New Jersey Issues Second Operator Fine for iGaming Geolocation Violation

For just the second time in the agency’s nearly yearlong history regulating online gambling, the New Jersey Division of Gaming Enforcement (NJDGE) has fined an operator for allowing wagers to be placed from outside state lines.

In a civil action order dated April 30th and signed by director David Rebuck, the NJDGE levied a fine of $25,000 on Malta-based backend provider Gaming Innovation Group (GIG). The penalty was based on GIG’s inability to prevent a player located in Nevada from accessing the company’s client site HardRockCasino.com.

$29 Bet Costs Online Casino $25,000

The out-of-state player placed $29 in wagers with the online/mobile wing of Hard Rock’s Atlantic City casino – bets which were ultimately won by the house – on July 4th of last year.

When the state approved its iGaming law in late 2013, online casinos and poker rooms in New Jersey were prohibited from accepting bets originating from anywhere outside the state. Backend providers like GIG are responsible for using geolocation technology to screen users and block out-of-state access entirely.

In his reporting on the incident for the Associated Press, gambling reporter Wayne Parry cited NJDGE determinations which found GIG at fault for the illegal wagering:

“In this case, the gaming enforcement division determined, Gaming Innovation did not take adequate steps ensure that the computer server made the final call on whether a patron was within New Jersey.

Instead, the patron was able to trick the system.”

Error Occurred Early; Voluntarily Reported Says GIG

HardRockCasino.com went live on June 28th, less than one week before the Nevada-based player illegally gained access.

That extremely early window was cited as an explanation for GIG’s geolocation errors in the company’s official statement on the fine:

“This one-off single incidence of out-of-state gambling was due to a technical vulnerability which was quickly discovered and reported to the regulator in New Jersey in the first week the company went live in New Jersey.

An end user from outside the state of New Jersey with technical knowledge managed to access the frontend debugger to change the location and pretend to be from New Jersey.”

As the civil action order clarifies, NJDGE officials initiated a complaint against GIG on December 12th. That complaint was adjudicated when the regulator and GIG agreed on a Stipulation of Settlement which limited the fine to $25,000.

That seems to be the standard for geolocation violations, following the NJDGE’s first ever fine over the issue was levied in 2017 against PokerStars NJ operator The Stars Group (known then as Amaya Gaming).

Thus far, the largest penalty assessed over illegally accessing New Jersey’s iGaming scene targeted a successful player. In March, the NJDGE ordered California resident Vinh Dao to pay back $90,500 in profits won illicitly in 2014 from the Borgata- and Caesars-linked online casinos.

Those licensed iGaming operators, and their affiliated geolocation providers, haven’t been hit with any publicly announced fines as of yet.

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