Sports Betting Alliance Fined by Maryland Election Regulators
Sportsbook trade group the Sports Betting Alliance, or SBA, has been fined $48,000 this week by the Maryland State Board of Elections.
The fine relates to the SBA’S late filing of fundraising activities during the state’s 2020 referendum on sports betting. As per the Maryland constitution, state residents got the chance to vote on legal sports betting, and the SBA was part of the campaign for a “Yes” vote.
The SBA filed its expenditures for that period 48 days after the 48-hour deadline expired. That late payment came up in a recent audit from the Elections Board, which is run on a four-year cycle. The Board imposed a $1,000 fine for each day of late payment, resulting in the $48,000 total.
That makes it the biggest fine in Maryland electoral history.
“This was simply a filing error by our compliance team,” an SBA spokesperson told Maryland Matters. “As soon as we realized the mistake, we immediately filed the missing form and worked with the Maryland State Board of Elections to correct the error.”
The SBA represents three of the US’ biggest national sports books, BetMGM, DraftKings, and FanDuel, as well as up-and-coming operator Fanatics.
Cracking Down Hard
The SBA wasn’t the only business fined by the Board of Elections after it completed the audit. But it was certainly the recipient of the biggest individual penalty.
28 organizations were fined a total of $74,900. Of those, 90% were for failures to report expenditures. Under Maryland law, any political spend of more than $10,000 must be declared to regulators within 48 hours.
Failure to do so can result in whichever is greater out of a $1,000 a day fine, as in this case, or 10% of the total spend on state activities.
“We’re cracking down hard on disclosure with independent expenditure entities,” said Jared DeMarinis, director of candidacy and campaign finance at the Board of Elections. “That was the biggest one that was collected so far.”
DeMarinis said that fines are justified because it is in the public interest to have swift declarations of financial backing revealed before any vote.
“They usually come in the last possible second and do some political ads or disseminate campaign material that could possibly affect the election,” he said. “You need to have very timely disclosure to ensure that individuals are making informed choices at the ballot box.”
In that 2020 referendum, Marylanders voted 67% in favor of amending the state constitution to allow legal sports betting. It took lawmakers until April 2021 to figure out the specifics before House Bill 940 passed both legislative chambers. The very next month, Governor Larry Hogan signed legal sports betting into law.
Fast forward two years, and the four members of the Sports Betting Association are legally operating online sportsbooks in Maryland. The last of the four was Fanatics, who launched early in June 2023.
The Board of Elections did not reveal how much the SBA spent during its campaign for legal sports betting. It included TV, radio, and online ads in support of the “Vote Yes on Question 2” campaign, as well as contributions to politicians who backed the bill.
However, given the 10% or $1,000 a day rule, it can safely be assumed that the total spend was less than $480,000.
The SBA’s fine wasn’t the only online gambling controversy to recently hit Maryland. Earlier this month, online detectives discovered that nearly 800,000 state issued vehicle license plates featured a link that went to a Philippines based online casino site. State officials rushed to rectify the embarrassing error, which has now been fixed.