On April 12, 2019, the Director of the New Jersey Division of Gaming Enforcement (DGE) handed down a $10,000 fine to PokerStars for accepting sports bets on prohibited contests. This is the largest-ever fine issued by the Division for an infraction related to sports betting.
The incidents in question involve PokerStars' betting division, called BetStarsNJ. Though The Stars Group is mainly known as poker company, it does offer casino gaming through the PokerStars Casino as well as wagering on the outcomes of sporting matches via BetStars. It provides all three types of betting action to its internet customers in The Garden State: NJ online poker, casino games, and sports betting.
On Nov. 19, 2018, BetStars allowed punters to book 216 separate wagers on the college basketball game of Eastern Michigan University Eagles versus Rutgers University Scarlet Knights – something that's disallowed under New Jersey law. From the relevant sports wagering law on the website of the State of New Jersey:
"prohibited sports event" means any collegiate sport or athletic event that takes place in New Jersey or a sport or athletic event in which any New Jersey college team participates regardless of where the event takes place.
Rutgers University has campuses in New Brunswick, Newark, and Camden: all located in New Jersey. Therefore, accepting bets on its games is disallowed under New Jersey law. Nevertheless, BetStars had the game listed in its sportsbook, and customers were able to wager a total of $2,756.89 on the game.
On Dec. 31, PokerStars again permitted bets on a collegiate game involving a New Jersey team, this time the Monmouth University Hawks (housed in West Long Branch, NJ) versus the University of Pennsylvania Quakers. For this second event, only a single wager was placed although we don't know how large it was.
As noted by DGE Director David L. Rebuck in the enforcement order, “PokerStars voided all wagers and refunded the patrons prior to the beginning of the stated events.” This proved insufficient for the firm to avoid the $10K civil penalty.
Perhaps part of the reason for not letting 'Stars' mistakes slide with a simple warning was the fact that the DGE had sent an email on Nov. 5, 2018 – right before the start of the 2018-2019 college basketball season – reminding its licensees of the rules about betting on college athletic events.
Writing about the enforcement action in an email sent to the Press of Atlantic City, Matt Primeaux, Senior VP for Strategy & Operations, USA at The Stars Group, remarked:
We generally don’t comment on regulatory matters like these, but we had a manual gating error from our international games into New Jersey. We cooperated with the DGE as we always do, have learnt from the problem, and are confident it won’t reoccur. We’re glad to have had a successful NCAA basketball season…
While this explanation is a bit vague, it seems that lines shown to the international clientele of PokerStars were inadvertently carried over to the New Jersey subsidiary of the organization. This ought to be a simple technical fix for the online gaming giant, perhaps involving the automatic flagging of all contests in which the name of an NJ college appears.
The decision of the authorities to prohibit betting on matches involving NJ college teams has proven controversial. Some, like former State Senator Ray Lesniak, are against such a ban. He was instrumental in getting sports betting legislation passed in the state, and he has stated that he compromised on this point in order to ensure that the bill would have a greater chance of passage. Addressing the reasons why people should be allowed to bet on New Jersey college sports, Lesniak said:
Having betting out in the open where it can be monitored and seen is a lot more effective in discovering unusual betting patterns and thereby preserving the integrity of the game.
Others point to the fact that wagering on such games is definitely possible at any number of USA-friendly offshore sportsbooks, so the state's tough stance on the matter really has little effect in practice. It merely drives gamblers away from the NJ-licensed markets and into the arms of entities located in other jurisdictions.
Nevertheless, there are those who believe that the prevention of wagers on NJ college sports at state-approved bookies is appropriate. There are even calls to make harsh penalties mandatory whenever a licensed sportsbook makes an error in this area. State Assemblyman Ralph Caputo has introduced HB 4947, which would levy fines of between $20,000 and $100,000 for entities that accept wagers on prohibited sporting events. Furthermore, they could see their licenses suspended for up to 10 days.
For reasons that have yet to be definitively determined, sports betting enterprises that are new to the New Jersey market have encountered unexpected hurdles. On Aug. 7, 2018, just a few days after opening for business in the state, the DraftKings NJ sportsbook was subjected to distributed denial of service attacks that interfered with its business. About a month later, longtime daily fantasy sports rival and aspiring New Jersey bookmaker FanDuel made a pricing error in its lines that resulted in the company having to pay out an extra $82,500 to customers.
Two previous fines were levied by the DGE against sports betting firms that broke the rules about collegiate matches. The Golden Nugget allowed patrons to bet on several football games involving New Jersey college teams in September 2018, and it had to pay back $390 that its customers had wagered. Also in September, Caesars Atlantic City was caught accepting wagers for a game played by the Rutgers Scarlet Knights and had to pay a civil penalty of $2,000.
We've seen quite a few gaming houses in New Jersey hit with punishments for very trivial infractions. On top of this, they cannot publish odds on certain types of contests, and their overall selection of sports covered is pretty small.
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