Massachusetts regulators issued a $20,000 penalty to Fanatics after determining the operator accepted wagers on a non-tournament Boston College football game, violating state law, according to State House News.
The Massachusetts Gaming Commission (MGC) voted on the fine Dec. 4 following a probe by its Investigations and Enforcement Bureau.
Key Takeaways
- The MGC fined Fanatics $20,000 for accepting 83 illegal wagers on a Boston College regular-season football game.
- This marks Fanatics' third fine in Massachusetts, bringing its total penalties in the state to $45,000.
- Commissioners expressed concern about recurring violations and questioned Fanatics' internal controls and employee oversight.
The activity involved 83 illegal wagers placed between Sept. 15 and Sept. 20 of last year on Boston College's matchup against Michigan State. This was a regular-season game that wasn't eligible for betting under Massachusetts rules.
The prohibited wagers generated a combined handle of $3,325, including straight bets and parlays.
Regulators stated losing wagers were voided and refunded, while winning bets were paid out.
According to commission documents, the incident stemmed from a manual override by a trading team employee who is no longer with the company. Fanatics informed regulators it has adopted a progressive discipline model to prevent similar issues from reoccurring.
The only commissioner who opposed the fine, Eileen O’Brien, argued the penalty was insufficient given the operator's two previous violations. She said the incremental increase of $5,000 per offense does not serve as an effective deterrent.
Commissioner Nakisha Skinner supported the fine but raised concerns about repeated errors tied to a single area of the operator's trading operations. She requested a follow-up report from Fanatics outlining how the company plans to address the issue.
The MGC has examined numerous matters of noncompliance involving illicit college betting within the state.
The MGC has reported $52.34 million in taxable sports betting gross gaming revenue for September, bringing the total to more than $339.15 million in taxes and assessments since Massachusetts sports betting launched in January 2023.
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Fanatics enters prediction market space
The regulatory scrutiny in Massachusetts arrives during Fanatics' increased focus on new betting products, including the launch of Fanatics Markets, a prediction market service.
The service will eventually be available in 24 states and feature tradable event contracts grouped under sports, finance, and cultural events. Initial launches began midweek in 10 states, followed by additional waves through Friday.
Fanatics stated the platform is designed to provide users with more ways to engage with major events. This includes expanded categories such as crypto, stocks, tech, and music, planned for early next year.
Industry interest in prediction markets has grown rapidly, with trading volume reaching nearly $28 billion in October. Major operators have responded by developing their own offerings, including DraftKings' acquisition of Railbird and FanDuel's upcoming launch of a CME Group-supported marketplace.
Crypto.com will supply pricing for Fanatics Markets, and users will access the platform through a shared wallet within the company's ecosystem. States entering the rollout later in the week include several large markets such as California, Texas, Florida, Georgia, and Washington.
