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Less than a month after the debut of mobile sports betting, Maryland gaming regulators have approved the state’s largest ever fine through a $146,000 settlement with BetMGM over the acceptance of wagers prior to the market’s official launch.
The amount included in a consent agreement approved on Thursday (December 15) represents $1,000 for each of the 146 bets that were placed with the BetMGM platform in Maryland for a brief period of time on November 16 when an internal testing error briefly directed pre-registered Maryland players to a live sportsbook website rather than an informational page.
BetMGM at that time had not received final operating approval from the Maryland Lottery and Gaming Control Agency, which was working towards a November 23 official launch date for licensed mobile sports betting operators.
“This appears to be an inadvertent mistake and it’s also the largest penalty that we’ve ever issued to anyone here at Maryland Lottery; it’s a serious mistake,” said Randy Marriner, chairman of the Maryland Lottery and Gaming Control Commission, during the regulator’s public meeting on Thursday.
The consent order was approved by commissioners in a 6-1 vote. The lone dissenter, Commissioner Harold Hodges, instead called for the settlement to be tabled pending further review and a broader discussion of Maryland’s approach to enforcement matters regarding online sports betting in general.
Hodges said a fine of the $146,000 amount would not be a sufficient deterrent to others and was “no more powerful than a slap on the wrist, frankly.”
Marriner denied a motion to table the settlement agreement and said that although $146,000 may not sound like a lot, “it’s a lot of money and I dare say, lessons learned.”
The previous record penalty for a gaming company in Maryland was just $5,000, according to John Mooney, managing director of regulatory oversight for the Maryland Lottery and Gaming Control Agency.
“So I can tell you the agency is not taking it lightly, and I don’t think BetMGM is taking it lightly,” Mooney said.
The unlicensed wagering on BetMGM’s Maryland platform occurred over a three-hour period and all but one bettor – who had already withdrawn their winnings – saw their wagers voided and stakes returned to their accounts.
BetMGM responded immediately to block all wagering once aware of the issue and launched a technical investigation into what had occurred, said Rhea Loney, the newly appointed chief compliance officer of the MGM Resorts International-Entain U.S. joint venture.
A report into the matter was submitted to Maryland regulators the next day and the incident was an “isolated occurrence” for BetMGM, having never occurred when preparing to launch in other states, Loney told the commission.
The Maryland agreement appears to be another sign of fine amounts starting to creep up for U.S. sports betting companies, particularly in those states that are among the later adopters of legal sports wagering.
On Wednesday, the executive director of the Ohio Casino Control Commission announced that the agency intended to impose a penalty of $250,000 on Penn Entertainment’s Barstool Sports for violations of state regulations prohibiting marketing on college campuses and ads aimed at minors.
A $250,000 penalty would be the largest ever imposed by a sports-betting regulator outside of Nevada, topping two penalties of $150,000 in New Jersey and Virginia, according to VIXIO GamblingCompliance’s Enforcement Tracker.
During a separate regulator meeting on Thursday, the Indiana Gaming Commission also approved a series of six regulatory settlements with licensed sports betting operators amounting to $64,500 in total penalties.
The six settlement agreements included fines of $28,250 against BetMGM and $21,000 against Betway, both for failing to properly restrict prohibited sports bettors from wagering.
