The gambling regulators of New Jersey have imposed a fine of $150,000 on DraftKings for allowing a player who resides outside the state to make a bet on the NJ platform. This anomaly was facilitated by a contact of the players living in New Jersey. The friend logged into the account of the player who was in Florida at the time and then went ahead to place a bet on his behalf.
By virtue of the fact that proxy betting is prohibited under the NJ state gambling regulations, the New Jersey Division of Gambling Enforcement reached the conclusion that DraftKings was in deed in violation. In response to the action which was made a few days ago, DraftKings accepted their failure and arrived at a settlement with the regulator.
In the interest of avoiding future incidents of the same nature, the DraftKings casino team agreed to impose a set of corrective measures on its operations. It was immediately decided that the bets made by the Florida man would be voided on the system. After that his account would be closed on grounds of violation of a clear directive of the regulators. The last action in mitigation of future reoccurrence was the thorough training of DraftKings employments on techniques of identifying prohibited activity on their platform.
According to a statement that was released by DraftKings to the Associated Press, the company was committed to improving its systems. The management strives to continuously improve their deliver to its customers. In ensuring that they uphold their mission in a manner that does not violate the law, their strategy will be focused on detecting noncompliance to terms of use.
Since proxy betting has been prohibited on the terms of use, DraftKings must have tailored its system to not only detect but also to flag violations. In the current situation for which they have been penalized, the system was unable to do so leading to loss of a huge sum of money. Hopefully, the measures which have been proposed will be implemented to prevent players from taking advantage of the loophole.
Even though the company appears to have the situation under control, no representative has offered to come forward for a comment. It is not clear which department the blame of the lapse falls on but there is definitely going to be some internal brainstorming on the matter.
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What we cover
The Details Of the Proxy Bet
For the Florida man who is at the center of the DraftKings proxy betting violation, it must have been business as usual. Those who know him attest to the fact that he is a big-time gambler who does not shy away from placing huge bets. His DraftKings account was created in 2019 and since then had been active with extravagant bets.
By having a third party log into his account to make a bet, the Florida gambler allowed unauthorized access of DraftKings resources. Even if the New Jersey Division of Gambling Enforcement had not identified the malpractice, the gambler from Florida and his friend would still be guilty of impersonation and conspiracy to defraud.
At the time of writing this article, the details of the two civilians involved in the impersonation claim had not been revealed. The court documents do not bear any personal identification information and this means that the public and media will be unable to trace them for comments.
How Was the Anomaly Detected?
The irregular login activity on the man’s account is what drew Drafting’s attention to the fact that a proxy user had accessed an account that belonged to someone else. Being that it was highly improbable that someone would be in Florida and then in New Jersey within a couple of minutes, an investigation was immediately launched. Geolocation data revealed that the account was indeed accessed from two different locations within a short span of time. It was practically impossible for someone to have traveled to the next location.
According to the documents filed in court on the case, the management of DraftKings issued a written warning to the account holder for the violation of terms. In the warning, the betting operator informed the Florida man that what he had done was not illegal. If he could have asked his friend to wait for 2 hours after he had placed his bet before placing another, no eyebrows would have been raised.
Interestingly, this is not the first incident of proxy betting that the Florida man was involved in. New Jersey betting authorities have on record a scenario which took place in 2020 at the Super Bowl in Miami. While seated at the Drafting’s company suite, he used a friend to place a bet for him within the full glare of the company’s betting personnel. In yet another incident, DraftKings was accused of supporting proxy betting when the Florida man did the same thing in Pennsylvania.
After the 2020 incident however, DraftKings is on record for having suspended that gaming account. Obviously, the casino brand had made a visible effort to discourage the Florida man from proxy betting but they were not serious about it. Perhaps it is because he was a high roller gambler and they were not ready to lose his business. Either way, laxity to deal conclusively with this case has led to an even greater loss for the company.
Conclusion
It is true what DraftKings said, “Proxy betting is alright if the time difference between bets makes logistical sense.” The fact that the gambling operator noticed the violation but still did nothing speaks volumes of the extent of desperation to make money. This fine is definitely hefty and will serve as a lesson to the brand and any other business that is going to willingly turn a blind eye to rules of trade being broken. After this, the public is bound to experience many players being banned from gambling and accounts being permanently closed for irregularities.
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$1025
Welcome Package
$25 free bonus + deposit match, first deposit up to $500.
$600
Welcome Package
* New customers only. 100% match bonus based
on first deposit of up yo $600.
$500
Welcome Package
* New customers only. 100% match bonus based
on first deposit of up to $500.
