The House Doesn’t Always Win: An Accounting Of DraftKings’ 2024 Regulatory Fines

DraftKings keeps rolling the dice with various authorities, from state regulators to the SEC, and the online gambling operator is repeatedly crapping out.

Casino Reports counts four instances in this year alone in which DraftKings has been hit with fines by regulators, including a pair of six-figure wallops.

Here they are, in order from largest to smallest:

X’d out

Last week, the Securities and Exchange Commission hit DraftKings with a $200,000 fine over the company’s public relations team’s posts on the X (formerly Twitter) and LinkedIn accounts of founder and CEO Jason Robins (pictured above) on July 23.

The posts in question stated that DraftKings was experiencing “really strong growth” in states where it was operating.

The problem? According to the SEC, those posts violated Section 13(a) of the Exchange Act and Regulation FD. In short, the company was telling tales before information was disclosed to the entire public.

“Information about growth in sales as a public company can be extremely important to investors,” John Dugan, associate director for enforcement in the SEC’s Boston Regional Office, said in a press release. “It is essential that, when companies disseminate material, nonpublic information, they do so fairly to all investors.”

The numbers don’t add up

In June, DraftKings got slapped with a $100,000 fine in New Jersey after regulators there discovered the company reported inaccurate sports betting data for its Resorts Digital skin.

Parlay handle was mishandled in the reporting from December 2023 through March 2024. Errors were even found after the state’s Division of Gaming Enforcement wrote a letter to the company detailing the mistakes. The state further alleged that DraftKings was aware of the errors but did not contact the DGE at first, instead just correcting the mistakes.

“These types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system,” DGE Interim Director Mary Jo Flaherty wrote in a letter to DraftKings on June 16. “They evidenced weaknesses in DraftKings’ business abilities and casino experience and unacceptable conduct in dealing with regulations and requisite reporting and financial systems.”

All risk, no reward

What do you call a slot machine that doesn’t pay out? In Connecticut, they call it a $19,000 fine.

The slot in question is Deal or No Deal Banker’s Bonanza, and a user in the state told CT Insider that he spun the wheel 400 times without a single win on a slot with a published return-to-player (RTP) of roughly 95%.

As it turns out, an investigation by the Connecticut Department of Consumer Protection’s Gaming Division found 522 other players played the game, totaling over 20,000 spins, and not a single player won a dime.

DraftKings returned a little over $23,000 to the players, and the state fined the company the $19K (and hit the game’s manufacturer, White Hat, with a $3,500 fine).

And much like the issue in New Jersey, regulators allege DraftKings was aware of the issue and fixed it — but did not report it to the state’s regulators until after players filed complaints and the state reached out to the company.

Reign drain

The since-shuttered fantasy site Reignmakers — in which DraftKings would sell NFTs for use in daily fantasy-like contests — was not open to residents of Pennsylvania.

Theoretically.

Why theoretically? Because Pennsylvania residents were indeed able to access and play the game, which resulted in the Pennsylvania Gaming Control Board hitting DraftKings with a $10,000 fine back in March.

In August, DraftKings shut Reignmakers down due to an ongoing lawsuit that alleges the NFTs are unregulated securities. DraftKings pulled the plug after a district court judge refused to dismiss the case.