BetMGM Faces Compliance Challenges Following Recent Audit
A recent audit of BetMGM’s sports betting operations by Gaming Labs International (GLI) has unveiled a series of noncompliance incidents, raising significant concerns within the Massachusetts gaming landscape. This audit comes on the heels of previous compliance issues reported earlier this year, prompting BetMGM to take proactive measures to ensure adherence to state regulations.
Background of the Audit
In February, the Massachusetts Gaming Commission (MGC) was alerted to a troubling situation involving BetMGM’s acceptance of over 15,000 prohibited NCAA football player prop bets during the last season. The total handle for these bets exceeded $200,000, highlighting a substantial breach of compliance that caught the attention of regulators. Notably, these incidents were not self-reported by BetMGM; instead, they were discovered by a member of the MGC’s sports wagering team, who flagged the improper bets for further investigation.
In response to these findings, BetMGM engaged GLI to conduct a comprehensive audit of its sports betting markets. The goal was to identify any additional noncompliance issues and rectify them before they could escalate further.
Preliminary Findings of the Audit
The preliminary results of the ongoing audit were presented to the MGC, revealing that BetMGM had not only continued to accept prohibited NCAA football player prop bets but had also expanded its noncompliance to other areas. The audit uncovered several additional incidents, including:
- Prohibited Bets on Belarusian Sports Leagues: BetMGM accepted bets on events from leagues that are not permitted under Massachusetts regulations.
- Additional NCAA Football Player Props: The audit revealed an extra 41 improper NCAA football player prop bets, bringing the total to 15,428.
- College Basketball Bets: The operator accepted 13 player prop bets on two NCAA basketball games in the National Invitation Tournament (NIT), totaling $469.10.
- Women’s NCAA Basketball Bets: There were also 12 player prop bets on the NCAA women’s Elite Eight, amounting to $208.34.
- Glory Kickboxing Bets: A total of 106 bets were placed on Glory Kickboxing, another prohibited sports league.
These findings have raised alarms among regulators, as they indicate a pattern of noncompliance that could have serious implications for BetMGM’s operations in Massachusetts.
Upcoming Adjudicatory Hearing
The Massachusetts Gaming Commission is set to address these noncompliance issues in a future adjudicatory hearing with BetMGM. The hearing will provide an opportunity for the operator to respond to the findings of the audit and outline the steps it plans to take to rectify these issues. The outcome of this hearing could have significant ramifications for BetMGM, including potential fines or restrictions on its operations within the state.
BetMGM’s Financial Performance
Despite the compliance challenges, BetMGM recently presented its Q2 sports betting results to the MGC, revealing a gross gaming revenue of $7.7 million and a tax revenue contribution of $1.5 million for the period from April to June 2024. While these figures indicate a solid performance, they pale in comparison to competitors like DraftKings, which reported $73.5 million in gross gaming revenue during the same period.
Broader Context in Massachusetts Sports Betting
The ongoing compliance issues faced by BetMGM come at a time when the Massachusetts sports betting market is rapidly evolving. Other licensed operators, such as FanDuel and DraftKings, are also presenting their financial results, showcasing the competitive landscape in which BetMGM operates. As the MGC continues to monitor compliance across the industry, the outcomes of these audits and hearings will play a crucial role in shaping the future of sports betting in the state.
In summary, the recent audit of BetMGM has highlighted significant compliance challenges that the operator must address. With an upcoming hearing and ongoing scrutiny from regulators, the path forward for BetMGM will require careful navigation to restore confidence and ensure adherence to Massachusetts gaming regulations.