The sports betting industry in Iowa has taken off over the last 12 months, but things have not always gone smoothly. DraftKings, one of the biggest operators in the state, is now facing a fine from the Iowa Racing and Gaming Commission.
DraftKings is under scrutiny because the company failed to update the self-exclusion list that was provided by the Iowa Racing and Gaming Commission (IRGC). Sportsbooks have up to seven days to update the list, and DraftKings failed to do so earlier this year.
The self-exclusion list is a way for problem gamblers to limit themselves from gaming. By registering for this list, people can be denied access to physical casino property and be banned from apps for a specified period of time.
IRGC administrator Brian Ohoriko noted that the violation came from the DFS side of DraftKings operations, and not on the sportsbook side. On December 26, the IRGC sent out an updated self-exclusion list, but DraftKings failed to update that data before January 2.
There are four ways that bettors can register for the self-exclusion list in the state of Iowa. Mailing the IRGC is one of the ways, as is signing up in person at the office in Des Moines.
Once someone signs up for the self-exclusion list, sportsbooks must remove those individuals from the marketing list, and all accounts must be immediately de-activated. The self-exclusion list helps to prevent problem gambling, and it also protects against bettors that are ineligible to place bets in the state of Iowa.
The IRGC has the ability to fine DraftKings up to $20,000, but eventually settled for a $5,000 fine at a hearing last week.
Fantasy Sports Legal in Hawkeye State
When Iowa legalized sports betting in 2019, the state also legalized the daily fantasy sports industry. Several states throughout the US have legalized the industry so that they can make a profit off of DFS revenue.
Despite the state seeing massive growth in the sports betting industry, the DFS side of legalized gaming has not taken off as expected. Just two operators are licensed to offer DFS options to bettors, and state officials don’t see that changing anytime soon.
DraftKings generated more than $460,000 in revenue during the 2020 fiscal year, and that operator had collected more than $3.7 million in entry fees. FanDuel was not as successful as its competitor, posting a revenue of $110,000 during the previous fiscal year and collecting just over $1 million in entry fees.
Both companies have already reported strong starts to the 2021 fiscal year, and each operator will blow past the marks from last year. Just like with the sports betting industry, the DFS operators have seen a strong bounce back since COVID-19 restrictions have been lifted and live sports have returned.
Other Operators Also Fined
Both FanDuel and DraftKings are licensed in Iowa, but that hasn’t stopped each company from being fined by the IRGC. This is actually the second time that DraftKings has been fined, and the fourth overall case since the industry was launched.
DraftKings has previously been fined $1,000 after state officials learned that the operator handed out accounts to at least three individuals that were on the exclusion list. Fortunately for DraftKings, this mistake was caught before those people could place any bets.
FanDuel has also faced a similar violation of the self-exclusion list and was also forced to pay a fine of $5,000. This set the precedent, and ultimately helped decide the fate of DraftKings in this latest controversy.
William Hill remains the only sportsbook operator that hasn’t been fined by the IRGC up to this point. The UK based bookmaker allowed an individual on the self-excluded list to open up an advanced deposit betting account. Luckily for William Hill, this person was able to place a bet before the error was caught, but was locked out prior to the bet was settled.