In a lawsuit made public on Wednesday, the New Jersey Division of Gambling Enforcement revealed that it had reached a settlement with Boston-based DraftKings regarding so-called proxy betting incidents that are prohibited under the regulations of the New Jersey. ‘State.
DraftKings also agreed to a series of corrective measures, including canceling 21 bets the Florida man had made that were still pending, closing his account for proxy betting and better training its employees to recognize and prevent such activity.
“We strive to continually improve our systems to detect violations of our Terms of Service,” DraftKings said in a statement to The Associated Press on Thursday. “In this instance, our systems failed to detect the violation of our Terms of Service. We have taken corrective action to address it.”
The company declined to comment further and would not make company officials available for interviews.
The case centers on a Florida man known as a great player. He created an online DraftKings account in 2019, and it was not uncommon for him to bet $50,000 on a single game or event.
Aside from their names, court documents revealed no identifying information about the man or his friend, including their hometown, and the AP could not locate them for comment.
DraftKings learned the Florida man’s account was accessed by a proxy user when logged in from Florida and then New Jersey within minutes, according to geolocation data cited in court documents. The company sent him a written warning.
But he also verbally informed the Florida man and the friend who was making the proxy bet for him that they could still do so provided the friend waited at least two hours after the Florida man had used the account for the last time in order to make a bet, according to court documents.
New Jersey authorities also said the Florida man was a guest of DraftKings at the Super Bowl in Miami in February 2020 from their corporate suite, during which he bet on the game through his friend in the presence and knowledge of DraftKings staff.
Regulators also said DraftKings was aware that the Florida man and his friend were using the same arrangement to place bets in Pennsylvania once that state approved DraftKings to offer online sports betting.
The company suspended his account in October 2020 for proxy gambling.
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