Days before the Maryland sports betting launch, BetMGM made an embarrassing mistake. And now it’s paying for it.
At its most recent meeting, the Maryland Lottery and Gaming Commission Agency (MLGCA) announced it fined BetMGM $146,000 for accidentally taking live bets during a demonstration.
“On November 16th, BetMGM accepted mobile wagers before being issued its license by the commission,” MLGCA Regulatory Oversight Managing Director John Mooney said during the meeting.
Changes made before testing led to Maryland sports betting live bets
Just seven days before sports betting went live in Maryland on Nov. 23, BetMGM conducted a demonstration of its sports betting platform.
Demonstrations are a normal part of a sports betting launch. Operators want to make sure their platform works as it should. Regulators want to make sure the operators are ready for launch.
Typically, the demonstration involves fake bets. But, on Nov. 16, real bets took place.
According to Mooney, BetMGM used a beta website that mimicked its real website. The company attempted to make some configuration changes to the beta site before testing. Those adjustments resulted in players depositing real money into their accounts and making 146 real bets.
BetMGM took swift action, according to Rhea Loney, the company’s chief compliance officer. It worked with its geolocation partner, GeoComply, to stop the bets. Loney said during the commission meeting:
“I want to assure the commission, that as soon as we were notified as to this issue, we acted immediately. [We] worked closely with GeoComply to ensure that any wagering available prior to launch authorization was stopped immediately.”
Roney said the company took swift action, reporting the incident to the MLGCA and launching an investigation into what happened.
BetMGM was able to cancel 145 bets and return the original deposits. But, according to Mooney, one bettor withdrew their winnings. The mistake was the result of human error, according to PlayMaryland.
BetMGM fine is the biggest in commission history
The commission decided to fine BetMGM $1,000 for all 146 offending bets. The total–$146,000–was the biggest fine in the commission’s history. The previous high was $5,000.
However, at least one member of the commission felt the fine allowed BetMGM to get off too easy.
Commission member Harold Hodges noted how serious the matter was, saying BetMGM violated a “very critical” commission rule. He then questioned whether the fine was enough to send a signal to other operators. Hodges said:
“I don’t see $146,000—even though it may be the largest penalty that we’ve ever levied against a company—I see that as no more powerful than like, you know, a slap on the hand, on the wrist, frankly.
So I guess that my concern is, number one, that we send a signal out to everyone else that we’re supposed to be governing that this is unacceptable, and I’m not sure $146,000 does that.”
Mooney pushed back on Hodges, pointing out that, up until that point, the biggest fine the commission ever levied was $5,000.