Carousel Fined $80,000 for MaximBet Geolocation Misfire  

Carousel Fined $80,000 for MaximBet Geolocation Misfire  

MaximBet, the sports betting agency launched by the namesake lifestyle brand, has brought an $80,000 penalty on its operator in Colorado. The Division of Gaming issued the fine to Carousel Group for failing to enforce geolocation standards between December 1 and December 16, SportsHandle explained in a detailed report on the issue.

This resulted in the sportsbook accepting wagers without necessary geotracking customers and leaving the betting platform non-compliant with licensing prerequisites. Whether wagers from outside the state were allowed was not immediately clear, but in theory, there should have been no problem for people to bet from beyond the Colorado state border due to the lack of geolocation in place. Possible out-of-state gambling was suggested after an investigation.

Geolocation Shuts Down at MaximBet for 16 Days

The issue was only reported after a customer said they were not able to place a bet due to a “location check” failure. MaximBet hurried and reported the issue to the Division of Gaming on December 23, which explains why the fine has been fairly small, although it’s one of the more significant penalties in the still young Colorado betting market.

The customer informed the support service that they had no trouble betting due to location errors in the past, suggesting that the person in question may have done so outside of Colorado and in a neighboring state.

Further investigation by MaximBet quickly found the issue of the problem and pinpointed it to a glitch affecting only the web version of the website, a still serious oversight. MaximBet was able to quickly discover the exact number of bettors who were able to place a wager remotely, or at least narrow down the ones that are the most likely to have done so.

А total of 29 people was able to place their wagers while avoiding geolocation, but the company was confident that close to 25 of the IP addresses were based in the state when they were betting. This left four possible breaches of the company’s licensing agreement. MaximBet and the Division of Gaming worked together to establish whether such instances happened.

No Definitive Confirmation for Out-of-state Gambling

Overall, the conclusions were ambiguous with the regulator and company not entirely certain whether such out-of-state betting did occur but not able to rule out the possibility completely. The Division of Gaming reached out to independent auditors from Odds On Compliance who explained that they were not sure why MaximBet had switched off its geolocation or whether the company knew. 

MaximBet was also unable to confirm why this vital feature was switched off and whether it was done by an external or internal party, was the result of a malfunction or intentional sabotage. Since the accident, MaximBet has been acting determinedly to uphold regulatory standards. The company even decided to close accounts for customers who reside outside the state and who may have tried to bet out of the state.

Carousel Group CEO Daniel Graetzer apologized to the regulator in a letter and said that the company regretted the technical misconfiguration. Since the problem was established, the company has undertaken a number of processes to ensure that such things do not happen again. MaximBet assured the regulator that it took compliance very seriously and was looking into ways to prevent this issue from ever happening again.