The New Jersey Department of Gaming Enforcement popped GameAccount Network with a $25,000 fine for allowing out-of-state betting on its Android app.
GAN is the online gambling software provider for Betfair (now FanDuel) in New Jersey.
What did GAN do wrong?
According to a civil action order signed by DGE Director David Rebuck, the fine stems from an incident in which GAN “inadvertently activated software on its Android application” that allowed six people located outside state lines to wager “less than $350 on their Internet gaming accounts.”
Rebuck wrote that the fine was backed up by “sufficient legal and factual support.”
Between the time at which DGE discovered the inconsistencies and the date of the fine order, GAN retooled its Android app software to fix the glitch, per the order. The DGE says that fix has been “tested and approved by the Division.”
Population density can make geolocation difficult
A reading of the DGE Director’s signed order indicates that the geolocation error was a simple software mistake, but a serious one since it allowed out-of-state players to participate in online gaming. This type of error violates not only New Jersey laws, but the federal Unlawful Internet Gambling Enforcement Act.
But New Jersey faces a unique set of challenges that set it apart from Nevada and Delaware, the only other states with legal online gambling. Those states have significantly smaller populations than New Jersey and fewer people near state borders.
Usually, geolocation tends toward false negatives, not allowing people outside of a state to play.
Reactions to fine: The good and the bad
In a recent opinion piece about the fine, PlayNJ.com contributor Steve Ruddock said the fine is a good thing for the gaming industry.
Opponents of online gambling often argue that it’s impossible for gaming enforcement bodies to track from where people are playing and how old those players are. That the DGE was able to detect six out-of-state gamblers proves that detection is possible.
The technology is in place to ferret out potential violations. The notion that a complete absence of evidence demonstrates the DGE (or other regulatory bodies) cannot catch violators has just been debunked.
A recent article from Casino.org expressed concern that opponents of online gambling, particularly U.S. Rep. Jason Chaffetz, would use the GAN gaffe as a platform for renewed efforts to ban iGaming.
Chaffetz is a well-known proponent of the Restoration of America’s Wire Act, a rewriting of the original Wire Act that would ban most forms of online gambling if enacted. The act would supersede Nevada, Delaware and New Jersey’s current laws allowing iGaming.
At the time of publication, Chaffetz had not issued a statement specific to the New Jersey ruling. Recent efforts to pass RAWA have been turned back.