GME3: Betting Blunder Busted, Kremlin’s Bot Plot, & Drake’s Stakes: Betting Offside?

In this week’s edition of the GME3, we’re looking at a fine levied against DraftKings in the state of New Jersey, a DOJ takedown of an illicit Russian misinformation campaign using AI, and yet another large wager placed by Toronto’s favourite rapper, this time on the Copa America semifinals. Read the full stories here!

Gambling

Betting Blunder Busted

The New Jersey Division of Gaming Enforcement (DGE) has fined DraftKings USD $100,000 for reporting inaccurate sports betting data to the state. In their, rather harshly worded, statement on the matter, the DGE called the error “unacceptable conduct” which demonstrated weaknesses in the company’s business abilities. The errors mainly involved overstating the amount of money wagered on multi-tiered bets (or parlays) while understating other categories of wagers.

In March of this year, the DGE’s Office of Financial Investigations became aware of similar issues in the way that DraftKings had reported data in other state regulators in Illinois and Oregon. From there it was easy to predict that similar issues would be occurring in New Jersey. Mary Jo Flaherty, acting director of the DGE, released an open letter to DraftKings stating that “these types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system.”

DraftKings has since fixed the problem, which they have blamed on a coding error in their newly created reporting system, but some damage has already been done to their reputation as a company. The reporting error caused Resorts Digital, the online branch of Resorts Casino, to submit incorrect tax returns for the end of 2023 and the beginning of 2024.

On March 29th, DraftKings published a letter to the state explaining that it failed to report the matter sooner because it was believed that the errors would not affect taxable revenue and, as such, did not require immediate attention or reporting. The DGE rejected this defence, stating that even though gross revenue was unaffected by the errors, wager data is a “critical component of the monthly tax return.”

DraftKings has since fixed the coding issue, discussed the significance of the error internally, trained staff and created additional monitoring, among other steps to ensure this doesn’t happen again.

Media

Kremlin’s Bot Plot

Earlier this week the United States Department of Justice (DOJ) announced that it disrupted a Russian operation using AI-enhanced social media accounts to spread pro-Russia messages in the United States and abroad. The DOJ seized two domain names and over 1,000 social media accounts as a result.

This marks the first time that the US has publicly accused a foreign government of using generative AI in an influence operation, a trend that we may see more of as generative AI technology becomes more advanced.

According to prosecutors, the operation was set up by a private intelligence firm based in Russia, staffed by Russian intelligence officers and a senior employee of the government-funded news outlet Russia Today. The operation was approved and funded directly by the Kremlin starting in 2023.

This organization is accused of designing a custom, AI-powered platform to create, control, and manage hundreds of fake social accounts posing as real American citizens. All of these accounts, which have since been banned from platforms like X, frequently posted pro-Russia talking points, videos of Russian President Vladimir Putin, and posts criticizing the Ukrainian government.

This investigation couldn’t have finished soon enough – being only months away from a presidential election, which security experts believe will be the target of both frequent hacking and social media influence attempts, spreading misinformation could potentially disrupt the vote. The swift action by the DOJ underscores the critical need for vigilance against such sophisticated influence operations, especially as we approach a pivotal election season.

Entertainment

Drake’s Stakes: Betting Offside?

Toronto’s favourite rapper has posted another bet on Stake, this time predicting that Canada will beat Argentina in the Copa America semifinals. The artist wagered $300,000.00 on this outcome, and with staggering 9.6:1 odds against them, stood to earn him over $2.8 million if it paid off. Unfortunately, there was a reason the odds were so high against Canada, as Argentina won the game with a 2-0 score.

More interesting (to me at least) are the dynamics involved in the Toronto rapper’s frequent large bets, always made via Stake, and always posted to social media. As mentioned in our previous writeup on the topic, Drake has a deal with Stake as a brand ambassador and is paid, allegedly, millions of dollars to post. Not only is Stake not registered with Ontario’s AGCO (meaning it solely operates in the province’s shrinking grey market), but gambling endorsements from celebrities that appeal to minors are actually illegal in Ontario. 

The Toronto rapper’s high-profile bets on Stake highlight more than just his confidence in underdog teams. They bring into sharp focus the murky legal waters surrounding celebrity endorsements for online gambling. With Stake operating in Ontario’s grey market and the dubious legality of gambling endorsements by celebrities appealing to minors, these posts tread a fine line between promotion and potential legal repercussions. As the landscape of online gambling continues to evolve, so too will the scrutiny of such high-profile endorsements, raising important questions about legality, responsibility, and the influence of celebrity culture on gambling behaviours.