BetMGM pays Maryland regulator record $146K fine for taking bets ahead of authorization

Online sports betting company BetMGM will pay the Maryland Lottery and Gaming Control Commission a record fine of $146,000 to settle alleged violations of the Sports Wagering Law, the largest consent agreement the commission has ever approved. According to the regulator, the company took wagers before it was officially authorized to do so. 

On November 16, BetMGM accepted mobile wagers before the company was granted a Maryland license. There were 146 mobile wagers made over three hours after a mistaken change in the configuration of the beta website allowed people to bet online prematurely. 

Each of the gamblers had their bids voided and their money returned, with the exception of one person who had already withdrawn their winnings. The commission voted to approve the agreement on the fine in a meeting Thursday. 

Rhea Loney, chief compliance officer at BetMGM, said the company acted immediately after discovering the error, working with their geolocation vendor to make sure no one in Maryland could place additional bets. 

“We also worked with the commission to get a report to you all and launched an investigation, a technical investigation, to find out how this occurred,” Loney said, as reported by The Baltimore Sun.

Roman Rubas, BetMGM’s director of technical governance, told the commission that BetMGM teams were making changes to the beta site, which is hidden from the public. One of those changes led to a link to redirect, letting customers place wagers rather than landing on a page saying betting could be coming soon to Maryland. 

As Commission Chair Randolph Marriner questioned whether it was a human error instead of a technical malfunction, Rubas assured him it was a configuration issue. He further said BetMGM had put internal processes in place to prevent the same issue from happening again and was working with the geolocation provider to block bids in places where wagering had not yet launched.

Previously, the highest payment for a consent agreement, which avoids a formal hearing where a penalty or fine could be applied, was $5,000, Maryland Lottery and Gaming spokesperson Seth Elkin said, as reported by BetMaryland. 

In Thursday’s meeting, Commissioner Harold Hodges questioned whether the penalty was appropriate for a company operating without a license. “It may be the largest penalty levied against a company. I see that as no more powerful than a slap on the hand, the wrist,” he said. “I think if anything, they should have their license withdrawn.”

The commission had the authority under state law to impose penalties of up to $5,000 for each violation, Elkin said. It also has the ability to revoke an entity’s gambling license. 

“This appears to be an inadvertent mistake. It’s also the largest penalty we’ve ever issued to anyone here at Maryland Lottery,” Merriner said. “We treat this very seriously. Where $146,000 might not sound like a lot of money, it’s a lot of money.”

BetMGM is one of seven mobile sports betting apps that launched in Maryland on Nov. 23, the day before Thanksgiving. Other sportsbooks now live in the state include Barstool Sportsbook, BetRivers, Caesars Sportsbook, DraftKings, FanDuel, and PointsBet.