COLUMBUS, Ohio—Ohio gambling regulators have slapped DraftKings with a $425,000 fine for inappropriately allowing residents to bet on individual college athletes’ game performances and permitting people to deposit money in their accounts by paying cash to local retailers.
The fine was part of a settlement with the Boston-based online sportsbook giant that was approved by the Ohio Casino Control Commission last week. A copy of the agreement was provided to The Plain Dealer/cleveland.com.
According to the settlement, DraftKings accepted player-specific “prop” bets between March 14 and March 19 of this year. Ohio banned such wagers starting March 1, on the grounds that they raise the likelihood of players cheating and being targeted by gamblers who lost money from their performances.
In addition, DraftKings also wrongly allowed customers to add money to their accounts by paying cash to local stores and other businesses, which would then use a third-party company to deposit (almost all) the funds with DraftKings.
Using this method, Ohioans made nearly 41,000 deposits totaling more than $2.5 million to DraftKings accounts between January 2023 and March 2024, the commission found.
Ohio administrative code, as written, only allows people to deposit money in a sports-betting account using cash if they go in-person to a state-approved kiosk or cashier, such as at JACK Cleveland casino.
DraftKings permitted deposits using local retailers as a way to allow people without bank accounts to bet money with the company, said Matt Schuler, executive director of the Ohio Casino Control Commission. However, such a method raises concerns about the potential for money laundering, Schuler said.
After the commission notified DraftKings of the violations in mid-June, the company changed its website to no longer accept college player-specific bets made in Ohio and refunded money to everyone in the state who lost money making such bets after March 1, according to the settlement.
DraftKings also stopped accepting deposits made via unapproved retailers, conducted a compliance review of all other deposit methods for Ohio bettors, and agreed to set up monthly reviews going forward, among other steps, the settlement stated.
“Part of the problem here was that (DraftKings’) internal communication systems and checks and balances were not set up properly to ensure that everybody involved in creating markets in Ohio was aware of all of the parameters,” Schuler said.
The $425,000 fine will be deposited in the state’s general revenue fund, according to a commission release.
DraftKings, in a statement provided by company spokesman Stephen Miraglia, said it is dedicated to upholding regulatory standards set by each state and area in which the company operates.
“We value the productive relationships we’ve built with regulators and remain committed to close collaboration moving forward,” the spokesman stated.
Jeremy Pelzer covers state politics and policy for Cleveland.com and The Plain Dealer.