DraftKings Facing Legal Action Over Proxy Bet

By Ben Hamill - November 11 2020

DraftKings Facing Legal Action Over Proxy Bet

Sports betting and fantasy sports operator DraftKings may have to defend its decision not to permit the placing of bets by means of a proxy after freezing a Florida man’s New Jersey mobile sports betting account in October. This only weeks after the customer had via proxy placed parlay bets to the total value of US$3 million – and of which the proceeds payable to the customer would have been a whopping US$5.6 million.

The issue with the legality of the parlay wagers is that of owner of the account having been based in Florida, while the proxy placing the actual bets had at the time of the actual betting been located and based in garden state New Jersey.

Proxy bets are typically made by out-of-state bettors for the purpose of circumventing locational restrictions. DraftKings’ terms of use however prohibit customers from allowing third parties to place bets on their behalf by granting said third parties access to their sports betting accounts.

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Bettor Says He Feels Wronged

The disgruntled bettor, who has in the meantime reported the incident to the New Jersey Division of Gaming Enforcement (NJDGE), said he had felt wronged by the bookmaker upon realising that his account had been frozen following the placing of the massive sums of money in sports wagers. Both DraftKings and the NJDGE have yet to comment on the matter. The matter is reportedly still under investigation.

The bettor has in the meantime claimed having had a relationship with DraftKings director of sportsbook operators Johnny Avello dating all the way back to when Avello was working as executive director of race and sports for Wynn Las Vegas. He also claims to have in his possession a written permission authorising him to wager bets by using a New Jersey-based proxy – as well as having received verbal permission from the DraftKings director himself. Avello has denied this allegation.

Messenger Betting A Crime In NJ

Issuing the type of permission the Florida man claims to have received from Avello/DraftKings would according to casino industry expert Andrew Klebanow constitute a federal crime. If the sportsbook were indeed found guilty of having prompted a bettor to circumvent federal laws and regulations, it could – at worst – risk losing its licence to operate.

New Jersey laws clearly forbid the placing of a sports betting wager on behalf of another person. And since such a bet would be taking place across state lines, messenger betting appears to also contravene the federal Wire Act.

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