DraftKings fined in Connecticut for online slot machines that paid zero wins for a week

DraftKings and another gambling company were fined a total of $22,500 by the state of Connecticut for operating an online slot machine game that failed to pay any winners on more than 20,600 spins over one week in August 2023.

The game, Deal or No Deal Banker’s Bonanza, was advertised to pay out almost 95 cents for every dollar wagered on the game.

But from Aug. 15 through Aug. 21 last year, a total of 522 people in Connecticut who wagered nearly $24,000 on the game over more than 20,659 spins received no wins, according to a report by Connecticut’s Department of Consumer Protection.

“Effectively, it was impossible for any Connecticut patron to achieve a win on the game for a period of 7 days, while live on the gaming platform,” according to the report, which was first detailed by the CT Insider news outlet on Tuesday.

A spokeswoman for the DCP said, “It was the first incident [in the state] where an online slot machine was not paying out as advertised.”

The report found that neither DraftKings and the game’s producer, White Hat Gaming, notified Consumer Protection of the problem until the department requested information from the companies on Aug. 31 last year.

That was more than a week after customers complained about the situation, and after an internal investigation by White Hat Gaming determined the cause of the problem in paying out as advertised.

A file in the game’s software had not been loaded properly, according to the Consumer Protection probe. The game was relaunched on Aug. 22 after a fix was implemented.

Nearly a week earlier, on Aug. 16, a player told DraftKings in an online complaint that they had played “a couple hundred spins” of bets of 20 cents apiece, “and not had one single winning spin or partial win,” according to a summary of complaints reviewed in the probe.

“I believe that RTP is incorrect,” wrote the customer, using the gambling acronym “Return to Player.”

A DraftKings representative wrote the customer in response on Aug. 17, suggesting there was no problem.

“I understand how frustrating it can be when you haven’t hit a win,” the rep wrote. “However, all casino games are random, regardless of the player or length of time you’ve been playing.”

Another company rep, in response to a second customer’s complaint about many spins without seeing a payout, assured the player that the casino platform was regulated by the Consumer Protection Department and “are monitored on a regular basis to ensure fairness.”

The rep also told the player that there was an option to “self-regulate your play” but setting limits on wagers on the platform.

Another customer on Aug. 20 wrote DraftKings that he had played the game with more than 100 spins without a payout.

“I believe this is a problem as I have never played a slot game where I haven’t won a single cent in over 100 spins,” the player wrote.

In a response to that complaint, a DraftKings rep wrote, “I understand it can be frustrating to have a bit of a cold streak, but I can assure you that there is nothing wrong with the game itself.”

That response came three days after DraftKings had informed White Hat of three patron complaints about the game not paying out and after White Hat’s business intelligence team discovered an issue with the RTP settings on the game, according to the Consumer Protection Probe.

On Aug. 29, a full week after White Hat identified the glitch and fixed it the game, “all patrons were eventually refunded” on their play during the affected week “without any notification from Draft Kings” about the reason for the refund, the DCP said in its report.

In January, White Hat agreed to pay the DCP $3,500 in fines to settle allegations that the game operated for a week with a 0% Return to Player in violation of state regulations and that the company failed to comply with reporting obligations.

In April, DraftKings agreed to pay the department $19,000 to settle the same allegations.

Kaitlyn Krasselt, the spokeswoman for the Department of Consumer Protection, told CNBC that although “White Hat responded swiftly to inquiries from DCP investigators … The response from DraftKings to the consumer complaints was not satisfactory.”

“And as a result of the DCP investigation, [DraftKings] was instructed to implement greater internal controls for their products, submit regular reports for new games to DCP, and make improvements to their consumer complaints process,” Krasselt said.

She also said the incident with the slots game last year “is a great example of something that, if we were not there to intervene, may not have been taken seriously until our investigators got involved.”

A DraftKings spokesperson, in a statement to CNBC, said, “Our customers’ satisfaction and the integrity of our products are central to our success.”

“We have robust measures to monitor potential payout issues, and we investigate any concerns promptly. In the event of a game not functioning as intended, we ensure impacted customers are appropriately refunded,” the spokesperson said.

“The issue in Connecticut arose from an error on the game developer’s side. We identified a possible issue within 48 hours of launch and immediately escalated it for investigation. All impacted customers were fully refunded within days of concluding there was an issue, and we have not encountered any similar issues with this vendor.”

White Hat Studios, a division of White Hat Gaming, in a statement to CNBC, said, “Delivering a fun, fair and transparent gaming experience is a top priority at White Hat Studios.”

“Regarding the technical fault concerning one of our games live with DraftKings in Connecticut in 2023, we took immediate action as soon as we became aware of the situation,” the company said. “It was a one-off incident and all affected players were fully refunded by DraftKings.”

“We take player protection very seriously and worked closely with the regulator and DraftKings to resolve the issue.”