DraftKings Begins Suitability Hearings for Long-Term License

Massachusetts. The Massachusetts Gaming Commission (MGC) held an adjudicatory hearing, spanning more than five hours, to assess the operator’s qualifications for a permanent license. While much of the hearing was conducted in a closed executive session, the Investigations and Enforcement Bureau (IEB) publicly endorsed DraftKings’ approval, contingent upon several specific conditions.

Massachusetts Gaming Commission Chair Jordan Maynard acknowledged DraftKings’ impact in combating illegal gambling. “You provide a great service to the commonwealth of Massachusetts, which is keeping people from the illegal market,” Maynard stated during the public discussion.

Operating Temporarily Since Early 2023

DraftKings is among seven sports betting platforms currently operating in the state with a temporary Category 3 sports betting license. The operator secured its provisional license in February 2023 and launched operations on March 10, 2023, coinciding with its receipt of a certificate.

This adjudicatory hearing marks the next step in DraftKings’ journey toward securing a long-term license, with the IEB reporting both accomplishments and areas of concern during its investigation. Zachary Mercer, general counsel for the IEB, outlined the bureau’s conditional recommendation that DraftKings be granted the permanent license.

The IEB emphasized key compliance requirements before fully endorsing DraftKings’ long-term suitability. The operator must address several issues to meet licensing standards, including:

• Updating fingerprints for certain company s.
• Resolving a high-risk internal control deficiency identified during the investigation. This issue must be remedied within six months.
• Providing an update within a year on its suitability, including progress in managing civil litigation cases, regulatory infractions, and a formal plan to reduce the frequency of such violations.

Michael Banks, a civilian investigator for the IEB, noted that DraftKings has committed more than 50 regulatory violations across its licensed jurisdictions. However, he clarified that the operator remains in good standing in all states where it is authorized to operate.

Additional Deliberations and Next Steps

While the IEB’s initial review offered a conditional recommendation, MGC officials expressed their own concerns following the executive session discussions. Chair Maynard requested further analysis from RSM US, an audit and consulting firm, which is expected to address these issues within the next 60 days.

A follow-up session will be scheduled in February 2024, allowing the commission to determine if the company has adequately met all suitability requirements.

DraftKings’ detailed evaluation process may set a precedent for other temporary license holders in Massachusetts, including Bally Bet, BetMGM, Caesars Sportsbook, ESPN BET, Fanatics Sportsbook, and FanDuel. Like DraftKings, these operators must navigate a similar suitability review to transition from provisional to full licensure.

This comprehensive examination underscores the MGC’s commitment to maintaining stringent compliance standards while ing the expansion of regulated sports betting in the state.

Source:

”Massachusetts: DraftKings begins process to request full five-year sports betting license”, cdcgaming.com, December 20, 2024.