Massachusetts regulators will deliberate possible penalties for DraftKings Inc. after the Boston-based operator of sports betting sites said it mistakenly took hundreds of bets on unauthorized tennis events.
The Massachusetts Gaming Commission (MGC) met Monday for an adjudicatory hearing regarding the alleged noncompliance of DraftKings with the Bay State’s legal sports betting catalog.
In short, DraftKings told the MGC in March that it had taken 864 wagers and $7,867 in total action on UTR Pro Tennis Tour events, which were not included on the authorized Massachusetts sports betting menu.
DraftKings chalked up the error to a "miscommunication" between its trading and trading compliance teams, the MGC heard, as the traders copied tennis offerings from another state without verifying they were OK with the compliance officers.
It's complicated?
The UTR-connected wagers were voided, with winners having their winnings confiscated and stakes returned, and losers getting refunds as well. DraftKings also removed the UTR markets, required all new markets to be run by the compliance team first, and reported itself to the MGC on March 23, which led to Monday's hearing.
A representative for DraftKings said while the above mistake may sound straightforward, a lot of communication and detail goes into the bookmaker’s processes that go beyond straight compliance with state regulations. That was why DraftKings sought, successfully, to have part of Monday’s hearing conducted in private, beyond the view of the public.
“Some of it is competitive in nature and also potentially enables customers to more easily exploit us if talked about in the public forum,” said Jake List, senior director of regulatory operations at DraftKings. “So that was the reason for requesting the closed session and the general summary already provided.”
The Massachusetts Gaming Commission is getting its week started with an adjudicatory hearing regarding the alleged noncompliance of DraftKings with the state's sports-betting catalog. The MGC heard in May that DK took wagers on unapproved tennis events:https://t.co/zJbeVduf0v pic.twitter.com/Avnbd0BlNX
— Geoff Zochodne (@GeoffZochodne) July 24, 2023
The commission did not decide what to do with DraftKings on Monday, and a written ruling will follow later. The MGC could penalize DraftKings for its tennis-related failings, such as fining the Boston-based bookmaker. Several similar issues arose in the early days of legal sports wagering in Massachusetts at the state's casinos.
In the meantime, DraftKings has been using its home-field advantage in Massachusetts to lead operators in terms of handle and revenue. The MGC reported DraftKings handled about $159.4 million in online wagers in the state during June and generated $15.5 million in revenue, both of which were the most by any of the commonwealth's eight online sportsbooks for the month.
A few misplaced tennis wagers seem unlikely to knock DraftKings off its perch, as the company stressed to the MGC, in public and (presumably) private, that it tried to address and fix its mistake sufficiently.
“This is an issue that we did take very seriously,” List told the commission.
