DraftKings Reaches $150K Settlement in New Jersey Over Proxy Betting Case

According to press reports, DraftKings reportedly agreed to a $150,000 settlement with the New Jersey Division of Gaming Enforcement in a case involving proxy betting that occurred in 2019 and/or 2020.

According to the Associated Press, the case involves a Florida man who was purported to be a large gambler. DraftKings Sportsbook eventually closed his account in connection with at least one wager made in New Jersey.

At the time, the situation got the attention of the DGE, which launched an investigation.

What Is Proxy Betting?

Proxy betting—meaning having a person who is not the actual account holder of a sports betting account make wagers on behalf of the real account holder—is a violation of New Jersey regulations. In the DraftKings case involving the Florida man, another person allegedly made a bet or bets from New Jersey.

Apparently, the violation was realized when the actual account holder accessed an account while signing in from Florida. Then there was contact very quickly with DraftKings allegedly representing the same party, except this time from a New Jersey location.

After reaching the settlement with the New Jersey DGE, DraftKings made the following statement to the Associated Press: “We strive to continuously improve our systems to detect violations of our terms of use. In this instance, our systems failed to detect the violation of our terms of use. We have taken corrective action to address that.”

DraftKings reportedly also agreed to other corrective actions, including better employee training to detect such illegal activity.