Underdog's $175,000 Fine: What Sportsbooks Should Fix in Age and Identity Verification

What happened in North Carolina?

At its September 23, 2026 meeting, the North Carolina State Lottery Commission received an enforcement update on two operators. One was Underdog Sports Wagering. The other was Hillside (North Carolina), LLC, which does business as bet365.

According to Covers' report of the meeting, Chief Regulatory Officer Eric Snider said Underdog self-reported that it had failed to verify the age and identity of 38 accounts belonging to people under 21. Those accounts could access its sportsbook, and eight of them placed bets. Underdog cooperated with the investigation and agreed to pay $175,000 as part of a settlement.

Two details make the case unusual. First, Underdog no longer runs a sportsbook in North Carolina. In December 2025, the Commission told bettors that Underdog planned to stop offering sports wagering in the state, and the company stopped accepting bets on December 16, 2025. Covers reports that the company gave up its license as a "business decision," and that the offenses occurred while it was still operating.

Second, bet365 was fined $75,000 in the same update. It had sent a push notification to people on the state's self-exclusion list after a technical issue temporarily kept that list from being applied.

North Carolina law is clear on the age limit. G.S. 18C-902 prohibits anyone under 21 from placing sports wagers, and online sports betting has been live in the state since March 11, 2024.

Why does this case matter to operators still in the market?

The case puts a price on a failure that compliance teams usually discuss in the abstract. Three lessons stand out.

Leaving the market does not end liability. The fine landed about nine months after Underdog stopped taking bets. Verification records, and any gaps in them, outlive the product.

Self-reporting reduces damage but does not erase it. Underdog found and disclosed the problem, and it still paid. The cheaper outcome is to catch underage accounts before they deposit and wager.

The number is small, and that is the point. Thirty-eight accounts is a tiny share of any sportsbook's customer base. Regulators do not grade on a percentage. A single under-21 account that places a bet is a violation.

Public reporting does not describe how Underdog's process failed. The failure points below are common patterns in sportsbook onboarding, not a reconstruction of Underdog's system.

Where do minors slip through sportsbook onboarding?

Underage accounts rarely get through because a check is missing entirely. More often, the check that runs answers the wrong question.

1. Borrowed identity. A data-only KYC match confirms that a name, date of birth, address, and SSN belong to a real adult. It does not confirm that the adult is the person holding the phone. A 19-year-old using a parent's details passes cleanly.
2. Self-declared date of birth that is never compared. The user types one date of birth and the verified record returns another. The flow confirms the identity matches but never checks the age.
3. Fallback paths. When the main check fails or times out, some flows drop to a softer path. That might be manual review, a document upload with lenient thresholds, or a "verify later" state that still allows deposits.
4. Accounts carried over from other products. Operators that run fantasy contests, prediction markets, or casino games alongside a sportsbook may move users between products. If a user onboarded under one product's rules gets sportsbook access without re-verification, the higher age limit is never applied.
5. Account sharing after onboarding. An adult verifies, then hands the account to a younger sibling. Nothing at onboarding catches this. Only ongoing signals can.
6. Duplicate and linked accounts. A blocked minor retries with different details on the same device, network, or payment method.

Which controls catch underage bettors?

No single control covers every failure point above. The table maps each layer to what it catches and when to run it.

Two design rules matter as much as the controls themselves.

Block money until age is verified. Allow no deposit and no wager until age has been verified. "Verify later" states are where underage accounts pile up.

Log every exception. Every manual override or fallback approval should record who approved it, what evidence was used, and why. If a regulator asks how an account got through, you need an answer for each account.

What should a sportsbook age-verification audit include?

Use this checklist to test your own flow before a regulator does.

• Can any account deposit or wager before age is verified? Test every path, including timeouts and retries.
• Does the flow compare the verified date of birth to the minimum age, or does it only confirm the identity exists?
• What share of approvals rely on a data match alone, with no document or selfie? Is that share justified by risk?
• Do users just above the age limit, for example ages 21 to 23, get a step-up check?
• Are accounts moved over from fantasy, prediction, or other products re-verified against sportsbook age rules?
• Is a sample of manual review approvals re-checked by a second reviewer?
• Are device, payment, and household links used to catch blocked users who try again?
• Must every deposit method match the verified account holder?
• When a control changes, is there a process to re-screen existing accounts?
• Could you show, for any single account, the evidence used to verify age and when each check ran?

Any "no" or "we'd have to check" marks the first gap to close.

How Signzy helps sportsbooks verify age

Signzy's age-verification product combines the layers above in one API:

• Database and non-document verification for fast onboarding
• Government ID verification across more than 14,000 supported documents
• AI facial age estimation that returns an over-or-under result against your age threshold in under a second
• Liveness detection that flags photo attacks, deepfakes, and mask-based spoofs

Checks can be set to step up by jurisdiction and risk level. Most users pass quickly, and borderline cases get stronger verification.

Related reading: Identity verification for gaming platforms, How online age verification works, and Signzy age verification.

Related Solution

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Sources

• Covers, "North Carolina Regulators Fine Underdog, bet365 for Sports Betting Violations," Sept. 23, 2026: https://www.covers.com/industry/north-carolina-regulators-fine-underdog-bet365-for-sports-betting-violations-sept-23-2026
• North Carolina State Lottery Commission, Sept. 23, 2026 meeting agenda (enforcement update listing): https://nclottery.com/Content/Docs/NCEL_Commission_Meeting_Agenda_09-23-2026_rev3.pdf
• North Carolina State Lottery Commission, notice on change to sports wagering operator, Dec. 10, 2025: https://ncgaming.gov/north-carolina-state-lottery-commission-shares-upcoming-change-to-sports-wagering-operator/
• Deadspin, "Underdog ends North Carolina sportsbook," Dec. 15, 2025: https://deadspin.com/legal-betting/underdog-ends-north-carolina-sportsbook/
• N.C. Gen. Stat. Chapter 18C, Article 9: https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_18C/Article_9.html
• Office of the Governor of North Carolina, sports betting launch, Mar. 11, 2024: https://governor.nc.gov/news/press-releases/2024/03/11/sports-betting-goes-live-nc-governor-cooper-places-futures-bet-carolina-hurricanes-win-nhl-stanley