GAN Fined by New Jersey Regulator for Geolocation Violation

Posted on: June 22, 2016, 03:38h. 

Last updated on: June 23, 2016, 12:21h.

GAN fined by DGE, no doubt to Chaffetz’s delight
Representative Jason Chaffetz is likely to pounce on the news of GAN’s recent fine, but despite his suspicions to the contrary geolocation failures in the regulated markets are almost unheard of. (Image:

GAN, formerly the GameAccount Network, has been fined $25,000 by the New Jersey Division of Gaming Enforcement (DGE) for allowing out-of-state customers to gamble online via an Android real-money casino app it provides for Betfair New Jersey.

Although the incidents appear to have been isolated, and the result of an “unintentional activation” of new software, the episode is likely to be seized upon by opponents of online gambling regulation to reinforce the narrative that geolocation software is not up to scratch.

Of course, it may equally be used as evidence that regulation works and that even small, isolated incidents are policed and penalized.

According to a DGE investigation, six people were able to access the platform and engage in gambling “in certain limited circumstances,” with less than $350 wagered in total. In its decision, the DGE noted that Las Vegas-based GAN had quickly fixed the problem and the software has now been approved by the regulator, but it was compelled to impose a civil penalty for the transgression.

Pinpoint Accuracy In New Jersey

Geolocation is a serious infringement and not just of New Jersey gambling law. Allowing residents of states where online gambling has not been regulated to bet on the internet, even by accident, would place the operator in violation of the Unlawful Internet Gambling Enforcement Act.

When online gambling went live in late 2013, Geolocation proved to be a technical hurdle for the newly regulated operators, who found the process far more difficult to achieve than in Nevada and Delaware, due to highly concentrated population clusters around the New Jersey state line.

Even then, the systems appeared to be mainly throwing up “false negatives,” ie, erroneously blocking out New Jerseyans far more than they were allowing non-state residents in.

Since then, systems has been perfected and have been demonstrated have such a degree of accuracy that they can pinpoint two gamblers playing online at opposite ends of a coffee shop.

Grist to the RAWA Mill

Nevertheless, supporters of the Restoration of America’s Wire Act (RAWA) have expressed skepticism about the efficacy of geolocation software. Representative Jason Chaffetz (R-Utah), who introduced RAWA in the House and chaired a legislative committee hearing on the bill last year, has persistently argued that online gambling regulation poses a threat to his own gamble-free state.

“I believe [RAWA] is a state’s rights bill, and I believe it’s the rights of states like Utah and Hawaii, where we have no gaming, to protect ourselves from something that we would not like to see within our borders,” he declared at last year’s hearing.

“We must explore ways to protect the rights of states to prevent unwanted internet gambling from creeping across their borders. Updating the wire Act can be a tool to protect states’ rights to prohibit gambling activity.”