PokerStars NJ Hit With $25k Fine for Geolocation Failure

PokerStars has been hit with a $25,000 fine by the New Jersey Division of Gaming Enforcement (DGE), after a malfunction in its geolocation technology allowed out-of-state players to enter and gamble on its site.
Any US state deciding to launch an online gambling industry must adhere to strict intrastate gambling laws in order to protect those residents from other states without gambling regulation of their own. PokerStars was clearly in violation of its obligation, but it appears that the software flaw was soon detected and its out-of-state players were swiftly shut out from the site. As an extract from the DGE decision published on January 20th explains:
“a limited number [of patrons wagered] for a short period of time before a subsequent geolocation check detected such patrons and blocked them from wagering.”
PokerStars has said that it has since implemented an update to its geolocation software to ensure that the error does not reoccur. PokerStars is not the only operator to fall foul of the DGE, though, and last year GAN, an iGaming technology firm which also provides its service to Betfair in New Jersey, inadvertently let six out-of-state players gamble on the site using an Android device. It, too, subsequently received a fine of $25k for the infraction.
PokerStars was shut out of the US market following Black-Friday of 2011, and the operators subsequent dispute with the Department of Justice for allowing American players to gamble for real-money on its site. The operator subsequently reentered New Jersey’s online gambling market in March of 2016, and since then, PokerStars has contributed to an uptick in New Jersey’s overall iGaming market; despite being in the bottom rung as far as online casinos go, PokerStars leads the state’s three operators in terms of online poker revenues. Overall, the Garden State generated iGaming revenues of $196.7 million in 2016, an improvement of 32% versus the previous year. From that total, online casinos noted a 36% revenue increase to $170.2 million, while online poker, too, reported a more modest increase of 11% to $26.5 million.

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