BetMGM to Pay $146,000 for Operating without License in Maryland

The Maryland Lottery and Gaming Control Agency (MLGCA) approved the $146,000 BetMGM settlement during its meeting last week, imposing the largest financial sanction in its history.

Beta Site Configuration Error

BetMGM was slapped with a fine for accepting mobile wagers before the official market launch and essentially operating without a license. Six out of the seven MLGCA members voted to approve the sanction while one believed the violation merited a license withdrawal.

The violation of Maryland’s Sports Wagering Law appeared on November 16 – five days before the operator’s soft launch and seven days before its full launch on November 23 – after a technical failure in the beta website allowed people located in Maryland to place bets.

BetMGM accepted without a license 146 mobile wagers over the three hours before the violation was discovered and voided all but one in which the bettor had managed to withdraw the winnings. People who had their wagers voided got their money back.

Speaking before the MLGCA, Rhea Loney, chief compliance officer at BetMGM, said that the operator had acted immediately upon discovering the issue and requested its geolocation provider to block further bets from Maryland, as well as with the regulator while launching a technical investigation.

And while Rhea implied it was a technical failure that had led to the breach of the law, BetMGM’s director of technical governance, Roman Rubas, told commissioners that it was a configuration error that linked the beta site to a page where they could place wagers instead of a landing page.

“So it was human error, not technical malfunctioning,” asked Commission Chair Randolph Marriner.

Rubas confirmed it was a configuration error and then told the commission that BetMGM acted to put internal processes in place and prevent the same thing from happening again and requested its geolocation provider to block wagers from jurisdictions that have not launched mobile wagering yet.

Temporary License Suspension

The fine imposed was the largest ever levied by the regulator but one MLGCA member questioned whether the punishment was large enough for a business operating without a license.

Commissioner Harold Hodges wanted the regulator to send a stronger message by suspending BetMGM’s license until the regulator looks into it and voted against the settlement.

“This appears to be an inadvertent mistake,” commented Marriner on the transgression, arguing that the sanction is large enough to have a system-wide preventive effect.

“We treat this very seriously. Where $146,000 might not sound like a lot of money, it’s a lot of money,” he concluded.

The MLGCA denied Hodges’ request to reschedule the settlement vote for a later date and voted to approve the settlement, allowing both parties to avoid the inconvenience and expenses related to a formal hearing.