The DGE released a report detailing its investigation into proxy betting violations that took place on multiple occasions throughout 2019 and 2020. The report also details how DraftKings created a process that allowed gamblers to circumvent proxy betting restrictions after first discovering the violations.
DraftKings Fined by New Jersey Regulator For Helping Customer Circumvent Proxy Betting RestrictionsAt the time DraftKings stated:
“We never authorized the customer in question to engage in proxy betting. Any claim by this customer that he received a verbal agreement from Johnny Avello to place out of state wagers on his New Jersey mobile account through a proxy is patently false.”
However, the investigation has found that the company and Avello first discovered the proxy violations when a geolocation check noted a login in Florida followed by a bet placed in NJ just a few minutes later. The company then knowingly allowed the bettor to place regular bets via proxy despite this being a clear breach of NJ gambling regulations.
According to the gambler, DraftKings contacted him to warn him of the violations, but instead of requesting that he stop, he was told that he could continue to make wager via proxy once there was at least a couple of hours between login times and the wager.
It was also discovered that DraftKings hosted the gambler in a suite at the Super Bowl in Florida where he was placing wagers on the game via proxy. This was done in the presence of DraftKings employees.
DraftKings Fined by New Jersey Regulator For Helping Customer Circumvent Proxy Betting Restrictions DraftKings Fined by New Jersey Regulator For Helping Customer Circumvent Proxy Betting RestrictionsThe company must also undertake to introduce ‘detailed training procedures’ to ensure that all employees understood the regulations surrounding proxy betting.
DraftKings also noted that the gambler’s account has been permanently closed.
View more gambling industry fines here.
