Massachusetts’ DraftKings Tennis Bets Discussed with Regulators

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DraftKings, the Boston-based sports betting operator, sent representatives on Monday to speak with the Massachusetts Gaming Commission (MGC). The reason was to discuss allegations of noncompliance with the state’s legal sports betting catalog.

The issue at hand involves hundreds of bets placed on Universal Tennis Ranking (UTR) tennis events, despite the MGC not authorizing the market in the state. The situation could potentially lead to significant penalties for the company.

The Massachusetts sports betting regulator is not afraid to make big calls, including chastising national operators based in its home state.

Miscommunication or Misstep

In March, DraftKings reported to the MGC that it had inadvertently accepted 864 wagers, totaling $7,867, on UTR Pro Tennis Tour events.

The problem? These events were not included in the authorized Massachusetts sports betting menu, making the acceptance of these wagers a violation of state regulations.

DraftKings attributes this oversight to a “miscommunication” between its trading and trading compliance teams. The company explained that its traders had copied the list of tennis events from another state’s offerings without verifying their compliance with Massachusetts’ regulations.

The operator’s representative, Jake List, senior director of regulatory operations at DraftKings, spoke at length to regulators. He emphasized that the company took the issue very seriously and had made efforts to rectify the mistake.

That included refunding the bettors and immediately ceasing to offer bets on the market when the issue was discovered.

However, much of the rest of the discussion was held behind closed doors, as DraftKings requested confidentiality.  

“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 List.

“So that was the reason for requesting the closed session and the general summary already provided.”

Awaiting the Commission’s Decision

The MGC held an adjudicatory hearing on the matter. But the commission has yet to decide on the appropriate course of action.

The potential penalties could range from fines to more severe sanctions, depending on the commission’s final ruling.

Despite the ongoing investigation, DraftKings continues to lead in terms of handle and revenue in Massachusetts.

The MGC reported that DraftKings handled about $159.4 million in online wagers in Massachusetts during June, and generated $15.5 million in revenue. That was enough to keep it well ahead of FanDuel for the month as the leading operator among the state’s eight online sportsbooks.

Regulator’s Hard Line

The MGC has a history of taking a hard stance on similar offenses, and it has been busy introducing new rules in recent months.

However, DraftKings maintains that it has an immaculate track record with other states, and would never knowingly or purposefully commit such a mistake.

The regulator also recently rejected DraftKings’ proposal to offer betting on the controversial Saudi Arabian-backed LIV golf league, despite it being legal to bet on in other markets.

This all comes despite ongoing change of the top of the MGC. Earlier this month, it appointed Todd Grossman as interim executive director after the departure on July 14 of Karen Wells.

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