PA Likely to Investigate DraftKings for Proxy Betting Scheme

DraftKings is already facing a $150,000 fine in NJ for a Florida player’s proxy betting and could face more charges in PA where the illegal wagers were also placed.
Illustration of a hand holding a tablet and pressing a button that says "BET" and another hand reaching with money, to give to the hand placing the bets, representing the Florida man who had a friend in new jersey place illegal bets on his behalf.
freepik & usgr
By
March 10, 2022

DraftKings is likely to be under investigation in Pennsylvania for a proxy betting scheme that also occurred in New Jersey.

NJ regulators fined DraftKings $150,000 for its role in proxy betting and ordered for the operator to show that it took corrective actions, including educating its employees vis-à-vis New Jersey gaming laws.

Documents provided by the New Jersey Department of Gaming Enforcement (NJDGE) show the scheme — which involved a Florida resident who was a VIP player for DraftKings at the time — ran from April to October 2020 and involved 21 proxy wagers in that state.

But the scheme didn’t stop at the Delaware River.

According to a complaint filed by the NJDGE, DraftKings had offered the player, Eric Stevens, “a special premium on his wagers in [Pennsylvania] in connection with special introductory offers.” The regulator said the offer was made through a VIP host for DraftKings, Victor Ronca, “when DraftKings commenced operations in Pennsylvania.”

That would be November 2019, five months before the first illegal wagers were made in New Jersey. The NJDGE complaint shows that a friend of Stevens, Larry Porter, placed bets on Stevens’ behalf in both states. Porter is also a Florida resident, but was physically in both states at the time the wagers were made, the complaint said.

DraftKings Sportsbook PA operates under the casino license of Penn National Gaming, which owns and operates the Hollywood Casino at The Meadows in Grantville. The property was known as Hollywood Casino at Penn National Race Course before rebranding in October 2021.

“Ronca informed Stevens that DraftKings had recently commenced operations in Pennsylvania and that if the Pennsylvania site were used, DraftKings could offer a premium bonus to Stevens,” the NJDGE complaint said. “Porter was therefore instructed by Stevens, with the knowledge of DraftKings, to drive to Pennsylvania from New Jersey and make large wagers in that state to qualify for the special offer.”

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DraftKings Likely Told PA Regulator of Scheme

The complaint shows that DraftKings first found out about the scheme and sent Stevens a written warning in October 2019, informing him that his proxy bets were illegal. This warning was contradicted by Ronca also telling Stevens verbally that he and Porter could continue to make the illegal wagers provided that Porter logged into Stevens’ DraftKings account at least two hours after it was accessed by Stevens.

DraftKings alerted the NJDGE of the scheme on October 24, 2020. Considering that similar illegal wagers were made in Pennsylvania, it is likely that the operator also alerted the Pennsylvania Gaming Control Board (PGCB) of the illegal wagers, lest the regulator finds out on its own that they had taken place.

PGCB spokesman Doug Harbach said Tuesday that he was unable to confirm or deny that a probe was taking place.

“Any action that may involve board-approved penalties is fully investigated by our Bureau of Investigations and Enforcement,” Harbach said. He added that the PGCB’s Office of Enforcement Counsel “would then review and decide to recommend some action taken by the Board — i.e., a fine, license suspension or revocation, or involuntary exclusion from gaming.

“Those two entities work confidentially until there is something to bring before the board.”

When asked if he could confirm or deny that DraftKings had alerted the PGCB of the scheme, Harbach said Wednesday that he was unable to. “I cannot since there may be an active investigation,” he said.

DraftKings did not return messages seeking comment on the matter. The operator complied with NJDGE directives to void the 21 open wagers and permanently close Stevens’ account.

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