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The Pennsylvania Gaming Control Board approved a $100,000 fine against BetMGM on Wednesday after regulators determined the operator failed to prevent large-scale fraud tied to weaknesses in its Know Your Customer (KYC) controls.
The violations stem from multiple investigations that found bad actors were able to create and use thousands of fraudulent accounts on BetMGM Casino, BetMGM Sportsbook and Borgata Casino over several years.
Fraud rings exploited verification gaps
According to the consent agreement obtained by PlayPennsylvania, several fraud rings used stolen or falsified personal information to open accounts, often for the purpose of bonus abuse or using fraudulent payment methods.
One investigation uncovered a scheme involving 1,567 accounts created between December 2021 and January 2024, many of which were linked through shared devices, IP addresses, and financial instruments.
Those accounts deposited more than $13,700 and were issued over $200,000 in promotional play, ultimately generating nearly $188,000 in winnings and more than $128,000 in withdrawals.
A separate, larger case involved 2,700 accounts across BetMGM and Borgata platforms, with more than $2.1 million deposited and $1.5 million withdrawn.
In Pennsylvania alone, hundreds of those accounts were responsible for more than $356,000 in deposits and nearly $293,000 in withdrawals, with some accounts withdrawing funds without engaging in meaningful gameplay.
Warning signs went unchecked
Regulators found that many of the fraudulent accounts exhibited clear red flags that should have triggered intervention.
These included:
- Hundreds of accounts sharing phone numbers, IP addresses, or devices
- Financial instruments used across multiple accounts
- Accounts created using the identities of deceased individuals
- A high volume of transactions lacking proper address verification
Despite these indicators, the activity continued for extended periods.
PGCB: KYC controls were insufficient
The PGCB concluded that BetMGM failed to implement and enforce adequate KYC and fraud prevention measures, allowing the activity to occur.
Specifically, regulators said the operator’s deficiencies allowed:
- Accounts to be created using other individuals’ personal information
- Deposits using stolen or fraudulent payment methods
- Withdrawals to accounts controlled by fraud perpetrators
The consent agreement states that BetMGM did not fully utilize available tools and controls designed to verify identity and detect suspicious behavior.
BetMGM implements corrective measures
In response, BetMGM has taken steps to address the issues, including:
- Closing all identified fraudulent accounts
- Blocking associated devices and financial instruments
- Enhancing identity verification and fraud detection processes
The company is also required to immediately implement policies and procedures to prevent similar incidents moving forward, which has been marked as confidential in the consent agreement.
Joseph Caputi, Senior Legal Counsel, Regulatory at BetMGM, told the PGCB it it has a handle on the situation:
“We’re not sitting by and accepting what we have now. We’re always looking to improve and invest in our people, in our teams and in our products.
“We’re comfortable now, but we’re not sitting and waiting. We’re actively working to continue to improve. It’s an ongoing, everyday matter.”
BetMGM has developed an underage task force to detect underage gamblers from making accounts. In addition, the operator has also addressed offshore gamblers making Pennsylvania accounts.
BetMGM is also protecting new customers and existing ones by eliminating credit card deposits, starting on March 31.
First consent agreement of its kind for BetMGM
The case marks the first consent agreement of this nature for BetMGM in Pennsylvania since it was licensed in 2020.
Along with the $100,000 fine, BetMGM must also pay $2,500 in investigative costs tied to the case.
The enforcement action highlights PGCB’s continued focus on ensuring operators maintain strong safeguards around identity verification and fraud prevention, particularly as online gaming activity continues to grow in the state.
