New Jersey gambling regulators hit DraftKings with a $100,000 fine for providing inaccurate sports betting data. The errors, attributed to a coding issue by DraftKings, resulted in incorrect tax filings by Resorts Digital, the online arm of Resorts Casino.
Misreported Wagers Caused Reporting Issues
The reported violation involved overstating parlay bets (multi-game wagers) and understating other types of bets. This led Resorts Digital to file incorrect sports betting tax returns for a three-month period (December 2023 – February 2024). The errors forced New Jersey to post corrected financial data, a rare occurrence not seen in over a decade.
DraftKings Admits Mistakes, Vows Improvement
DraftKings acknowledged the coding error and admitted to failing to promptly report the issue. The company initially believed the errors wouldn’t affect taxable income and downplayed the urgency. However, New Jersey regulators emphasized that the errors, although not impacting total tax revenue, still required adjustments to monthly tax filings.
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New Jersey Regulator Raises Concerns
The New Jersey Division of Gaming Enforcement expressed strong disapproval, calling DraftKings’ actions “intolerable” and incompatible with state regulations. Acting director Mary Jo Flaherty revealed that New Jersey had prior concerns about DraftKings’ reporting practices due to similar issues in Illinois and Oregon.
DraftKings Pledges Compliance
DraftKings accepted responsibility for the errors and assured regulators that the issue has been resolved. They committed to stricter adherence to New Jersey’s gambling regulations and implemented additional monitoring measures to prevent future occurrences.
A Reminder for Responsible Reporting
This incident serves as a reminder of the importance of accurate reporting in the gambling industry. DraftKings’ errors, while unintentional, caused unnecessary complications and raised concerns about their reporting practices. The hefty fine highlights the seriousness with which regulatory bodies view such issues.
