Overview
During our audit of the Massachusetts Gaming Commission (MGC), we learned that two class action lawsuits were filed against Massachusetts gaming establishments. These lawsuits are believed to have arisen from discrepancies between the Code of Massachusetts Regulations (CMR) and the Massachusetts General Laws regarding the monthly win/loss statements that should be sent to reward cardholders.
According to Section 29 of Chapter 23K of the General Laws,
The gaming establishment shall issue to each patron who has been issued a rewards card or who participates in a cashless wagering system by the gaming establishment a monthly statement, mailed to the patron at the patron’s physical mailing address, which shall include the patron’s total bets, wins and losses; provided, however, that a patron shall be given the opportunity to decline receiving a monthly statement at the time the rewards card is issued or during initial participation in a cashless wagering system; provided further, that a patron may later opt out of receiving monthly statements by providing a written request to cease monthly statements to the gaming establishment. A gaming licensee who has implemented such a program or system shall annually report to the commission the amount of money spent and lost by patrons who have been issued a rewards card or who participated in a cashless wagering system, aggregated by zip code.
An official from MGC clarified that it is the commissioners’ responsibility to adopt, amend, or repeal regulations necessary for implementing, administering, and enforcing this chapter as outlined in Section 4(37) of Chapter 23K of the General Laws.
During an open and public meeting held on August 10, 2017, the decision was made to interpret the General Laws such that an email address provided by a reward cardholder may be considered a valid “physical mailing address.” While this interpretation is reflected in 205 CMR 138.13(4), which allows win/loss statements to be sent by email, it appears to directly contradict Section 29 of Chapter 23K of the General Laws, which requires that “a monthly statement [be] mailed to the patron at the patron’s physical mailing address.”
Currently, MGC lacks policies and procedures to ensure that monthly win/loss statements are sent to reward cardholders in accordance with 205 CMR 138.13(4) and Section 29 of Chapter 23K of the General Laws.
As a result, during the audit period, reward cardholders were not provided with clear and detailed monthly statements—either hardcopy or electronic versions—that outlined their wins and losses. This means that cardholders were deprived of crucial information that was essential for making informed decisions regarding their gaming habits and practicing responsible gaming. By not meeting these requirements, gaming establishments may enhance their profitability at the expense of their patrons’ well-being. Moreover, MGC stands to gain financially, as it receives a portion of the revenue generated by these casinos. This situation raises concerns not only about the implications of prioritizing profit over player welfare but also about the effectiveness of regulatory oversight in promoting safe gaming practices, especially when that regulatory oversight appears inconsistent with the clear language of the General Laws.
According to 205 CMR 138.13(4),
The gaming licensee’s complimentary distribution program shall include provisions ensuring that each patron who has been issued a rewards card by the gaming licensee (or its parent or other associated entity) in Massachusetts is issued a monthly statement, mailed to the patron at the patron’s physical mailing address, which shall include the patron’s total bets, wins and losses in Massachusetts in accordance with [Section 29 of Chapter 23K of the General Laws]. For purposes of 205 CMR 138.13(4), the following shall apply:
- An email address provided by the patron at the time a rewards card is applied for may be considered a physical mailing address. If a gaming licensee will provide the required notices via email, its program submission shall describe the manner in which the email contact list will be compiled and maintained.
MGC officials believe that the General Laws (which require mailings to a physical address) and the CMR (which permits emails to suffice for mailings to physical addresses) are not contradictory. MGC reports that it has used its lawful discretion to interpret the statute in a way that would benefit the Commonwealth as a whole.
MGC should implement a policy and procedure that includes monitoring to ensure that monthly win/loss statements are provided to reward cardholders to promote responsible gaming. We further recommend that MGC seek additional review of 205 CMR 138.13(4) to help ensure the accuracy of MGC’s decision to interpret the General Laws in a manner that appears, on its face, to contradict the expressed requirements of that law.
Auditee’s Response
In response to the audit’s comments under “Other Matters” the Commission has the right, to interpret its own statute and believes that electronic communications are necessary and sufficient.1
[Footnote:]
An administrative agency has considerable leeway in interpreting its governing statute. [Student No. 9 v. Board of Educ., 440 Mass. 752, 762 (2004)] A court must give substantial deference to the agency's interpretation of the statute and apply all rational presumptions in favor of the regulation's validity. Id. at 762–63, 802 N.E.2d 105. It “will not declare a regulation void unless its provisions cannot, in any appropriate way, be interpreted in harmony with the legislative mandate.” Id. at 763, 802 N.E.2d 105; see also Biogen IDEC MA, Inc., 454 Mass. at 187, 908 N.E.2d 740.
City of Bos. v. Massachusetts Gaming Comm'n, No. 2015 CV 0012, 2015 WL 9805753, at *12 (Mass. Super. Dec. 3, 2015); see also Genworth Life Insurance Company v. Commissioner of Ins., 95 Mass. App. Ct. 392, 395-96 (2019), quoting Commerce Ins. Co. v. Commissioner of Ins., 447, Mass 478, 481 (2006) (Courts give substantial deference to a reasonable interpretation of a statute by the administrative agency charged with its administration enforcement)
Auditor’s Reply
We recommend that MGC implement a policy and procedure to ensure that monthly win/loss statements are provided to reward cardholders. Additionally, MGC should seek further review of 205 CMR 138.13(4) to help ensure the accuracy of MGC’s decision to interpret the General Laws in a way that appears to contradict the stated requirements of that law; namely, that statements be “mailed to the patron at the patron’s physical mailing address.”
| Date published: | August 28, 2025 |
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