What were the terms of the Consent Order?
SportsHub’s Alleged Violations
In August of 2017, New Jersey enacted the Fantasy Sports Act (“FSA”), which regulates the provision of fantasy sports contests in the State and requires fantasy sports operators to obtain permits from the New Jersey Division of Consumer Affairs (the “Division”) in order to operate in New Jersey. Under the FSA, fantasy sports operators already conducting business in the State were required to obtain the necessary permits by February 6, 2018. The Division alleged that SportsHub failed to obtain a permit by the deadline and continued to operate in the State unlawfully before ultimately applying for a New Jersey fantasy sports permit in September of 2018.
Complying with New Jersey Fantasy Sports Law
In addition to paying a $30,000 settlement, pursuant to the terms of the Consent Order, SportsHub agreed that it would not conduct its fantasy sports business in New Jersey without obtaining a permit from the Division. It also agreed to maintain separate and distinct Privacy Policies and Terms and Conditions for each of the websites that it operates. These policies must clearly and conspicuously disclose whether SportsHub: 1) collects personal information from consumers’ social media accounts; 2) shares personal information with third parties; and 3) issues refunds to consumers. SportsHub will also need to revise its Terms and Conditions to require consumers to opt-in if they agree to binding arbitration in the event of a dispute. In addition, the company agreed not to sell, rent, or share personal information with third parties for marketing purposes without consumers’ affirmative consent.
SportsHub is the first New Jersey fantasy sports operator to be penalized under the FSA. Because New Jersey is just one of a growing number of states that regulate fantasy sports, it is important for fantasy sports operators to understand the developing laws and regulations in any jurisdiction in which they do business.