Massachusetts’ gaming market purification is still in progress after its attorney general sent two sportsbook operators cease-and-desist orders.
AG Andrea Campbell’s office sent the notes to BetOnline.ag and SportsBetting.ag, telling the companies they needed to stop all in-state transactions.
Key takeaways
- The orders went to two Panama-headquartered businesses.
- State regulators found success using cease-and-desists to shut down offshore operators.
- Massachusetts is also discussing online casino legalization.
The state regulator noted in its letter to the companies it became aware the operators currently or recently offered “unlicensed online gambling and betting products” in Massachusetts, one of 38 states that license sports betting operators.
“It is illegal in Massachusetts to engage in commercial gambling except where expressly authorized by the Commonwealth,” the letter read. “[Massachusetts] prohibits engagement in ‘any activity in connection with sports wagering in the Commonwealth unless all required licenses have been obtained.’”
The letter also accused the operators of trying to trick bettors by displaying images of U.S.-based teams and athletes to portray themselves as American sportsbooks.
However, both entities are headquartered in Panama City, Panama, and didn't receive approval to operate in Massachusetts.
BetOnline.ag and SportsBetting.ag were informed they'd face “injunctive relief, restitution, civil penalties up to $5,000 per violation, and the costs of the investigation and litigation” if they didn't immediately cease operations.
Are cease-and-desists still viable?
Massachusetts is one of several states that found success using cease-and-desist orders to cleanse their gaming markets. Illegal online gambling is a major issue in the era of gaming expansion and served as a motivator for states without legal betting markets, since they could only control the black market if they first had a legal market.
Cease-and-desist orders are formal requests that demand recipients stop all illegal activity or face a variety of possible punishments.
As effective as this is for regulators, New Jersey recently tested its power. Trading platform Kalshi won a preliminary restraining order and a temporary injunction against the New Jersey Division of Gaming Enforcement in April, which issued Kalshi and Robinhood cease-and-desist orders in March.
The likelihood of an offshore unlicensed sports betting operator finding the same success is very low. Even if Kalshi is forced to shut down its prediction markets, its status as a federally-regulated entity in compliance with its current regulations gives it more standing than sportsbook companies without any official ties to America.
Massachusetts looking to expand its gaming market?
Massachusetts finished 2024 with the eighth-highest sports betting handle of any state with $7.4 billion in accepted wagers, a massive 48.4% year-over-year increase.
State legislators are also discussing the merits of online casino legalization. The Joint Committee on Consumer Protection and Professional Licensure met Monday to discuss two proposals, Senate Bill 235 and House Bill 332, which would create the country’s eighth legal iGaming market.
The bills were only discussed and didn't stand for a vote. DraftKings' Government Affairs Manager David Prestwood estimated legalization would create another $275 million in annual tax revenue.
