Commissioner Gary Bettman staged a hearing this month, during which Coyotes representatives admitted to performing physical tests on draft prospects prior to the combine.
The NHL postponed the scouting combine indefinitely in March because of the COVID-19 pandemic.
TSN's Darren Dreger reported in January the NHL was looking into whether the Coyotes performed physical testing of players from the CHL.
"While the Combine Testing Policy Memoranda reference a fine of 'no less than $250,000 for each violation' of the Policy, I exercise my discretion to impose the aforementioned discipline—which I consider to be more appropriate given the specific circumstances of this case," Bettman said in a statement.
The Coyotes sent their 2020 first-rounder to the New Jersey Devils as part of the trade for Taylor Hall last December. Arizona also dealt its third-round pick to the Colorado Avalanche for Carl Soderberg in June 2019.
With Wednesday's ruling, the team won't be on the clock until the fourth round of this year's draft, which will be held virtually October 9-10.
The Coyotes could be potentially out until the third round next year as well. Their first- and second-rounders would go to the Devils if Hall re-signs this offseason.
The timing couldn't be much worse, either, since Arizona is looking for a new general manager after John Chayka resigned in July. Some will now question whether Chayka's departure was merely a coincidence of a case of the former GM getting out before the hammer fell.
Jason Gregor @JasonGregor
And John Chayka left (or quit according to Coyotes release) the organization, so the new GM will begin without a 1st round pick this year, next year or a 2nd rounder this year. Tough way to start. How much of this is on Chayka? GM had to know about the testing, did he not? https://t.co/6qN5aWXjiR
Regardless, his replacement will now be left to pick up the pieces.
The Coyotes reached the playoffs for the first time since 2012 before losing to the Colorado Avalanche in the first round. That would be a cause for optimism in most circumstances.
Instead, Arizona has to worry about whether it can re-sign Hall, identify a new GM and focus on how to continue looking toward the future without a slew of draft picks in 2020 and 2021.