The Maryland State Board of Elections issued a $48,000 fine to the Sports Betting Alliance on Tuesday for failing to comply with the state’s 48-hour disclosure requirements.
The fine is the largest financial penalty in the history of the Board and was issued to the SBA for failing to not properly record campaign donations and expenditures.
The SBA represents sportsbook operators like DraftKings, Fanatics, BetMGM, and FanDuel, all of whom have sports betting licences in Maryland.
Jared DeMarinis, the Board’s director of candidature and campaign finance, said in a statement, “We’re cracking down hard on disclosure with independent expenditure entities, and that was the biggest one that was collected so far.”
Independent expenditure organisations are allowed to accept contributions that are not subject to caps in Maryland. Expenses that exceed $10,000 need to be publicly disclosed to the Maryland Board of Elections within 48 hours or receive a fine of $1,000 per day. The Board can also decide to withhold 10% of the amount spent by the organisation in the state if it is greater.
The recent fines are related to the activities that occurred during the 2020 campaign cycle, when legal sports betting was approved by Maryland voters. The SBA reportedly spent part of the funds during this period but failed to quickly account for the expenditure within the required timeframe.
The group also supplied funding to a number of candidates during the election cycle, and while these donations were documented in the candidates’ committee reports, they were not sent to the state’s Board of Elections. As a result of this, the SBC failed to meet a double filing requirement.
“The whole point is that these penalties are here because of the impact independent expenditure committees can have on the process,” DeMarinis said.
“They usually come in the last possible second and do some political ads or disseminate campaign material that could possibly affect the election, and you need to have very timely disclosure to ensure that individuals are making informed choices at the ballot box.”
The Maryland Board of Elections has collected around $74,900 in fines from 28 entities over the past two months. These fines are usually meted out for violations like failing to record campaign contributions and expenditures as well as donations during the campaign period.
The majority of these penalties were usually $1,200 or less and even went down to less than $100. The SBA is the only group to receive a fine higher than $7,500.
Entities like Motorola Solutions Political Action Committee and the United Political Issues Fund were issued fines of $7,500 and $5,500, respectively. Working Families National PAC was also given a $7,000 fine for not filing the required disclosures. The fines are sent to a state fund used by electoral candidates that require public campaign financing.
In response to the Maryland Board of Elections recent decree, a spokesperson for the SBA accepted their error, stating that it was due to a filing error on their end. The group also opted not to appeal the $48,000 fine.
“This was simply a filing error by our compliance team. As soon as we realised the mistake, we immediately filed the missing form and worked with the Maryland State Board of Elections to correct the error,” the spokesperson said.
There was no information about how much the SBA spent during the 2020 campaign cycle, nor was there an amended report in the state campaign finance records.
“They admit guilt that they were late. Usually, they have a compliance firm that failed to do some sort of activity at that point, so I assume they’re going after the compliance firm for their failures,” DeMarinis said.
