Citing “human error” as the reason that two wagering markets prohibited in Colorado were listed for betting, DraftKings Thursday was fined a total of $90,000 for two violations during the Limited Gaming Control Commission (LGCC) meeting.
The operator allowed a college player proposition bet on then Arizona college basketball player Caleb Love for a March 23, 2025 game, and for taking wagers on the Nov. 15, 2024 Jake Paul-Mike Tyson boxing match. College-player proposition bets and the Paul-Tyson boxing match were prohibited wagering markets in Colorado.
The fines weren’t the biggest handed out this week — Iowa’s regulator fined FanDuel $125,000 for five violations and Massachusetts’ regulator fined FanDuel $15,000 for taking bets on an illegal market.
In Colorado, DraftKings self-reported the Love proposition bet the day after it was listed and filed an incident report with the LGCC April 7. DraftKings Director of Regulatory Operations Jake List said during the meeting that the market was included in the “team prop bets hierarchy” and slipped through a manual review of available bets.
Team college prop bets are legal in Colorado, but individual player props are not. List said that at the time of the incident, there was single manual check on betting markets, but that the company has instituted a second “supervisory check,” instituted an alert system, and must conduct “enhance[d] ongoing training for all Live Traders focused on regulatory risk awareness and proper market set up procedures.” The goal is to automate the system to avoid future issues.
DraftKings accepted 80 bets on the market, but the LGCC did not reveal the total handle for the market.
The LGCC fined DraftKings $40,000 for the incident, and commissioners questioned the fine, suggesting it should be higher. But staff said that because it was so quickly reported, they felt the fine was appropriate. The commission ultimately agreed, but said that should the issue arise again, they would want to see a higher penalty.
Paul-Tyson fight betting wasn’t legal
With regard to the Paul-Tyson fight, the LGCC on Nov. 28, 2023 sent a “bulletin” to sportsbooks regarding approval of boxing matches, though it did not specifically point to the Paul-Tyson fight, which had not yet been signed at the time. The agency sent a follow up email to operators on May 20, 2024 indicating that the “Director has rejected the Jake Paul v Mike Tyson boxing match on July 20, 2024.”
The fight, which was later moved from July to Nov. 15, 2024, had different rules than a standard professional boxing match, including shorter rounds and heavier gloves. It was because of those parameters that the LGCC disallowed betting on the fight.
But DraftKings offered a “props pool” on the fight and took at least 100 bets on it between Nov. 12-15, when it removed the offering and refunded bettors’ money. The LGCC’s sports wagering division alerted DraftKings to the violation Nov. 15, and the operator filed a report with the agency Nov. 27. According to a report from the Division of Gaming, DraftKings not only offered an illegal market, but violated a second regulation by not reporting the violation until 12 days later. The commission fined DraftKings $50,000.
List explained that the fight pool was a “different wagering product that runs on a different wagering platform,” and a manual check failed to reveal the illegal market in the group of pools being offered. “The person who did it, didn’t do it correctly,” List said of the check. DraftKings has since instituted a supervisory check and is working to automate the process, which List said would be more effective.
Iowa fines FanDuel for RG violations
It’s been a big week for legal operator fines across the country. The Iowa Racing and Gaming Commission fined FanDuel $125,000 for accepting illegal bets according to the state’s regulations and for lack of responsible gaming options — five incidents total, Radio Iowa reported Monday. FanDuel is the second-biggest operator in Iowa, but state commissioners are concerned with the high number of violations within a short period of time.
State commissioner Daryle Olsen expressed the need to hold online operators like FanDuel to the same standards as any local casino. FanDuel responded by refunding the money to bettors where possible and implementing increased training, more detailed checklists and runbooks for the deployment of content, and increased automation.
And on Tuesday, FanDuel was also fined $15,000 for taking bets on the LPGA before that market was legal in Massachusetts.
Ella Gorodetzky contributed to this report
