings. He said: “Nothing is more important than providing a safe experience for our customers. We remain committed to operating an industry-leading approach to customer protections.”

Not the first time for DraftKings

DraftKings has received a number of fines for self-exclusion transgressions in New Jersey and other jurisdictions across the US.

In 2019, DraftKings paid a $2,000 fine for sending promotional emails to self-excluded customers in New Jersey. The sportsbook operator also received a $5,000 penalty for taking wagers from customers who had requested cooling off periods that same year.

During this investigation, the DGE found that 54 customers placed bets with DraftKings despite requesting a cooling off period. The operator said this resulted from a technical error but agreed to pay an additional fee of $3,277 to reimburse losses.

Outside of New Jersey, DraftKings forked out $5,000 for breaching self-exclusion rules in Iowa last year. Similarly, the Indiana Gaming Commission hit the sportsbook operator with a $3,000 fine only last month for advertising to 15 self-excluded players.

Common issues in New Jersey

DraftKing’s self-exclusion trangression is not an unusual one in the state. The DGE also fined GAN Plc this week for allowing self-excluded gamblers to wager. The company must pay a penalty of $2,000 and reimburse more than $20,000 in losses incurred by affected players.

operators were encouraging customers to cancel cash outs

This is not the only common regulatory violation in New Jersey. Earlier this year, the DGE published a warning to operators after an investigation into incentivized withdrawal cancellations. The regulator found that online operators were encouraging customers to reverse cash outs, sometimes offering bonus money as an incentive to do so.

In a Director’s Advisory Bulletin, the regulator reiterated the law in regards to withdrawals, reminding operators that current regulation prohibits “unnecessary” delays. The DGE warned of legal action if the activity continued.

A booming market

Despite regulatory transgressions, New Jersey’s gambling industry has cemented its status as one of the country’s most profitable gambling markets. The state has benefitted from a rise in sports betting and online casino revenue, helping counter the negative impact of the COVID-19 pandemic.

According to the most recent DGE financial update, New Jersey saw total gaming revenue of $634.4m in the first two months of 2021. That’s a rise of 8% from 2020 levels. Within that total,  internet gaming win rose by 80% year-on-year to $93.8m, while sports wagering revenue reached $128.6m, up 82%

The recent easing of COVID-19 limitations should also help boost New Jersey’s gaming revenue. Starting March 19, Gov. Phil Murphy permitted casinos to increase capacity from 35% to 50%.