Tipico is facing a substantial fine of $25,000 even after it has left the state of New Jersey. The NJ Division of Gaming Enforcement issued the fine for the alleged violation of the rules of self-exclusion - and for allowing a customer to cash out bets at significantly exaggerated odds.

An operator is penalized for violating self-exclusion rules and cashing out inflated odds - despite exiting the state more than a year ago. The New Jersey Division of Gaming Enforcement has imposed a $25,000 civil fine on gaming operator Tipico for multiple regulatory violations that occurred while the company was still operating in the United States. The fine comes even though the sportsbook operator has since exited the US market, having sold its American operations to MGM Resorts International on the 24th of June, 2024.

According to the DGE, Tipico breached state regulations in two significant ways: by sending promotional materials to self-excluded individuals and by allowing a customer to profit from wagers placed at improperly inflated odds.

Self-excluded players received promotional emails

Between the months of August 2021 and May 2022, Tipico sent 973 promotional emails to a total of 162 patrons in New Jersey who had opted into the state's self-exclusion program, which is designed to protect problem gamblers. The emails were sent through a third-party vendor, but the failure, according to the DGE, stemmed from Tipico’s internal marketing team not properly configuring filters in the system.

The problem is that the error went unnoticed for several months. Tipico only discovered the issue later on, in March 2022, after the resignation of its former Head of US Compliance, and did not report it to the DGE until May of that year.

"In August 2021, when Tipico's marketing team was configuring the third-party system to send and filter emails, it failed to notice that the filters were not operating properly," wrote Mary Jo Flaherty, Interim Director, in the official ruling. To prevent future occurrences, Tipico reportedly created an internal reporting system to identify self-excluded players before sending any promotional communications.

Payouts at erroneous odds lead to further violations

Another major incident cited by the DGE occurred in January of 2024. A Tipico customer placed 41 parlay bets with a combined stake amounting to $28,029.26. Due to a system error involving Tipico's parlay odds provider, the customer was offered and accepted inflated cash-out values, resulting in a total payout of $39,593.26.

Tipico attempted to halt the withdrawals and consulted with the DGE for guidance, seeking to void the wagers. However, in New Jersey, operators are generally not permitted to void bets that were accepted with erroneous odds. The customer filed a complaint, which concluded that Tipico was responsible for honoring the bets.

Following the incident, both Tipico and its odds provider implemented new technological safeguards to ensure that future cash-outs would not exceed appropriate odds.

Regulators opt for civil fine over further action

While acknowledging the seriousness of the violations, the Department of Gaming Enforcement accepted Tipico's offer to settle the matter with a $25,000 civil penalty as well as chose not to pursue additional disciplinary action. However, the division left the door open for further consequences should Tipico decide to re-enter the New Jersey market.

The DGE accepted the offer of Tipico for a civil monetary penalty of $25,000 and no further regulatory action. However, should Tipico return to the state and incur any additional violations of the gaming statutes, no matter how minor, it will result in further disciplinary action, the agency stated.

Though Tipico is no longer active in the US, the case demonstrates the ongoing regulatory scrutiny operators face and the importance of maintaining compliance - even after exiting a jurisdiction.