DraftKings fined in Ohio for betting regulation violations

Júlia Moura November 21, 2024

SiGMA news

DraftKings, one of the leading sports betting operators in the U.S., has been fined again, this time in Ohio. On November 20, 2024, the Ohio Casino Control Commission (OCCC) imposed a $425,000 penalty for violating local sports betting regulations, including accepting prohibited bets and using unauthorized deposit methods.

The first violation occurred between March 14 and 19, 2024, when DraftKings accepted proposition bets on individual performances of collegiate athletes. Such wagers had been banned in Ohio earlier that month as part of measures to protect sports integrity and mitigate risks tied to amateur events.

The second violation involved cash deposits at unauthorized locations. Approximately 41,000 transactions, totaling over $2.5 million, were processed using unapproved methods from January 2023, when Ohio’s betting market launched, until March 2024. The OCCC stated that DraftKings was aware of the rules but continued to operate outside them until notified.

After these violations were identified, the company disabled collegiate betting markets, voided non-winning wagers, and revised its deposit methods to comply with state regulations.

History of penalties

This is not DraftKings’ first issue in Ohio. In February 2023, the company was fined $500,000 for improper advertising practices, including sending promotional materials to minors and using misleading terms like “risk-free” in offers. These actions violated responsible advertising standards and raised regulatory concerns in the state.

Combined, the $500,000 and $425,000 fines are the largest imposed on a sports betting operator in Ohio since the state legalized betting in 2023.

Official statements

Thomas J. Stickrath, OCCC Chairman, emphasized the commission’s commitment to consumer protection and regulatory integrity, stating, “The commission will not hesitate to take administrative action to enforce compliance and safeguard Ohio’s citizens.”

Beyond Ohio, DraftKings is also under investigation in Massachusetts. The company allowed players to use credit cards to fund accounts in other states and then transfer the funds for bets in Massachusetts, where credit card funding is prohibited. Although the issue was self-reported, persistent system failures resulted in multiple corrections between 2023 and 2024, drawing further regulatory scrutiny.

These incidents highlight the challenges faced by operators in adhering to expanding regulatory frameworks while maintaining public trust in a rapidly growing industry.

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