DraftKings has been hit with a $150,000 fine by the New Jersey Division of Gaming Enforcement after knowingly allowing proxy betting to take place during the 2020 Super Bowl.
As reported by Legal Sports Report, the sportsbook was aware that a VIP customer had placed a proxy bet and allegedly paved a way for the player to work around the rules after discovering that it took place.
Proxy betting pertains to the act of somebody placing a bet on behalf of somebody else with authorization and is banned under the New Jersey sports betting laws.
According to LSR, DraftKings first became embroiled in the proxy betting scandal in November 2020 when a customer in Florida claimed he had a verbal agreement with DraftKings sportsbook director Johnny Avello that allowed him to place a proxy bet with the sportsbook in the Garden state.
The operator sent a warning to the customer in 2019, only to then concede that he could continue if there was a two-hour delay between logging into the app and him placing the bet.
Despite denying that such an agreement was ever in place, an Attorney General report found that the operator had knowingly flouted proxy rules.
It claims that the Florida customer was unable to travel to New Jersey due to a knee injury however sent a proxy bet from his account, with his wagers going up to $50,000 per match.
Upon receiving the $150,000 penalty, DraftKings was demanded to implement new training procedures to its staff to better understand and detect proxy betting failures.