FanDuel, one of the leading sports books in the United States, has been fined $2,000 and forced to pay out more than $230,000 in wagers after accepting bets on mixed martial arts fights that had already occurred a week earlier. The incident, which took place on April Fool’s Day in 2022, involved 34 bets on Professional Fighters League (PFL) fights that were promoted as live events but had taken place on March 25, 2022.

New Jersey gambling regulators issued the fine to FanDuel for this oversight, and the company has since agreed to pay it. However, FanDuel declined to comment on the penalty, according to the Associated Press. The New Jersey Division of Gaming Enforcement revealed in a letter on Monday that FanDuel was not notified by its data-feed providers that the PFL matches were pre-recorded. Consequently, FanDuel’s trading team manually created betting markets based on information directly obtained from the PFL.

“FanDuel confirmed that its traders failed to confirm with PFL that the event had previously occurred and was being presented via a tape delay,” New Jersey Deputy Attorney General Gina DeAnnuntis wrote in the letter. This lapse in verification led to 26 online wagers and eight retail bets totaling $190,904 placed on the events.

Detection and Payout

The error was detected when FanDuel received a notification from the International Betting Integrity Association, which monitors betting transactions for suspicious activity. The association alerted FanDuel that the events it offered odds on had already occurred. As a result, FanDuel paid out the wagers, amounting to $231,094.

The fine from New Jersey regulators was imposed on January 2 but was only made public recently. In addition to the financial penalty, the state mandated that FanDuel update its internal controls to prevent similar incidents in the future.

This was not the first instance of a sports book in New Jersey taking bets on events that had already occurred. In 2021, 86 gamblers placed bets on a British soccer game that had taken place the day before. The bets were voided, and the companies involved, Kambi Group and Rush Street Interactive, were fined $1,000 each. This incident involved a proposition bet on whether Manchester United’s Marcus Rashford would score a goal in a game against Liverpool, which he did.

More recently, New Jersey regulators fined DraftKings, another major sports book, $100,000 for reporting inaccurate sports betting data to the state. These incidents highlight the challenges and complexities of managing real-time sports betting operations and the importance of stringent data verification processes.

Ensuring Future Compliance

In light of these issues, FanDuel and other sportsbooks operating in New Jersey and elsewhere are likely to face increased scrutiny and regulatory oversight. Ensuring accurate and timely data feeds is critical to maintaining the integrity of sports betting markets. Companies must invest in robust internal controls and verification processes to prevent similar mistakes and uphold the trust of their customers and regulators.

The penalties and payouts associated with these errors serve as a reminder of the high stakes involved in the sports betting industry. As the market continues to grow and evolve, maintaining compliance with regulatory standards will remain a top priority for operators to safeguard their operations and reputations.