DraftKings gambling site agreed to pay $90,000 in penalties to Colorado for allowing bets on two unauthorized sporting events, including the Jake Paul vs. Mike Tyson boxing match last year.
DraftKings admitted that it accepted at least 100 bets over four days leading up to the fight, even after state betting regulators issued a warning to betting operators against taking wagers on the bout.
On the day of the fight, Nov. 15, the Colorado Division of Gaming informed DraftKings that the betting was unauthorized and DraftKings stopped accepting bets.
The bets were part of a “props pool” — that a certain number of things would happen in the match: the winner, total punches landed for each boxer, and whether either boxer would bleed during the fight.
The division noted in its stipulation with DraftKings that it sent an email months before the fight informing sportsbooks that the boxing match didn’t qualify as a sanctioned betting event under Colorado law.
“In the email, the division stated the Jake Paul v. Mike Tyson boxing match deviated from boxing rules because Jake Paul and Mike Tyson will wear fourteen-ounce, not eight- or ten-ounce gloves, and because each
round will be two minutes long, instead of three-minute rounds,” the division wrote in its complaint.
DraftKings has agreed to pay a $50,000 fine for accepting bets on an unauthorized event, failing to obtain approval for pool betting, and not reporting the violation immediately.
Colorado’s Limited Gaming Control Commission voted to approve the fine on Thursday. It was first reported by The Denver Post.
"We promptly addressed the issues in coordination with the commission and have taken steps to strengthen our processes,” reads a statement from DraftKings media relations department to CPR News. “We remain committed to upholding all regulatory standards in every jurisdiction where we operate.”
In a separate stipulation, approved on Thursday, DraftKings agreed to pay another $40,000 fine for allowing proposition bets on a college basketball player’s individual performance in a game during March Madness.
The sportsbook accepted 80 of what are called prop bets on University of Arizona guard Caleb Love’s performance, and alerted Colorado authorities the next day. Prop bets, which are wagers on an individual’s performance or other outcomes beyond wins and losses, are not allowed for college athletes under state law. Lawmakers prohibited them out of concern about the potential for younger players to be swayed to alter their performance.
NCAA leaders have also urged states to ban prop wagers for college players, in part due to the risk of harassment of student athletes from bettors on the losing end of a prop bet.
State regulators did not immediately respond to a request for comment, but the $90,000 in fines are believed to be the first against a Colorado sportsbook operator for unauthorized betting. DraftKings reported $1.4 billion in revenue in the first three months of this year.
A year ago, DraftKings was fined $100,000 by New Jersey betting regulators for reporting inaccurate data to the state on parlay bets. And then in December, New Jersey fined DraftKings another $20,000 for accepting bets on unauthorized Russian basketball matches in 2020-2021.
