Boston-based sports betting company DraftKings has been fined $200,000 by the Securities and Exchange Commission for violating Regulation Fair Disclosure. The violation occurred when the company’s public relations firm published posts on the CEO’s social media accounts regarding strong growth in certain states before the information was publicly disclosed. DraftKings held the information for a week, failing to promptly disclose it to all investors as required.
As a result of the violation, DraftKings employees with corporate communications responsibilities must undergo Regulation FD training to prevent similar incidents in the future. The SEC emphasized the importance of fair and equal disclosure of material information to all investors.
This fine adds to a series of recent setbacks for DraftKings, including fines from New Jersey for inaccurate sports betting data and from Connecticut for an online slot machine that saw no winners despite thousands of spins. Additionally, the gaming enforcement division is investigating issues with the company’s reporting of sports betting revenue in several states.
Despite these challenges, DraftKings has the opportunity to rectify its practices and ensure compliance with regulations moving forward. Investors and regulators will be closely monitoring the company’s actions to ensure transparency and fair disclosure in the future.
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