DraftKings avoids bigger fine following “gross” sports betting data errors

DraftKings has agreed to pay a $100,000 fine to the New Jersey Division of Gaming Enforcement (DGE) after multiple reporting errors in its sports betting data led to inaccurate tax filings.

From December 2023 through February 2024, DraftKings was caught in a data mishap that caused its land-based partner, Resorts Digital, to submit incorrect sports betting tax returns to the state.

The issues arose from:

• Overstating amounts wagered on multi-tiered bets (parlays).

• Misreporting data in other betting categories.

• Failing to maintain accurate monthly reports across all betting types.

The DGE’s acting director, Mary Jo Flaherty, sharply criticized DraftKings’ conduct, writing:

“They evidenced weaknesses in DraftKings’ business abilities and casino experience and unacceptable conduct in dealing with regulations and requisite reporting and financial systems.”

She added that such failures “cannot be tolerated in the New Jersey gaming regulatory system.”

Key regulatory responses included:

• Consideration of larger fines under the New Jersey Casino Control Act.

• Acceptance of DraftKings’ $100,000 settlement offer instead of pursuing the maximum penalty.

• Reinforcement of compliance monitoring for future reporting periods.

The incident marks the first major reporting lapse in New Jersey’s post-PASPA era, where DraftKings has typically been among the state’s top performers.

Following the controversy, DraftKings has submitted a remediation plan to the DGE, outlining:

• Stronger internal controls.

• Enhanced data verification systems.

• Ongoing compliance training for its reporting teams.

While the company has taken corrective measures, DraftKings remains under heightened scrutiny, signaling New Jersey’s firm stance on regulatory accuracy in the growing sports betting market.