SportsHub Games Network Inc. will pay a $30,000 civil penalty for unlawfully operating an online fantasy sports site in New Jersey without a permit.
The Minneapolis company agreed to change its business practices to resolve allegations that its conduct violated the state’s consumer protection laws by failing to disclose that it collects information from users’ social media accounts to share with third parties.
SportsHub operates Fanball, CDM Sports, National Fantasy Football Championships, Whatif Sports, Leaguesafe, and other fantasy sports games. It’s the first games operator to be penalized under the New Jersey’s Fantasy Sports Act, which legalized and regulated internet fantasy gaming activities in New Jersey in 2017.
“New Jersey’s fantasy sports law offers fans an opportunity to fully immerse themselves in the sports they love, while ensuring a safe and enjoyable experience for all who participate,” said Attorney General Grewal in a statement. “As the settlement announced today illustrates, New Jersey enforces the laws in place to ensure transparency and protect consumers from hidden threats to their online privacy.”
When New Jersey enacted the FSA in 2017, fantasy sports operators who were already conducting business in the state were given until Feb. 6, 2018 to either apply for a permit or stop operating in New Jersey.
Despite SportsHub’s failure to file a permit application by the deadline, it continued to conduct business in New Jersey, according to an investigation by the Division of Consumer Affairs.
It ultimately applied to the Division for a permit in Sept. 2018.
Additionally, the investigation found that SportsHub failed to clearly disclose to users that it collected information such as names, user IDs, images, email addresses, dates of birth, friend lists, and school names from social media profiles and then shared it with third parties or used it in research studies. It also limited consumers’ rights by requiring them to bring claims or cause of action against the operator through binding arbitration only, and it did not and does not issue refunds to consumers.
Acting Director of the Division of Consumer Affairs Paul Rodríguez said the Division was pleased that SportsHub has now obtained necessary permits and has agreed to abide by state law moving forward.
“As the fantasy sports industry continues to grow in New Jersey, we will closely monitor the activities to ensure that all operators are playing by rules,” he said.