Fantasy Sports Company Penalized for Unlawful Operation
Being licensed as a gaming operator in the United States is a must. In individual states where casino gaming, the lottery and other options are on offer, the regulator of the state requires licensing before operations can begin. In New Jersey, an operator of a fantasy sports site is now being penalized for operating without licensing, dating back to 2018.
Last week, the Division of Consumer Affairs along with Attorney General Gurbir S. Grewal made the announcement that SportsHub was fined $30,000 for operating fantasy sports services in New Jersey without a license. The company is licensed currently but they provided services for the majority of 2018 without it.
The 2017 Fantasy Sports Act required operators to obtain licensing and it was discovered that SportsHub did not apply for a permit for over a year after the Act was passed into law. A deadline had ben set for early February of last year for operators to stop offering services or apply for licensing.
SportsHub operates under several brands including Whatif Sports, CDM Sports, Leaguesafe, Fanball and National Fantasy Football Championships. The company was found to have not only violated licensing issues but also other areas including consumer disclosures.
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The Division of Consumer Affairs in the Garden State revealed that the company did not tell consumers that they collect information from social network sites and shares it with third-arty organizations. They also limit the rights of consumers to sue the company except via binding arbitration.
The investigation also found that the company has a policy in which refunds are never issued. This is a major problem and one that consumers really need to be aware of.
According to the Division of Consumer Affairs, the company was also in violation of the Consumer Fraud Act in several ways. Personal information of their customers was shared without content for the purpose of marketing.
Surprisingly, SportsHub admitted they were in the wrong. In many cases such as this, the company tries to make excuses or reasons behind their actions. For SportsHub, they took the blame. They stated they were in the wrong and agreed to make changes to their practices to resolve the issues at hand.
The company stated they would pay the $30,000 fine and will be complaint with all laws and regulations in New Jersey moving ahead. Paul R. Rodriguez, the Division of Consumer Affairs Acting Director stated that they will continue to monitor the company as well as other fantasy sports operators.
Mr. Rodriguez stated that the Division is pleased that SportsHub obtained the permits necessary to operate in the Garden State and will be abiding by the laws and regulations going forward.
SportsHub is the first operator of a fantasy sports site that has faced a penalty due to the Fantasy Sports Act in New Jersey. According to Attorney General Grewal, the Act was designed to let consumers play and be protected from ‘unscrupulous operators’.
According to Grewal, the Act provides fans with an opportunity to fully immerse in the sports they love while ensuring the experience is safe and enjoyable. The AG pointed out that the settlement with SportsHub shows that New Jersey enforces the laws that are in place to protect consumers and ensure transparency of companies.