Pennsylvania regulator fines BetMGM over weak fraud detection controls

Pennsylvania gaming regulators have levied a $100,000 fine against BetMGM after concluding the company did not have strong enough safeguards in place to prevent fraud on its online betting platforms.

The penalty was approved during the board’s public meeting on March 25 and stems from a consent agreement negotiated with the agency’s Office of Enforcement Counsel following an investigation into BetMGM’s account monitoring and identity verification practices.

Fraud rings exploited gaps in identity checks

According to regulators, BetMGM’s systems were not strong enough to stop users from opening and operating multiple accounts using stolen or improperly used personal information. Officials pointed to shortcomings in the operator’s Know-Your-Customer (KYC) procedures, which are meant to verify a bettor’s identity before they can place wagers.

Investigators said four separate fraud rings exploited those weaknesses over periods ranging from 19 to 34 months. Over that time, the groups created hundreds of accounts using other people’s identifying details and funded them with fraudulently obtained payment methods.

• operated for approximately 25 months until January 2024 with 1,567 accounts created using personal identifying information of other individuals and $229,580 of combined wagering;
• operated for approximately 34 months until November 2024 with 34 accounts created using personal identifying information of other individuals and over $14,598 of combined wagering;
• operated for approximately 29 months until November 2023 with 119 accounts created using personal identifying information of other individuals and $895,092 of combined wagering
• operated for approximately 19 months until December 2023 with 304 accounts created using personal identifying information of other individuals and $867,910 of combined wagering

Regulators said the scale and duration of the activity showed that BetMGM’s controls were not sufficient to detect or stop the misuse of customer information and payment instruments, both of which are core compliance requirements for licensed online gaming operators in the state.

Exclusion list grows as enforcement continues

Alongside the fine, the board also added 16 individuals to its involuntary exclusion lists, which bar people from gambling at Pennsylvania’s casinos, online platforms, and video gaming terminals located at approved truck stops.

Four of those cases involved adults who left minors unattended while they gambled. In one incident, a person left an 11-year-old in a vehicle for 52 minutes at Hollywood Casino York. In another case, a 9-year-old was left alone in a parking lot at Rivers Casino Philadelphia for more than an hour.

With the latest additions, the number of people on Pennsylvania’s exclusion lists has risen to 1,515, reflecting regulators’ increasing use of the measure as both a consumer-protection tool and a deterrent.

Part of a broader compliance crackdown

The action against BetMGM comes amid heightened scrutiny of compliance controls across the U.S. sports betting industry. Regulators in Massachusetts, for example, have recently issued tens of thousands of dollars in combined fines to several sportsbooks for violations related to prohibited betting activity and reporting failures.

At the same time, MGM Resorts International and BetMGM have continued expanding their responsible gaming initiatives, directing additional funding toward research, education, and player-protection tools. Regulators have repeatedly said those programs are important, but cases like the Pennsylvania fraud investigation show that day-to-day operational controls and technical safeguards remain a central focus of enforcement.

Next regulatory meeting set for April

The Pennsylvania Gaming Control Board is scheduled to hold its next public meeting on April 29 in Harrisburg, where further enforcement actions and regulatory matters are expected to be reviewed.

Featured image: Cicku, CC BY 4.0 https://creativecommons.org/licenses/by/4.0, via Wikimedia Commons

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