Recent Audit Uncovers Noncompliance Issues at BetMGM
A recent audit of BetMGM’s sports betting operations, conducted by Gaming Labs International (GLI), has revealed several significant noncompliance incidents in Massachusetts. This audit comes in the wake of earlier compliance issues that prompted BetMGM to take proactive measures to ensure adherence to state regulations. The Massachusetts Gaming Commission (MGC) has been informed of these findings, which will be addressed in an upcoming adjudicatory hearing.
Background of the Audit
The impetus for the audit was a series of noncompliance incidents reported to the MGC earlier this year. In February, it was disclosed that BetMGM had accepted over 15,000 prohibited player prop bets related to NCAA football throughout the previous season. The total handle for these bets exceeded $200,000, raising concerns about the operator’s compliance with state regulations governing sports betting.
In light of these revelations, BetMGM engaged GLI to conduct a thorough audit of its betting markets. The goal was to identify any additional improper practices and ensure that the operator was in full compliance with Massachusetts gaming laws.
Findings from the Audit
Preliminary results from the ongoing audit have uncovered a range of noncompliance issues beyond the initial NCAA football prop bets. An Investigations and Enforcement Bureau (IEB) spokesperson reported that BetMGM had also accepted:
- Improper Bets on NCAA Basketball: This includes 13 player prop bets on two NCAA basketball games in the National Invitation Tournament (NIT), totaling $469.10.
- Women’s NCAA Basketball Bets: The audit found 12 player prop bets related to the NCAA women’s Elite Eight, amounting to $208.34.
- Belarusian Sports Leagues: BetMGM accepted bets on prohibited Belarusian sports leagues, which are not allowed under Massachusetts regulations.
- Glory Kickboxing Bets: The operator also took 106 bets on Glory Kickboxing, another prohibited sports league.
These findings indicate a broader pattern of noncompliance that extends beyond the initial incidents reported earlier in the year.
The Scope of Noncompliance
The total number of improper NCAA football player prop bets has now reached 15,428, as the audit revealed an additional 41 bets that were not previously accounted for. This accumulation of violations raises significant questions about BetMGM’s internal compliance mechanisms and oversight processes.
Notably, the incidents were not self-reported by BetMGM. Instead, a member of the MGC’s sports wagering team identified the improper bets and brought them to the commission’s attention. This lack of self-reporting could have implications for how the MGC views BetMGM’s commitment to compliance moving forward.
Implications for BetMGM
The findings from the audit will be discussed in detail during a future hearing with the MGC. The commission’s response to these noncompliance issues could range from fines to more severe penalties, depending on the severity and frequency of the violations. The ongoing scrutiny of BetMGM’s operations underscores the importance of regulatory compliance in the rapidly evolving landscape of sports betting.
Q2 Sports Betting Results
In addition to the audit findings, the Massachusetts Gaming Commission recently reviewed the Q2 sports betting results from licensed online operators. BetMGM reported $7.7 million in gross gaming revenue, contributing $1.5 million in tax revenue to the state. While these figures are substantial, they pale in comparison to competitors like DraftKings, which reported $73.5 million in gross gaming revenue and $14.2 million in tax revenue.
The financial performance of BetMGM, juxtaposed with its compliance issues, raises questions about the operator’s market position and future strategies in Massachusetts. As the sports betting landscape continues to evolve, maintaining compliance will be crucial for BetMGM to sustain its operations and reputation in the competitive market.
Looking Ahead
As the MGC prepares to address the noncompliance issues raised by the audit, the future of BetMGM in Massachusetts hangs in the balance. The outcomes of the upcoming adjudicatory hearing will likely shape the operator’s approach to compliance and its overall strategy in the state. With the stakes high, both for BetMGM and the integrity of the sports betting market, all eyes will be on the commission’s forthcoming decisions.