Monarch Casino & Resort has hired GeoComply as its geolocation service provider after being fined $400,000 by the Colorado Limited Gaming Commission (CLGC) for proxy betting by three employees.
The Nevada-based company, which self-reported the issue, said it discovered that three staff members at Black Hawk Casino were placing sports bets for out-of-state customers. Proxy betting is prohibited in Colorado, but is not strictly illegal in many locales.
The commission’s investigation found last June that the staff members made a total of 79 proxy wagers, amounting to nearly $61,000, for 11 different customers between January 2021 and June 2022. Most of those bets were placed through the BetMonarch mobile app, with the remaining 19 placed at the casino’s sportsbook. Sixty of the bets were placed by then-sportsbook manager Nicholas Epstein, who accessed the customers’ accounts via the app.
Monarch said Epstein and fellow sportsbook employees Brian Lopez and Ted Kilgore were suspended and later fired after the company found the evidence of proxy betting.
Fine among the largest in state history
Monarch’s fine is the biggest penalty ever imposed on a casino operator in Colorado, but falls short of the $500,000 slot developer Aristocrat Technologies was fined in 1997 for deliberately misrepresenting the value of its machines in order to pay less in taxes.
After discovering the proxy betting, Monarch alerted Stadium Technology Group, its tech partner, which elected to hire GeoComply rather than handle its geolocation services internally.
“The issues highlighted at today’s commission meeting underscore that operators must thoroughly consider and address all the critical compliance risks associated with running a regulated online sportsbook,” GeoComply Senior Vice President of Compliance Lindsay Sadler said in a statement. “GeoComply is pleased to now work with BetMonarch and act as its geolocation service provider.”
Canadian-based GeoComply offers geolocation, fraud prevention, and cybersecurity to companies in the entertainment, financial and gambling industries.
“Our anti-fraud tools are purpose-built to analyze data in real time and stop suspected proxy betting and other fraud,” Slater added.
The CLGC levied $5,000 for each of the proxy bets placed and an additional $5,000 for other violations it uncovered. Monarch must pay half the fine within 10 days of the ruling, and the rest is due within two years.
Last March, New Jersey regulators fined DraftKings $150,000 after their investigation found that a proxy placed a series of bets there for a bettor based in Florida, where sports betting is not legal.