Mass. Regulators Probe Alleged Credit Card Use In Sports Wagers

Massachusetts gaming regulators are investigating Caesars Sportsbook over a self-reported incident that one state official said could represent an “extremely serious” violation of the state law prohibiting use of credit cards for wagering.

The Massachusetts Gaming Commission decided at a Dec. 18 meeting to move ahead with an adjudicatory hearing surrounding Caesars’ alleged acceptance of credit card wagers.

Between Oct. 15 and Oct. 28, Caesars allegedly accepted 88 wagers funded by credit cards from 35 bettors for a total handle of $1,256, according to Zachary Mercer, the commission’s senior enforcement counsel.

Bettors made deposits into their accounts while located in places where credit card bets are allowed, and returned to Massachusetts with the funds in their accounts.

The Gaming Commission has called the prohibition of credit card usage in sports betting “a fundamental tenet of the passage of the sports wagering law” that the Legislature and Gov. Charlie Baker agreed to in 2022.

The issue was the result of an “internal configuration error” on Caesars’ platform, which the operator discovered and self-reported on Oct. 28, Mercer said.

That same day, Caesars disabled wagering in Massachusetts until it implemented a remedy.

Commissioner Nakisha Skinner asked Mercer about the configuration error.

“Do you have any more detail as to the nature of that, because this is a small period of time, relatively small period of time, and that suggests that at one point the configuration was correct and then something happened. Do we have any information as to what that was?” Skinner said.

Mercer said initial reporting from Caesars showed there was a software update involving its player account management and that led to an error in the “filtering of funds.” Mercer said he could get more details on the issue from Caesars with a further investigation.

Skinner asked how sure Caesars is that the time frame Mercer gave in October is the extent of the period of noncompliance.

Mercer said Caesars reported they are “confident” the remedy they implemented was successful and that he couldn’t speak to anything that happened before Oct. 15.

Commissioner Paul Brodeur said the alleged violation was an “extremely serious matter” and something the commission takes “very seriously.”

Caesars did not respond to State House News Service’s request for comment on the matter.

The commission’s chairperson, Jordan Maynard, said the panel has levied the harshest penalty in the United States on an operator for the same issue.

“I’m not going to connect the two issues, but that operator went on to nationally get rid of credit cards off their platform,” Maynard said. “If that doesn’t show you how impactful that the Commission can be when it needs to be.”

In July, the commission fined DraftKings $450,000 for accepting credit card wagers over the course of almost a year. This was the largest fine imposed on a sports betting company since the industry launched in 2023.

The commission issued the penalty after holding multiple adjudicatory hearings. In August, DraftKings banned credit card deposits to its sports betting and online casino platform nationwide, as reported by SBC Americas.

When handling instances of alleged noncompliance, the commission has three options: hold an adjudicatory hearing overseen by commissioners, refer the matter to the commission’s Investigations and Enforcement Bureau to investigate and offer recommendations, or issue a civil administrative penalty.

As of Dec. 12, the commission has dealt with 12 instances of alleged noncompliance this year and held adjudicatory hearings for three of them, according to the commission’s website. Eleven of the incidents involved sports wagering and three of the adjudicatory hearings were for sports wagering.

Commissioners were torn over whether to hold an adjudicatory hearing on the Caesars matter or refer the matter to the Investigations and Enforcement Bureau.

Commissioner Bradford Hill noted he usually opts to send noncompliance issues back to the IEB to investigate. But this issue stuck out as a red flag for him and he wanted an adjudicatory hearing.

“It’s the severity of the credit card. This is something that this commission, since day one, has cared a lot about,” Hill said.

The Caesars adjudicatory hearing has not been scheduled, Thomas Mills, a commission spokesperson, said.