It’s illegal in the U.S. for one person to place a sports wager for someone else. So-called “messenger betting” is seldom prosecuted, although it’s a felony. But as more jurisdictions begin offering sportsbooks, some are calling for more involvement by the federal Financial Crimes Enforcement Network (FinCEN).
Two months ago, a bettor made headlines when he claimed DraftKings had shut down his mobile sports betting account after he won a $3 million parlay. DraftKings, which runs New Jersey’s sports betting, suspended the account after learning that a friend of his placed a bet on his mobile account in New Jersey while the originator of the bet was living in Florida.
DraftKings says that the appropriate “authorities” without naming them, are looking into the matter. Authorities that might be appropriate for such an investigation include the New Jersey Attorney General and the state Division of Gaming Enforcement (DGE). Both have been silent on this issue.
New Jersey’s sports betting market is having a banner year. In November, there were $936.1 million in bets—more than $1 million higher than the national record for a single month. There’s considerable interest in discovering how many of those wagers are proxy wagers from out of state. This would probably be a violation of the 1960s Federal Wire Act, and could lead to intervention by FinCEN.
New Jersey’s DGE is promoting a Know Your Customer program for mobile platforms. Its technical staff has created a KYC plug in that can be used to identify and locate patrons.
DGE Director David L. Rebuck has been having discussions with FinCEN. He said his agency strives to make the state’s casinos national leaders in following federal law. Especially federal laws on money laundering and relating to reporting currency transactions larger than $10,000.
He is also discussing mobile and online gaming with FinCEN. Mobile betting has required sports betting operators to quickly get up to speed on best practices for verifying both a patron’s identity but also location when creating an account.
One such tool is face recognition software, such as is routinely employed in many Smartphones. But some operators are reluctant to employ it since many consider it too intrusive.
But there are other tools as well that pinpoint what phone is being used for a wager and what account it is linked to. These identifiers can be used on desktop or laptop computers.
Sportsbooks also can suspend an account if they find out single customers have multiple accounts.
Recently New Jersey began employing new enhancements to the account creation identification system. Rebuck said he expects this system to be a model for other states that have sports betting.
