Massachusetts Gaming Commission Fines Sports Betting Operators for Violating Gaming Commission Regulations

BOSTON, Massachusetts (July 25, 2023) — The Massachusetts Gaming Commission recently issued decisions resulting in fines for three of the state’s sports betting operators — MGM Springfield, Plainridge Park Casino, and Encore Boston Harbor. These operators were found to have violated Gaming Commission regulations prohibiting wagers on regular season games of collegiate teams from Massachusetts unless part of a tournament.

MGM Springfield was hit with a $20,000 fine for accepting bets on two regular-season games of Harvard’s men’s basketball team in February 2023. MGM swiftly self-reported this violation, attributing it to a geolocation error from their vendor BetMGM, which had incorrectly classified Harvard as located in Connecticut. In an attempt to rectify the situation, MGM assumed complete responsibility for the misstep, introducing new protocols to forestall similar issues in the future. These measures include daily audits of their betting offerings and regular revisions of their guidance documents. Despite MGM’s swift reporting and introduction of new protocols to avoid similar issues, the commission underscored the seriousness of the violation and levied a substantial fine.

Likewise, Plainridge Park Casino was fined $20,000 for a similar infraction when they accepted wagers on a regular season game involving the Merrimack College men’s basketball team in February 2023. The error, which was attributed to vendor Kambi listing Merrimack as a Florida-based team, led to the placement of 33 unlawful wagers. Despite Plainridge’s swift self-reporting and new compliance procedures, the commission again emphasized the severe implications of breaching the in-state college betting prohibition.

In a third but slightly different scenario, Encore Boston Harbor was fined $10,000 for accepting a wager on a Boston College women’s basketball game in February 2023. Encore self-reported this violation before the game began, and the error was attributed to an incomplete prohibited wagering list that didn’t fully include the Boston College team’s names. In this case, the lesser fine could be attributed to the fact that only one small value bet was placed, and the violation was discovered and reported before the game took place. Nonetheless, the commission determined that Encore bore joint responsibility with its vendors to ensure thorough regulatory compliance before the start of any betting activity.

Why It Matters

Together, these decisions by the commission send a message to operators and their vendors alike to input stringent controls from the start to ensure complete compliance with betting regulations. The commission has made it clear that even short-lived lapses or isolated instances of noncompliance, regardless of self-reporting and corrective measures, may result in findings of violation and significant fines.

The industry is now expected to proactively strengthen its internal procedures and maintain constant vigilance to prevent future violations. Through these cases, the commission has shown its firm stance on enforcing strict statutory and regulatory compliance in the newly legalized Massachusetts sports betting landscape.

These decisions serve as an important cautionary tale for the regulated gambling industry, marking a clear move toward a stricter regulatory environment. They underscore the need for operators, vendors, and legal practitioners to remain vigilant in ensuring compliance with state laws and regulations. This requires improving existing operational procedures and investing in developing robust systems that can swiftly identify and rectify potential violations.

By:  Ketan D. Bhirud, Callan G. Stein, Whitney L. Shephard and Michael A. Lafleur

View original. Commission Press Releases.

SOURCE: Troutman Pepper & Lexology.