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Iowa gaming regulators are cracking down on sports-betting operators and their technology vendors, assessing a total of $160,000 in fines against Caesars, FanDuel and PointsBet in recent weeks for not complying with state law.
“Some operators did not have adequate controls in place to identify this specific issue or prevent it from occurring,” Brian Ohorilko, director of gaming at the Iowa Racing and Gaming Commission, told VIXIO GamblingCompliance on Monday (August 29) of two fines imposed in July and August against Caesars and FanDuel for accepting credit card deposits despite a ban in state law and regulations.
“We believe all have controls in place now to prevent this from occurring in the future.”
FanDuel drew the largest fine of $75,000 in July for allowing the use of credit cards for deposits in sports-betting accounts.
In Iowa, credit cards cannot be used to wager on sports or any other form of gaming, with lawmakers passing legislation in 2020 to clarify that the ban applies specifically to the state's sports wagering market.
In April 2020, the United Kingdom also banned the use of credit cards to deposit and withdraw money on online gambling platforms, with similar restrictions also applied in Tennessee and Massachusetts.
After the Iowa Racing and Gaming Commission notified FanDuel of two violations, the company conducted an audit revealing 2,551 credit card transactions in 2021.
The violations occurred because of incorrect coding by Sightline Payments, a technology vendor for FanDuel, according to the commission’s minutes of its meeting on July 8.
Betfair Interactive US, the parent company of FanDuel, “took the extreme step of cutting ties with Sightline as a payment option in the State of Iowa,” according to Alex Wolf, who is the commission’s senior regulatory compliance senior counsel.
“Sightline takes its regulatory obligations very seriously and will continue to work with the [Iowa Racing and Gaming Commission] and all its regulatory bodies to ensure the highest level of compliance possible,” Sightline's Chief Legal Officer Jennifer Carleton said on Monday.
In another case involving the illegal use of credit cards, the commission assessed a $60,000 fine on August 25 against Caesars Sportsbook subsidiary American Wagering.
The violations included 485 transactions totaling $212,000.
Ohorilko told the website Radio Iowa the commission considered the violations to be “fairly egregious.”
As for PointsBet, the company in July agreed to pay up to $25,000 for three violations including accepting wagers on events with athletes under the age of 18 during last year’s Olympics in Tokyo.
There were about 25 bets totaling $666 on these events.
PointsBet pointed out the Olympic betting violations to the commission and drew a penalty of up to $5,000.
The second and third violations involved incomplete and late audits by PointsBet, which drew fines of up to $10,000 each.
Wes Ehrecke, president of the Iowa Gaming Association, said the compliance violations were significant but do not pose a threat to the future growth of sports betting in Iowa.
Sports betting generated $850,598 in tax revenue for Iowa in May, according to the commission.
“We have a robust market in Iowa, and we’re excited about the start of football season because football is the king of all sports when it comes to sports betting,” Ehrecke said.
“I don’t think that this is going to be much of an issue going forward.”
