Editorial: High stakes

Legal sports betting went live in Massachusetts on Jan. 31. By Valentine’s Day, all three of the state’s casinos admitted to accepting bets on Massachusetts college teams — all in violation of the new law, which prohibits bets on Massachusetts schools unless that college happens to be playing in a tournament of four or more teams.

Now it’s up to the Massachusetts Gaming Commission to decide what to do about the violations. Potential penalties will be discussed at three separate adjudicatory hearings, which are in the process of being set up, according to commission spokesman Thomas Mills. The law authorizes the commission to impose fines but does not prescribe the amount.

For state regulators, this is an early defining moment in the college sports betting business. Are they going to regulate or look the other way? “I would call this the ‘slippery slope’ for the gambling issue,” said the Rev. Richard McGowan, who teaches finance at Boston College and has written several books on the gambling industry. “Once you allow even small violations, then the enforcement of any of the regulations becomes useless.”

And the ban on local bets was not some mere footnote in the law — it was an important measure to protect student-athletes who may be especially vulnerable to corruption.

For the most part, the commission members seem to recognize the stakes, and that’s why they opted for adjudicatory hearings, to allow commission investigators and casino operators to present evidence directly to them rather than utilize other review processes available to them under the law. “This is an important first decision-making point on these matters. I think we recognized that we would probably have, almost immediately, issues with respect to non-compliance, given this industry,” Commission Chair Cathy Judd-Stein said during a recent meeting at which illegal bets at two of the casinos were discussed at length. Yet, Commissioner Nakisha Skinner also mused that the illegal bets appear to be “relatively routine matters. I don’t know if it’s an efficient use of commissioners’ time to review each and every incident at an adjudicatory hearing in the first instance.”

However, holding an adjudicatory hearing sends a strong message to the industry that even though the casino operators self-reported the illegal bets, this is no small matter.

As summarized by boston.com, Plainridge Park Casino took bets on Feb. 2 from 11 a.m. until about 6:20 p.m. on a Merrimack College women’s basketball home game against Long Island University. Thirty-three bets were placed, mostly at the casino’s kiosks. Four wagers were made at the betting counter with a “writer” or teller. Investigators said the violation occurred because the sportsbook vendor mistakenly listed Merrimack’s location as Florida instead of Massachusetts. A teller notified the casino which then reported it to the commission. Plainridge executives told the commission that all unapproved schools have now been removed from the vendor’s system.

On Feb. 2, Encore Boston Harbor also took bets from 12:45 p.m. until about 5:45 p.m. on a Boston College women’s basketball game against the University of Notre Dame. In this case, the wager happened because the BC team had been mistakenly left off the prohibited list. At the Springfield MGM casino, illegal bets were accepted on two Harvard University men’s basketball games — one against Yale University on Feb. 3 and one against Brown University on Feb. 4. In that case, Harvard was incorrectly listed as a Connecticut institution.

During the meeting at which the illegal bets were discussed, chief enforcement counsel Heather Hall reported fines ranging from $5,000 to $50,000 in other jurisdictions that have dealt with unauthorized collegiate team wagers. Whatever the decision in these Massachusetts cases, it would be good to reach it as soon as possible, especially since the state is moving forward with the planned launch of mobile sports betting on March 10. However, according to Mills, the adjudicatory hearings can’t be scheduled before the mobile sports betting kickoff because of public notice requirements.

Banning bets on most Massachusetts college sporting events was part of a last-ditch effort to legalize sports betting in this state. The Senate wanted to ban all college sports betting and the House wanted to make it all legal. Now, the gaming commission must enforce the last-minute compromise that allowed sports betting to go forward. State Senator Cynthia Creem, who was one of a handful of lawmakers who opposed the sports betting bill, said she now expects the commission “to do its job, whether it’s fines or something to make sure (the illegal betting) doesn’t happen again.”

The law, and especially the loophole related to tournaments, is admittedly complicated. But that’s ultimately a problem for the operators to figure out. It’s not some big secret where Harvard and Merrimack are located, and if the casinos’ technology isn’t good enough to handle the restrictions imposed by the Legislature, those deep-pocketed companies will just have to catch up.