DraftKings Dispute $3 million Parlay Wager Placed Outside NJ

A Florida man who recently placed $3 million with DraftKings in parlay wagers in New Jersey has had betting account frozen after it was discovered that the bets were placed outside the state lines of the Garden State.

The leading sportsbook operator froze the bettor’s account in late October, just a matter of weeks after he had placed $3 million worth of parlay bets. A proxy based in New Jersey made two bets containing the same three selections on October 6 on behalf of the unnamed Florida man. DraftKings’ terms of use clearly state that a customer cannot allow another person to use their account to place a bet in order to circumvent New Jersey’s in-state betting laws.

The illegal 3-team Parlay

The three selections in the illegal parlay wager were futures wagers on Alabama to be victorious in the SEC West, Georgia to capture the SEC East and the Green Bay Packers to claim the NFC North. Details of the bets were reported heavily on social media shortly after being placed, and were thought to be the biggest parlay that DraftKings Director of Sportsbook Operations, Johnny Avello had seen taken during his 30-plus years in the sports betting industry.

The size of the wagers themselves alerted the DraftKings team to look further into where and how they were placed. It was only at that time that it was unearthed that the wagers had been placed with a proxy in New Jersey.

Looking further into the actions of the Florida man, it was discovered that since the beginning of the current football season, the Florida native has made other considerable wagers including a $2 million moneyline parlay bet on two NFL teams that generated approximately $2.1 million in profit, a large prop bet on Daniel James’ passing yards in an early-season NFL match up, and a straight out moneyline bet on the New Orleans Saints against an unspecified opponent. No comment was forthcoming from DraftKings on whether those wagers were placed through the same proxy.

The man claims he was given a verbal ‘pass’ to bet with DraftKings

The Florida man under investigation claims to have a relationship with DraftKings sportsbook operations boss Johnny Avello going back to when Avello was Wynn Las Vegas Executive Director of Race and Sports. According to the Florida man, he lost more than $1 million to the Wynn Las Vegas sportsbook in Nevada, a state which allows certain forms of online out-of-state betting. Reportedly, he obtained written permission to place bets at the Wynn Las Vegas sportsbook through a proxy based in Nevada.

The Florida bettor says he switched to DraftKings when Avello joined the sportsbook operations there in October 2018. He alleges that Avello gave him verbal permission to place wagers using a proxy at DraftKings in New Jersey just as he did with the Wynn Las Vegas sportsbook, a claim which Avello vehemently denies.

What is more, it seems DraftKings are well within their rights to freeze the man’s betting account. Casino industry regulations in New Jersey clearly state that no sportsbook worker can give authorization for online messenger betting in lieu of any existing federal or state regulations. An attempt to do so could threaten the integrity of the sportsbook and put the license of the sportsbook at risk of annulment.

Currently, regulations in Nevada allow bettors from out-of-state to use a proxy to place bets, which the bettor may have thought to be the law nationwide. However, whichever way you look at law as it stands, it has been broken. The crime exposed a violation of the U.S. Federal Wire Act as the activity involved transmitting betting information across state lines.