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Read Full BioMassachusetts’ gaming regulator has fined Fanatics $20,000 for accepting bets on college sports in the state, which is prohibited.
The Massachusetts Gaming Commission found that Fanatics accepted 83 bets on a Boston College vs. Michigan State NCAA football game on Sept. 21, 2024, for a total handle of $3,325.88.
Fanatics said that it voided losing wagers on the game and paid out those that won.
Massachusetts sports betting law prohibits bets on in-state colleges or universities unless the program is playing in a national tournament.
The Commission voted 4-1 in favor of the fine, with Commissioner Eileen O’Brien voting against the penalty as she wanted a harsher punishment.
This is the third time the sportsbook has been penalized for accepting prohibited bets. O’Brien commented, “As a general matter, I’m not satisfied with the fine. I think only going up $5,000 each time they do this is not much of a deterrent on the operator.”
She added, “Compared with the revenue they make, I’m not so sure that’s the relevant metric for deterrent.”
Violation Attributed to Rogue Trader
Fanatics attributed the violation to one member of its trading team who overrode a limit for the game, allowing the illegal bets to be accepted by the online platform. The employee has since been let go from the company.
Commissioner Nakisha Skinner raised concerns that a single employee could cause the violation and worried about potential recurrences.
“I don’t see anything in the remedial measures that address how the operator will eliminate the ability of a single individual to make determinations that are incorrect or not aligned with what is permissible in Massachusetts,” she said.
Fanatics Markets to Offer College Bets
The fine comes in the same week that Fanatics launched its own prediction market platform, Fanatics Markets. The new platform has gone live in 24 states, but does not include Massachusetts or other states where the company holds a sports betting license.
The MGC wrote a letter to licensed betting companies, including Fanatics, last month, warning them that they are prohibited from offering prediction markets in the state.
The letter, however, did not address sports-related event contracts offered outside of Massachusetts or event contracts in general, although the Commission stated that it reserves the right to address those topics in the future.
Several other licensed betting companies are launching their own prediction markets, which do not have the same level of regulations. FanDuel and DraftKings are set to launch their platforms this month, and in preparation gave up their betting licenses in Nevada.
Nevada, like Massachusetts, issued sportsbooks a warning about entering into prediction markets. In total, seven states have sent warnings, with Maryland the latest.
The Commodity Futures Trading Commission (CFTC) has taken a hands-off approach to regulating the industry, which makes it appealing to companies accustomed to being reprimanded by state gambling regulators.
