They’re calling it one the most strongly worded admonishments ever written by New Jersey gambling regulators.
The Garden State’s Division of Gaming Enforcement has slapped DraftKings with a hefty $100,000 fine for what they termed “unacceptable conduct.” This penalty comes in response to the company’s submission of inaccurate sports betting data, revealing significant flaws in its operational capabilities.
These discrepancies forced regulators to issue revised financial reports over several months, an unprecedented move in over a decade.
The errors were not minor: DraftKings overstated the amount wagered on multi-tiered bets, known as parlays, while understating other wager categories, leading to a significant misrepresentation of betting activities.
The incident has cast a spotlight on the reliability and accuracy of data reporting by major sportsbooks, raising questions about the industry’s regulatory oversight.
DraftKings Chastised by NJ Division of Gaming
“These types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system,” wrote Mary Jo Flaherty, the acting director of the state Division of Gaming Enforcement, in a letter to DraftKings. “They evidenced weaknesses in DraftKings’ business abilities and casino experience and unacceptable conduct in dealing with regulations and requisite reporting and financial systems,” she said.
Flaherty revealed that the enforcement agency first caught wind of the issue in early March, prompted by findings from the gaming enforcement division’s Office of Financial Investigations. Initially identified in DraftKings’ revenue reports for Illinois and Oregon, similar discrepancies were suspected to be occurring in New Jersey.
DraftKings Blames Coding Error
DraftKings informed the state that the errors occurred due to a coding issue in a database, which has since been rectified.
“We prioritize our partnership with the DGE and remain dedicated to adhering to all regulatory standards. The inaccurate reporting of our wagering breakdown to the state was a result of this issue, which we have addressed by implementing enhanced controls,” the company stated in a statement obtained by The Associated Press.
DraftKings reported its financial results for Q1 2024, revealing revenue of $1.18 billion, a 53% increase compared to the previous year. The company also reported an operating loss of $138.8 million, which is an improvement from a loss of $389.8 million last year, but it marks another quarter without profitability.
In March, New Jersey’s results showed PointsBet surpassing DraftKings to take second place behind FanDuel.
Bettors May Soon Add In-State Colleges to Eligible Wagers
Despite this challenge, DraftKings continues to hold a formidable position in New Jersey’s online sports betting arena, consistently securing a top-two spot alongside FanDuel ever since the state embraced online sports betting in 2018.
As DraftKings navigates these developments, New Jersey lawmakers are deliberating a potential game-changer: allowing bets on in-state college teams. Assemblyman Michael Venezia has put forward Constitutional Amendment ACR140, which, if passed through the legislature and approved in a November 2025 ballot referendum, could pave the way for wagering on local college teams as early as 2026.
We’ll keep you posted.
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