The case goes to the heart of the legality of internet gambling in the U.S.
In New Jersey, gamblers must be physically present within the state in order to gamble online. The way companies ensure this is through geolocation, a multi-layered series of technologies that determine where a person is at the time he or she is trying to place a bet.
In this case, the gaming enforcement division determined, Gaming Innovation did not take adequate steps ensure that the computer server made the final call on whether a patron was within New Jersey. Instead, the patron was able to trick the system.
The company calls it a one-time incident that was quickly reported and fixed.
“This one-off single incidence of out-of-state gambling was due to a technical vulnerability which was quickly discovered and reported to the regulator in New Jersey in the first week the company went live in New Jersey,” Gaming Innovation said in a statement. “An end user from outside the state of New Jersey with technical knowledge managed to access the front end debugger to change the location and pretend to be from New Jersey.”
The company said it maintains controls to make sure it complies with regulations “at all times.”