Colorado Authority Files Allegations Against British Firm for Unauthorized Operations
Heads Up: Unlicensed Sports Betting Fiasco Leaves U.K. Firm in Hot Water
Thing didn't go as planned for Online Track Limited, a Yarnfield, England-based company hankering for a piece of the Colorado sports betting pie. On Thursday, the Colorado Limited Gaming Commission gave them a cold shoulder, denying their sports betting license application after an undercover sting operation exposed some fishy dealings.
The drama unfolded when the company submitted their vendor minor license application on February 25. Fast forward to July, and our investigator from the state's Division of Revenue paid a little visit to Online Track Limited's website, bparlay.com. They found the site was actively throwing its customers to mobile sportsbook operators like DraftKings, Caesars Sportsbook, and BetMGM. All of them had already cut ties with Online Track, the sneaky serpents.
When the state's Department of Revenue reached out, the sportsbook operators dropped Online Track like a hot potato. On July 20, the Department sent Gavin Walters, the company's representative, a warning email, giving them eight days to respond to the allegations. Sadly, they didn't budge, leaving the commission high and dry.
"The Division never received a responsive email or phone call from Applicant," according to the rejection notice issued at the commission meeting.
On Thursday, bparlay.com seemed to have cleaned up its act, with no signs of directing customers to sportsbooks in Colorado.
A Storm Brewing on the Horizon
Commissioner Richard Nathan hinted at potential criminal charges, suggesting the agency might kick things upstairs to the state attorney general's office. Fellow commissioner Patricia Landaveri questioned whether the company could face fines or other consequences from the commission. Assistant Attorney General Torrey Sampson conceded it was a tricky situation, as the commission hadn't any jurisdiction over the company, seeing as they hadn't snagged that license yet.
Dan Hartman, Colorado's gaming honcho, admitted that the division had sent cease-and-desist letters to offshore operators in the past. However, this was the first time they'd run into a company advertising their betting services without first securing a license – talk about poor sportsmanship! Colorado launched mobile sports betting in May 2020.
Colorado Assistant Attorney General Broderick Jones confirmed that Online Track Limited's dodgy activities had been on their radar for quite some time. Commissioner Nathan suggested further discussions about potential next steps could happen at the next public meeting, scheduled for December 15.
So, What Went Wrong?
Based on typical reasons for license refusals, Online Track Limited likely tripped over regulatory compliance issues or operational pitfalls. Common regulatory woes include insufficient financial resources, opaque ownership or governance, failure to meet technical or regulatory standards, inadequate anti-money laundering policies, or unresolved legal and regulatory baggage[1]. Regardless of the specific issues, it seems Online Track Limited will need to shape up if they want a shot at Colorado's sports betting market.
[1] Online gambling regulations and license issuance criteria, GamblingCommission.gov.uk, 2021.
- The financial sector, including banking-and-insurance and fintech, might have to scrutinize their partnerships with sports betting companies more closely, as unlicensed sports betting activities can lead to legal issues, as demonstrated by Online Track Limited's experience.
- Unqualified companies entering the sports betting industry, like Online Track Limited, may face consequences beyond just license denials if they flout regulations, as seen by the potential for criminal charges and investigation by the state attorney general's office.
- The sports betting industry, particularly companies involved in sports-betting affiliate programs, should prioritize regulatory compliance and transparency to avoid facing issues similar to those experienced by Online Track Limited and maintain a good reputation.
- In light of the recent scandal surrounding unlicensed sports betting, the banking-and-insurance and fintech sectors should be on alert as they may inadvertently facilitate transactions with companies like Online Track Limited, potentially violating anti-money laundering regulations or other industry standards.
