Posts Tagged ‘Investigation’

DraftKings, FanDuel Settle with Massachusetts AG for $2.6 Million After Deceptive Practices Investigation

 DraftKings, FanDuel Settle with Massachusetts AG for $2.6 Million After Deceptive Practices Investigation

Daily fantasy sports (DFS) leaders DraftKings and FanDuel reached settlements with the Massachusetts Attorney General’s Office last week after AG Maura Healey completed an investigation into the companies’ alleged unfair and deceptive business practices. Each company will pay $ 1.3 million, with the money going to consumer protection and an AG’s Office program to “engage young people in technology.”

The investigation had to do with practices by the companies prior to DFS regulations taking effect on July 1st of last year. The Attorney General’s Office did not specify exactly what the specific business practices were that were in question, instead saying in a press release “that some participants in daily fantasy sports contests were not adequately protected and that comprehensive consumer-protective regulation was needed.”

The investigation likely had a lot to do with the way DraftKings and FanDuel advertised starting with their marketing explosion prior to the 2015 NFL season. Not only were sports fans (and even non-sports fans) inundated with commercial after commercial for the two rivals, but DraftKings and FanDuel were both criticized for making it look like it was easy for lots of people to win money playing daily fantasy sports. As we know, most players are net losers and it is the elite, high volume, deep pocketed professional fantasy players who rake in the lion’s share of the prize money.

The Attorney General may have also been investigating how the sites advertised their deposit bonuses. Those who play poker know how these types of bonuses generally work, but fantasy players who are unfamiliar likely saw things like “we’ll match your deposit up to $ 500!” as some sort of instant money doubler, when in reality, the bonus would be released in tiny increments.

“I am glad to have reached these settlements to address various consumer issues that existed at the early stages of this new industry,” said AG Healey in the press release. “We have since implemented a set of comprehensive regulations that provide consumers with broad-ranging protections and that have served as a model for many other states.”

The AG’s Office said that both DraftKings and FanDuel cooperated with investigators “and have made significant changes to their business models to protect consumers with respect to gameplay fairness, protections for minors, responsible gaming requirements, fairness in advertising, and data and funds security.”

FanDuel reacted to the settlement with the following public statement:

We have worked closely with the Massachusetts Attorney General’s office in their review of fantasy sports, including their issuance of the first set of consumer protection regulations for our industry, which we were pleased to comply with since their inception in 2016. FanDuel has worked tirelessly to pass laws in 16 states that solidify the fantasy sports industry and implement many of these same important consumer protections. FanDuel’s efforts have ensured that sports fans are able to continue playing the games they love in a safe, regulated environment and as we head into this football season, we look forward to continuing these efforts.

DraftKings also issued a statement to the media through its general counsel, Tim Parilla, which essentially echoes that of FanDuel. It reads, in part, “As the Attorney General said, this agreement resolves prior issues that were addressed through new regulations and DraftKings’ implementation of the industry’s most comprehensive compliance and game integrity programs. We are proud of the responsible environment we have created for our consumers and grateful to the Attorney General for working with us throughout this process.”

Featured photo credit: Andrew Dupont via Flickr

The post DraftKings, FanDuel Settle with Massachusetts AG for $ 2.6 Million After Deceptive Practices Investigation appeared first on Poker News Daily.

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Investigation into Hialeah Park Poker Tournament Reveals “Irregularities,” Potential for Punishment by State Gaming Authorities

 Investigation into Hialeah Park Poker Tournament Reveals “Irregularities,” Potential for Punishment by State Gaming Authorities

After a thorough investigation into a tournament that was, from most appearances, run completely against every traditional norm of tournament poker in existence, state gaming officials in Florida have completed their investigation into the Hialeah Park Poker Room, resulting in several violations being marked against the organization.

The situation first came to the attention of Florida gaming officials back in September after a poker tournament was held at the Hialeah Park Poker Room. The tournament, a $ 250 buy-in event with a guaranteed prize pool of $ 200,000 and a first place prize guaranteed of $ 60,000, was held to celebrate the second anniversary of the poker room. But, to some of the players who participated in the event, it seemed that there were some issues with the way the tournament was allegedly conducted.

The tournament took place from August 25-30, with the August 25-29 days serving as five Day Ones with two flights running each day and the final day of the tournament on August 30. That isn’t out of normal procedure for tournaments – the World Series of Poker’s “Colossus” was run much the same way – and there were some special amenities for other purchases. A $ 20 donation to the dealer pool earned another 8000 chips (players got 15,000 chips for their initial buy-in) and an add-on of 8000 was available for another $ 20. Where it got tricky is where Florida gaming officials found that the Hialeah Park officials potentially violated gaming regulation.

According to Nick Sortal of the Miami Herald, a player in the Hialeah Park tournament said that the numbers didn’t add up when the players still in the tournament came back on August 30. “The prize pool was $ 215,000, but they said there were 1061 entries,” Allen Powers, who usually frequents the Seminole Hard Rock Poker Room in Hollywood, FL, stated, which would have made for a $ 265,250 prize pool. “Then they said, ‘No, 961 entries,” which still didn’t match the $ 215K that the poker room management announced as the prize pool. In addition to this, the total chips in play – listed on the tournament board as more than 27 million – would have actually been under 24 million with 961 players. Powers and other players also alleged that the Hialeah Park poker room management put players in the event for free, never collecting an entry fee from them, and put them in specific seats rather than random placement.

The investigation by Florida gaming officials seems to have found several instances where the Hialeah Park Poker Room violated gaming laws in the state. According to Sortal, surveillance video did not cover parts of the poker room that it should have, including the areas where cash was handled. In addition to this, money was kept in poker room manager Nelson Costa’s office rather than in the cashier’s cage or a specific vault area. This was another allegation of the players that buy-ins were not handled at “The Cage” as a normal casino transaction would have occurred, but instead handled at the floor manager’s desk.

Other violations were found by the gaming officials. Normally records are kept of the payouts to winners of a poker tournament at the cashier’s cage, where they are given receipts for their winnings. Gaming officials have found 13 players who didn’t have any receipt for their winnings and Hialeah Park Poker Room officials never released an official tournament report of the names of the winner of the tournament, the final table nor its payouts. Finally, gaming officials found that surveillance video was not preserved as according to law, tournament records were not kept for the required amount of time (three years) and jackpot accounts were not maintained. All totaled, 11 different violations of Florida’s gaming statutes were listed by gaming authorities.

All of these violations are going to be tough for Hialeah Park officials to refute. The manager in question, Costa, has since left his position at the Hialeah Park Poker Room, along with some of the staff (that was allegedly trained by Costa). Sortal does not indicate whether Florida gaming officials have been able to speak with Costa regarding the incident but, regardless of whether they have or not, Hialeah Park officials have until Monday (January 18) to respond to the litany of violations that have been presented to them by the state’s gaming officials.

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NJ DGE Publishes Amaya Gaming Investigation Report

 NJ DGE Publishes Amaya Gaming Investigation Report

The New Jersey Division of Gaming Enforcement (DGE) released an 89-page report detailing its investigation of Amaya Gaming’s acquisition of PokerStars and Full Tilt and the possibility of issuing the company a Transactional Waiver Order – essentially a probationary license – to offer online gaming in New Jersey. As we know, the Order was granted, so PokerStars and Full Tilt will be able to enter the New Jersey market when ready.

The report goes into gory detail about the history of the two poker rooms and their issues with the U.S. government stemming from both the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) and Black Friday in April 2011. It continues to discuss the purchase of their parent companies by Amaya Gaming and how all that relates to their internet gaming application.

On just the second page, the report summarizes the green light it gave:

That investigation leads the Division to conclude that Amaya has demonstrated its suitability for a Transactional Waiver Order. While the PokerStars entities operated in violation of the law between 2006 and 2011, a number of considerations – including the severe criminal and civil sanctions imposed by the federal government, the complete and irrevocable separation of the previous owners and almost all of the former executives, the acquisition of the assets by Amaya and their incorporation into a robust compliance and control environment, as well as significant changes in the Internet gaming market since 2011– lead to a finding of suitability.

Most of the document, frankly, isn’t all that interesting unless you have a hankering for minutia, but things do perk up a bit when it gets to the investigation of current and former owners, executives, and management of Amaya, PokerStars and Full Tilt. The DGE traveled to the companies’ offices all over the world and conducted interviews with dozens people.

“In assessing the suitability of principal owners or senior executives (including consultants), the Division examines whether the individual was involved in the management or control of companies who were receiving, accepting or processing online wagers from United States players after the passage of UIGEA,” the report says.

“This suitability review to assess good character, honesty and integrity, also involves individuals who reported to principal owners and senior executives and those who had some decision making authority or control over marketing or game play to United States players or were involved in compliance, audit, payments or operations.”

Over 60 people were subject to review and perhaps interestingly, the DGE has required Amaya to terminate the employment of four of them (they were not named) if it wants to be granted an online gambling license.

Among the other requirements that had to be met before the Transactional Waiver Order was issued were:

•    Amaya has to give the state any funds still in the PokerStars accounts of former New Jersey customers.
•    A number of people are barred from ever having anything to do with Amaya including PokerStars founder Isai Scheinberg and his son, Mark, and former Full Tilt heads Ray Bitar, Chris “Jesus” Ferguson, and Rafe Furst. Howard Lederer was not mentioned.
•    Amaya must notify the DGE when it attempts to develop business in other jurisdictions.

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