Developing Massachusetts Is Calling FanDuel, Not Just Bill Simmons, to Answer for 22 Proxy Bets. The Hard Part Is What FanDuel Could Have Seen.

Editor's note: TrueEdge builds odds tools and earns affiliate commissions from licensed sportsbooks, which may include operators named here. This piece argues about how a regulator should use its powers. Weigh the conflict.

The Massachusetts Gaming Commission voted unanimously on Thursday to hold an adjudicatory hearing on FanDuel over 22 proxy bets totaling $21,800, placed on Bill Simmons' account on August 5, 7 and 19. No date is set. All the bets have been voided.

Commission Chair Jordan Maynard said what the hearing is for: "I'm more interested in how the operator let something like this happen and the actions they took after it was public."

It is the right question, and we doubt it has the answer he implies. By Simmons' own account, this proxy passed every control a sportsbook app has, because every control saw what it was built to see. Massachusetts should hold this hearing for what the state can learn about the word "prevent," rather than for what FanDuel did in August.

How the bets got through

Simmons, a California resident with a Massachusetts FanDuel account, explained it on his podcast on August 30. "I let Hank log into my FanDuel as me, [sent] the code to make sure it's me to my phone, I give him the code, he logs in." Hank is his daughter's boyfriend, 21 years old according to InGame. The enforcement memo, as quoted by Covers, describes wagers placed through an acquaintance "physically present" in Massachusetts. SportsBettingDime describes them as futures.

Walk through what the app could know. The password was right. The second-factor code was right, and it had gone to the registered phone. The bettor's device was inside the state, so geolocation passed, which is the opposite of the usual problem. Massachusetts' statute requires operators to "prevent persons from placing wagers as agents or proxies for others," and 205 CMR 248 treats anyone doing it as a "prohibited person" whose wagers must be cancelled and confiscated. But two-factor authentication proves possession of a code, and Simmons handed the code over.

There may be more. If Hank's device was new to the account, a login from it, on an account belonging to a California resident, is in principle the sort of pattern a risk team could flag. We do not know that it was new. FanDuel is also a longstanding Ringer partner, according to Awful Announcing, so this was not an unknown customer. Whether anyone at FanDuel saw this before August 30, we do not know, and the coverage we read does not say. That is the single fact that would turn this into a real case against the operator, and the hearing is where to ask for it.

What FanDuel did afterward

The record is better here. According to InGame, FanDuel reported the violation to the commission the day after the podcast, voided the bets and took action on the account. "We became aware of the issue and handled it consistent with our Terms and Conditions," it told Front Office Sports in September.

Two loose ends remain. FanDuel has not said what "action" on the account meant. And the regulation says cancel and confiscate, while Simmons said only that "all those bets went out the window," so it is unclear in what we read whether the money was refunded or kept. A commission asking about "the actions they took after it was public" should pin that down, because a $21,800 refund would not be what the regulation describes.

Nor is the door closed on anyone else. Senior enforcement counsel Zachary Mercer said the bureau "hasn't foreclosed any kind of condition" regarding Simmons or Hank, after Commissioner Paul Brodeur asked who exactly was in scope. Commissioner Eileen O'Brien said: "I've been a little disturbed by the lack of full appreciation, I think, in general to the fact that it's illegal." Simmons said on September 1 that he "did not know about the proxy rules." He had not acknowledged the memo when Awful Announcing published.

The argument that this is a waste of a hearing

The best case against all this comes from the rest of Thursday's agenda. BetMGM accepted more than 300 wagers from accounts outside the state or too close to the geofence, including 190 bets totaling $15,564.42 from 25 Massachusetts accounts that should have been blocked because of device modification or software problems. Fanatics failed to notify 132 patrons it had limited between July 29 and September 7, and let 71 patrons generate 102 "refer a friend" links; the notification failure is also headed to a hearing. The approved fines were $7,500 for Caesars on a non-approved boxing match, $7,500 for MGM Springfield on Heisman betting and $10,000 for Caesars on a Northeastern baseball game.

Set beside those, a self-reported proxy case with $21,800 in voided bets and a confessing celebrity looks small. BetMGM's failure was a control that actually broke, and that got a request for further investigation. FanDuel's control worked as designed and it gets an adjudicatory hearing. An operator could fairly read that as a commission chasing the name on the podcast.

We think that objection is partly right. Celebrity is why this case is here. FanDuel found out because Simmons said it into a microphone, and nothing suggests any system caught it. But that is exactly why the hearing is useful. Nobody knows how many Hanks are out there, and nothing in the record suggests any regulator or operator has a number. A shared login with an in-state helper may be close to undetectable, and the state should find out whether it is. O'Brien called the case an "opportunity" for a "deeper dive," and that is the sound version of this proceeding.

What to ask for

If FanDuel's conduct turns out to be what it has described, a large fine would punish it for a problem no operator has solved and would teach everyone to report less. The more useful outcome would be a written standard saying what a licensee must monitor, such as new-device logins far from an account's usual location or betting patterns that change abruptly, and what a licensee owes when a customer confesses in public. That also fits the calendar. Staff said Thursday that drafting has begun on renewal documents for operators, with the first round in February.

What would change our view is evidence that FanDuel's systems flagged the account in August and that someone waved it through because of who it belonged to. That would be a serious case at any dollar amount, and a partner relationship would make it worse. The commission now has the power to find out.

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