Posts Tagged ‘Practices’

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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Sheldon Adelson’s Las Vegas Sands Corp. Settles Corrupt Practices Probe, Pays Fine

 Sheldon Adelson’s Las Vegas Sands Corp. Settles Corrupt Practices Probe, Pays Fine

The Las Vegas Sands Corp., headed by online poker’s top enemy, Sheldon Adelson, has agreed to pay a $ 6.96 million criminal penalty to settle a federal case in which the government was investigating the company’s potential violations of the Foreign Corrupt Practices Act (FCPA).

The issue at hand stems back nearly seven years to 2010, when Steven Jacobs, who headed up Las Vegas Sands’ business in China for nine months, sued the company for unlawful termination. As Bloomberg.com worded it, Jacobs “accused Adelson of directing him to collect evidence on Macau government officials that could be used to ‘exert leverage’ on them to thwart regulation unfavorable to Sands casinos.”

The FCPA, rightfully, says it is illegal for companies and their executives to try to bribe foreign government officials. The one caveat here is that I believe Donald Trump is permitted to do this, especially now that he is President. Well, he doesn’t have anything to do with his businesses anymore, so it probably doesn’t matter. I mean, he told us he’s not going to be involved with his businesses, so I TOTALLY believe him. Not for a moment do I think Donald Trump has ever or will ever do anything shady with governments of other countries.

Jacobs claimed he tried to stop the illegal business practices and for that reason, he was canned.

A press release from the U.S. Department of Justice reads, in part:

According to admissions by Sands made in connection with the resolution, certain Sands executives knowingly and willfully failed to implement a system of internal accounting controls to adequately ensure the legitimacy of payments to a business consultant who assisted Sands in promoting its brand in Macao and the PRC, and to prevent the false recording of those payments in its books and records.  Sands continued to make payments to the consultant despite warnings from its finance staff and an outside auditor that the business consultant had failed to account for portions of these funds.  In addition, Sands terminated the finance department employee who raised concerns about the payments.  

In total, from 2006 through 2009, Sands paid approximately $ 5.8 million to the business consultant without any discernable legitimate business purpose, it admitted.  

Among those consultant payments was $ 60 million to help the company acquire a Chinese basketball team.

As part of the settlement, Las Vegas Sands admitted no guilt and was not charged with a crime. It sounds lame, but that’s how these things go.

In 2016, Las Vegas Sands reached a similar settlement on the same matter with the Securities and Exchange Commission, paying a $ 9 million fine. After scapegoating people like Jacobs and then getting found out by the U.S. government, the company tried to claim it was just ignorant, just a blind little sheep wandering into the woods (I don’t know what I just wrote).

“We were moving into unexplored territory and we wanted to do some unique things that were structured by attorneys and accountants in New York, Hong Kong and Beijing,” Sands Chief Operating Officer William Weidner said at the time. “I don’t know that you can blame the lawyers who structured the deals.”

“But I think that the fact that I wasn’t disciplined in this matter shows that we were operating in areas that hadn’t been considered by regulators.”

Yeah, ok.

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