WorldPay Hit With $130K Fine For Operating Without Valid Colorado License

Written By Ken Pomponio on 06/20/2022
WorldPay Colorado Fine 062022

Colorado sports betting continues to suffer through growing pains.

WorldPay Gaming Solutions, an electronic funds payment processing provider, hs taken the latest operational misstep. And the company has been fined $130,000 by the Colorado Division of Gaming.

The fine stems from a 13-day period this April when the company processed transactions with an expired state license. 

The Colorado Limited Gaming Control Commission, which approved the $130,000 sanction, said WorldPay processed transactions for 21 Colorado online sportsbooks during that timeframe.

WorldPay, based in Symmes Township, Ohio, has acknowledged the violations and accepted the fine.

Still, it’s the latest bump in the road for sports betting in Colorado, which marked its two-year anniversary May 1.

In April, MaximBet/Carousel Group was fined $80,000 for a geolocation snafu in December 2021.

And, earlier this month, it was the CDOG and the CLGCC themselves that were cited for insufficient regulatory practices by the Colorado Office of the State Auditor.

WorldPay failed to respond to CDOG inquiries

The CLGCC on Thursday released a signed nine-page stipulation and agreement letter detailing the violations.

The included timeline was reported as follows:

  • October, 20, 2021: The Colorado Division of Gaming (CDOG) emailed WorldPay primary business contact Joseph Pappano a vendor minor renewal application.
  • Jan. 31, 2022: A CDOG renewal reminder email sent to Pappano bounced back as undeliverable. The Division then left WorldPay a voicemail regarding the renewal. On this date, the CDOG also emailed the renewal application to two other WorldPay executives.
  • Feb. 23: WorldPay execs again were emailed about its pending license expiration. CDOG still received no response.
  • April 2: WorldPay’s Colorado Internet Sports Betting vendor minor license expired.
  • April 11: CDOG notified WorldPay legal counsel Jacob Kocholla, that the company had been operating without a Colorado license since April 3.
  • April 13: CDOG notified Colorado sports betting operators that WorldPay no longer was a licensed vendor in the state. Therefore, any operator any using WorldPay to process transactions was “in violation of Colorado state law.”
  • April 14: WorldPay contacted CDOG asking for a license extension, which the Division denied since the company no longer was carrying a valid license. On that same day, WorldPay notified its affiliated vendors that was “pausing all processing of gambling transactions” as it awaiting its license renewal. 
  • April 15: WorldPay suspended all transactions which required a Colorado license.
  • April 21: The CLGCC considered and approved WorldPay’s vendor minor license application.

 $9.8 million in transactions handled without license

“On or about” May 10, WorldPay reported to the Colorado gaming regulatory agencies that it processed 174,447 in-state sports betting payment transactions from 12:01 a.m. April 3 through April 15.

Those transactions, WorldPay said, totaled $9,824,809.

On April 14, while informing its vending partners that is was pausing operations, WorldPay blamed a “administrative licensing error.” WorldPay also told vendors at the time that “there is no accusation of wrongdoing pending” against it.

WorldPay executive Joseph Watkins later walked back those statements. He told the CLGCC that the company accepted the penalty and took full “responsibility” for operating without a valid license.

$10K fine levied for each day of violation

WorldPay was found to have committed 13 “counts of violations of the Colorado Limited Gaming Act.” 

And the company’s $130,000 fine was based on a rate of $10,000 per day it operated without an active license.

Half of that fine ($65,000) is due within 10 days of the June 16 agreement. The remaining $65,000 will be held “in abeyance” for a period of 731 days or two years from the acceptance of the agreement.

If WorldPay is found in violation of any Colorado gaming laws during that timeframe, that remaining $65,000 will also become due within a 10-day span of an evidentiary hearing.

In addition, WorldPay agreed to audit its internal licensing protocols end “enact changes to prevent future compliance issues.” 

The agreement also stipulates that WorldPay will provide a written plan to CDOG on how the changes will be enacted.

Photo by Shutterstock
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Ken Pomponio

Ken is a fourth-generation Coloradan and career sports journalist with more than 30 years covering the gamut from the preps to the pros. A lifelong Front Range resident and son of 1960s Denver Broncos season-ticket holders, he is a long-time sports betting enthusiast whose insight and passion shine through in his coverage at PlayColorado.

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