DraftKings Fined By Ontario Regulator for Alleged Violations

DraftKings Ontario allegedly ran afoul of the same rule that tripped up BetMGM Ontario and PointsBet Ontario in early May.
a man in a grey suit holds up a red penalty card. DraftKings Fined By Ontario Regulator for Alleged Violations. DraftKings Ontario allegedly ran afoul of the same rule that tripped up BetMGM Ontario and PointsBet Ontario in early May.
By
June 30, 2022

We are committed to complying with all applicable regulations in every jurisdiction in which we operateRegulators in Ontario fined DraftKings on Thursday for violating the province’s restrictive rules governing advertising and inducements.

In a statement, the Alcohol and Gaming Commission of Ontario (AGCO) alleged that DraftKings — which just entered Ontario’s regulated market for online poker, casino gaming, and sports betting on May 18 — had run afoul of its Standards for Internet Gaming.

Specifically, the AGCO alleged that DraftKings had violated Standard 2.05, which prohibits most advertising and marketing materials that include details on gambling inducements, bonuses, and credits. It fined DraftKings CAD $100,000 CAD (about USD $77,700).

There are two exceptions to Standard 2.05. Operators may post the information mentioned above on their websites and through direct marketing to an active player, provided the player has given their consent.

“We are committed to complying with all applicable regulations in every jurisdiction in which we operate,” DraftKings spokesman James Chisholm told Canada Gaming Review on Thursday. “Upon being informed of the potential issue shortly after our launch, we took immediate action to remove the assets in question.”

The regulator said the operator could file an appeal with the License Appeal Tribunal (LAT), an adjudicative tribunal independent of the AGCO. Chisholm did not indicate that DraftKings planned to appeal.

Alleged Violations Began Day After DraftKings Launched

AGCO alleged that DraftKings’ Canadian subsidiary, Crown DK CAN Ltd., had “posted or aired multiple broad gambling inducements that included inducements of boosted 2:1 odds. The promotion was distributed widely via television and social media channels.”

The AGCO will continue to monitor the activities of all registered operators and hold them to high standards of responsible gambling, player protection, and game integrityThe regulator said the alleged violations began on May 19, the day after DraftKings Ontario launched. The alleged violations ended on May 31.

“The AGCO will continue to monitor the activities of all registered operators and hold them to high standards of responsible gambling, player protection, and game integrity,” said Tom Mungham, CEO of the AGCO.

“It is in the public interest that we ensure they are meeting their obligations under Ontario’s Gaming Control Act and the Standards.”

DraftKings did not launch in Ontario when the iGaming market opened on April 4, partly because the operator believed rivals operating in the province’s grey market for years held a distinct edge.

BetMGM and PointsBet Were Fined in Early May

Although the market is young, DraftKings isn’t the first operator to allegedly break the province’s rules. BetMGM Ontario and PointsBet Canada faced similar accusations by the AGCO on May 3.

At the time, the AGCO alleged that PointsBet had violated Standard 2.05 and levied a fine of CAD $30,000 (USD $23,400). Meanwhile, BetMGM also allegedly broke Standard 2.05 but ran afoul of Standard 2.04, requiring operators to be truthful in their marketing, including advertisements and promotions. The regulator fined BetMGM CAD $48,000 (about USD $37,450).

In an exclusive interview last month in the wake of the fines against BetMGM and PointsBet, gaming industry experts told Canada Gaming Review that such fines are not unusual and relatively commonplace in new markets because operators may not be familiar with the rules. They also said they didn’t believe the laws were too restrictive for operators and doubt the AGCO would change them in the short term.

Ontario is one of the only jurisdictions worldwide that restricts public advertising, bonuses, and other inducements. Many in the gaming industry have described the rules as highly prohibitive.

Keep reading: