BetMGM, one of the new Maryland sports betting apps, agreed to pay a $146,000 fine for taking wagers before they were officially authorized to do so — the largest fine ever levied by gaming regulators.
BetMGM accepted 146 live sports bets during a three-hour window on Nov. 16, one full week before the app was approved to go live, according to a consent agreement between BetMGM and the Maryland Lottery and Gaming Control Commission that was approved Thursday.
BetMGM is one of seven mobile sports betting apps that launched in Maryland on Nov. 23, the day before Thanksgiving. Additional licenses have been awarded to other companies that have not yet launched their apps.
Rhea Loney, BetMGM’s chief compliance officer, told lottery commission members during a video meeting that there was an error in the app during a pre-launch testing period that allowed gamblers to get into the company’s sportsbook after registering, instead of sending them to a page advertising that betting would be coming soon.
Loney said as soon as the company was alerted to the problem, they were able to stop it and launched an investigation. The company cooperated with Maryland regulators, Loney said.
The bets were canceled and the money was returned to the gamblers’ accounts, according to John Mooney, the state lottery agency’s chief regulator.
“This appears to be an inadvertent mistake and it’s also the largest penalty we’ve issued to anyone,” said Randy Marriner, chairman of the commission. Until now, the commission had never issued a fine greater than $5,000.
All but one of the state’s lottery commissioners voted to approve the fine and consent agreement. Commission member Harold Hodges questioned whether the fine was large enough, and sought to have the vote delayed for further investigation.
“Even though it may be the largest penalty ... I see that as no more powerful than a slap on the hand or wrist, frankly,” Hodges said.
Mobile sports gambling proved immediately popular in Maryland. In the first eight days the apps were operational, gamblers placed wagers worth over $186 million; of that, $60 million came from free play promotional offers, according to state reports.
Six of the seven apps lost money in those first days, due largely to the generous promotions.
The amount of money spent on mobile sports gambling in a little more than a week dwarfed the $33 million that bettors gambled at brick-and-mortar sports betting locations throughout the course of the entire month.