The Colorado Limited Gaming Control Commission on Thursday approved a $130,000 fine agreed to between the state’s Division of Gaming and payment processing provider WorldPay stemming from the company’s operating without a license during 13 days in April.
According to the agreement, WorldPay processed more than $9.8 million in transactions from April 3-15 for online sportsbooks in Colorado, which resulted in an estimated $14,737.21 in fees.
The agreement document states the Division of Gaming reached out to WorldPay in October, January, and February to inform the company that its vendor license would expire April 2 and it would need to reapply, but the regulator received no response. By April 12, the Division of Gaming and WorldPay had “corresponded,” but the company “did not initiate any procedures to cease its operations that required licensure by the commission,” according to the agreement.
On April 13, the Division of Gaming issued a notice to sports betting operators that WorldPay was not licensed and “any operators using [WorldPay] for processing sports betting transactions were … in violation of Colorado state law.” WorldPay filed a vendor application the same day. On April 15, WorldPay ceased operations in Colorado, and the commission approved its license application request April 21.
Details of sanctions
The $130,000 fine was based on $10,000 per day of violation, but only $65,000 is due within 10 days of the LGCC’s signoff on the agreement. The other $65,000 will be held “in abeyance” for two years and will be paid if WorldPay is found to be in violation of Colorado law during that time. The agreement also requires WorldPay to audit its “internal licensing protocols” and submit a plan to the Division of Gaming to prevent future issues.
Joseph Watkins, a representative for WorldPay who participated in the LGCC meeting Thursday, said the company “wanted to make clear to these licensees that are doing legal activities in the state of Colorado that we were not supporting illegal operations in Colorado, but that we had failed to renew our license in a timely manner, and therefore could not continue to operate.”
LGCC Chairman Richard Nathan pushed back on that characterization.
“This commission is charged … with maintaining public confidence and trust in sports betting, by strict regulation,” Nathan said. “Therefore, when someone operates without a license, we have an obligation … to act. And that operation is a violation of law.
“Contrary to the statement that there is no accusation of wrongdoing … you were knowingly operating during several days without a license and are now conceding that, admitting to wrongdoing, and admitting to violations of Colorado law. … I just wanted to make clear to you that this is not a mere administrative matter.
“It is a matter we take seriously. Otherwise, you wouldn’t have been in the discussions you were in with the attorney general’s office and the staff of the [Division of Gaming] that gave rise to this stipulation.”
After some more discussion, Watkins said, “You have my commitment this will never happen again.”