FanDuel pays Iowa $95K penalty after offering prohibited sports betting markets

In a recent settlement, online sportsbook operator FanDuel has agreed to pay the state of Iowa $95,000 in penalties for offering prohibited betting markets. FanDuel's operator in Iowa, Betfair Interactive US LLC, had licenses for retail sports betting at Diamond Jo Dubuque and Diamond Jo Worth, as well as running FanDuel's licensed online sportsbook.

The company admitted to violating Iowa's compliance regulations by offering wagers on the Maharlika Pilipinas Basketball League (MPBL) and yellow and red card propositions in international soccer.

During the period from June 4, 2024, to April 2, 2025, fans placed 21,638 bets on the MPBL, generating $1,189,640.93 in total handle and $60,692.19 in initial profit for FanDuel. However, the MPBL is not recognized as a top-tier international basketball league by FIBA, making FanDuel's wagers on this league illegal in Iowa. FanDuel refunded affected customers' net losses while retaining winning payouts. In July 2025, the company returned $154,898.99 to 1,665 customers and adjusted its revenue filing by -$60,110.03.

Additionally, FanDuel faced issues with betting on yellow and red cards in international soccer, which is prohibited in Iowa. The company pulled these markets and improved its filtering process, but one bettor still went unaccounted for, resulting in a $44.86 payout through Iowa's unclaimed-property process. FanDuel's retail sportsbooks in Iowa closed on April 15, 2026, following a $125,000 penalty in July 2025 for five counts of unauthorized wagers and responsible gambling violations.

The Iowa Racing and Gaming Commission has expressed disappointment in FanDuel's compliance track record, emphasizing the need for consistency in treating out-of-state operators versus brick-and-mortar casinos. Both FanDuel spokesperson Ben Roth and Betfair CFO David Jennings acknowledged the mistakes and have taken steps to remediate the issues, including increased training, detailed checklists, automation, and ensuring no impacted customers were adversely affected. The penalties from this settlement will go to Iowa's general fund.