Operator Faces $100K Fine for Weak Fraud Controls
BetMGM has become the latest online gaming operator to cease accepting credit card payments. This comes after a fraud-related settlement with the Pennsylvania Gaming Control Board (PGCB). The move follows a $100,000 fine imposed on the operator by the PGCB for insufficient identity verification measures and other procedures to prevent fraudulent activity.
Fraud Schemes Identified
The PGCB reported multiple cases of fraudulent activity over several years. In one instance, a single individual opened 119 accounts across BetMGM and Borgata and gambled nearly $900,000. Furthermore, between 2021 and 2024, a fraud ring created 1,567 accounts. They deposited over $13,000 using stolen payment methods and withdrew more than $28,000.
Trend Away From Credit Cards
BetMGM joins other major operators moving away from credit card transactions. Earlier this year, FanDuel stopped accepting credit cards after Senator Elizabeth Warren highlighted that nearly 25% of bettors used credit cards. These bettors often incurred fees up to 50% of their original wagers. Similarly, DraftKings ended credit card payments last year, citing high fees. However, it was fined $450,000 by the Massachusetts Gaming Commission for a regulatory misunderstanding.
Regulatory Landscape
Online sports betting is legal in 32 U.S. states, with Massachusetts and seven others already prohibiting credit card use for wagering. Recently, Maine lawmakers approved legislation banning credit card funding for online betting. They also required operators to update all payment systems—including apps, websites, and kiosks—to automatically block such transactions.
Industry Implications
The move by BetMGM underscores a growing industry shift toward safer, lower-risk payment methods and stronger fraud controls. Operators are increasingly relying on digital wallets and other alternative payment solutions to protect customers. This also helps them comply with evolving state regulations.
