SportsHub fined by NJ Authorities for DFS Operations

• SportsHub misses deadline to obtain a proper license
• The company uses private data without consent
• NJ slaps SportsHub with $30,000 in first DFS civil penalty in the state

New Jersey regulators have slapped DFS SportsHub Games Network with a $30,000 penalty for failing to protect consumer data and operating without a proper license.

NJ Hands Out First DFS Civil Penalty

New Jersey remains the most open sports betting market in the United States, but a fair one nevertheless. SportsHub Games Network has become the first Daily Fantasy Sports (DFS) operator in the Garden State to be issued a civil penalty for promoting products in the state without proper regulatory approval.

The operator will have to pay $30,000 for violating the New Jersey Fantasy Sports Act (FSA) which presently regulates the organization and distribution of fantasy sports betting contests in the state. Passed in August 2017, the law has been used for the first time in the case of SportsHub Games Network, signalling that unauthorized operators will need to take into consideration the state’s statutes.

New Jersey gave until February 6, 2018 for SportsHub to obtain the necessary license to operate in the state. However, after failing to do so, the operator continued to target NJ players and accept players from the state, a Division of Consumer Affairs investigation established.

NJ Attorney General Gurbir Grewal had this to say on the occasion:

“New Jersey’s fantasy sports law offers fans an opportunity to fully immerse themselves in the sports they love, while ensuring a safe and enjoyable experience for all who participate.”

Mr. Grewal argued that the settlement between SportsHub and New Jersey highlighted the state’s openness to sports betting operator but only in the cases when a proper licensing agreement had been struck between regulators and a businessowner.

SportsHub acknowledged the violations and agreed to change the strategy in the state that would no longer put it in violation of New Jersey consumer protection laws.

Consumer Protection High in New Jersey Sports Betting Industry

One of the main objections investigators have raised against SportsHub was the practice by the website to scoop up information about users from social media and sharing that data with third-parties. This was done without the knowledge of consumers.

Another conflicting issue turned out to be the Leaguesafe online payment method, that was touted by the operator as the most reliable banking option for players interested in DFS. However, investigators found more discrepancies, such as two versions of the Privacy Policy, which is the document websites and online businesses use to inform users how their data is collected, protected, and shared with third-parties.

SportsHub has acknowledged that mistakes have been made and that the operator needed to change its Terms & Conditions to better reflect current data protection standards and laws. Meanwhile, Division of Consumer Affairs Paul R. Rodríguez expressed satisfaction with the progress that was made:

“We are pleased that SportsHub has obtained the necessary permits to do business in New Jersey and has agreed to abide by all our laws and regulations going forward

As the fantasy sports industry continues to grow in New Jersey, we will closely monitor the activities to ensure that all operators are playing by rules.”

This is not the first time New Jersey has fined a sports betting company. In June, 2019, DraftKings was slapped with a penalty over a failure to protect self-excluded customers. Previously in May, NJ fined Gaming Innovation Group $25,000 for failing to prevent a $29 bet, on the grounds that the person placing the bet had falsified his geolocation. Another high-profile company, PokerStars also received a $10,000 penalty for accepting collegiate basketball teams.