FanDuel was recently issued fines totaling $140,000 by gaming regulators in Iowa and Massachusetts.
The Iowa State Racing and Gaming Commission ($125,000) and the Massachusetts Gaming Commission ($15,000) fined the company for allowing bets in unapproved markets.
Key Takeaways
- FanDuel thought the LPGA was included in the list of approved betting events.
- Iowa regulators reported five infractions in a short time frame.
- A spokesperson said FanDuel already took steps to remedy the issues.
The Investigations and Enforcement Bureau (IEB) in Massachusetts on Tuesday invoked a $15,000 civil administrative penalty against FanDuel for offenses ranging from March 2023 to June 2024.
According to IEB enforcement counsel Diandra Franks, FanDuel accepted 7,155 illegal bets worth $78,254.46 on the LPGA. FanDuel, the national leader in online sports betting, reportedly thought the LPGA was included in the International Federation of PGA Tours, which was approved in the state betting catalogue in 2023.
However, the commission didn’t approve LPGA betting until June 6, 2024.
“That distinction created confusion for some operators, including FanDuel,” said Massachusetts Gaming Commission Chair Jordan Maynard during a Tuesday meeting. “FanDuel was responsive and communicative throughout this process and is in agreement with the IE’s recommendation.”
BetMGM was also caught in the confusion related to LPGA betting and received a $10,000 fine for improperly accepting wagers. It received a lower penalty since its volume was significantly lower, having only taken 1,934 wagers worth $1,642.46.
Iowa issues $125,000 fine
FanDuel faced a steeper penalty in Iowa, where company spokesperson Ben Roth said on Radio Iowa that it was accused of illegally allowing bets on a range of sports.
Of those, golf proved to be the most significant. FanDuel improperly took $89,000 in golf bets, as well as $62,000 related to Olympic events. Infractions were also reported in soccer and Super Bowl markets.
“We take responsibility for the matters represented in the settlement before the Commission today and understand that we did not meet the high standard that we hold for ourselves,” Roth said during a meeting with regulators on July 11.
Roth also stated that FanDuel had already addressed the situation internally with enhanced training, checklists, and automated reviews. Additionally, FanDuel refunded losing customers and the revenue it generated from illegal wagers.
The illegal bets weren’t the only infraction committed by FanDuel. The company was charged with five violations, including a failure to uphold its gaming policy, all of which were recorded during a narrow window.
“Five counts within a very short period of time is just too much,” commission chair Daryl Olsen said. “We expect more.”
An ever-changing landscape
FanDuel is the nation’s leader in sports betting, holding what its parent company, Flutter Entertainment, said last week was a 43 percent market share.
On top of facing punishment from the state regulators, it is also at war with Illinois officials. The company was the first to implement a $.50 per-bet charge as a direct response to the state’s $.50 per-bet tax. DraftKings and Fanatics quickly also added the charge, though Fanatics made its $.25 due to its lower volume.
Elsewhere around the country, FanDuel reportedly held talks with prediction platform Kalshi. Prediction markets have emerged as a potentially viable way to wager on sports without needing state regulation, though that could soon change with legal battles in progress and more expected.
