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DraftKings fined $450,000 for credit card betting violations
The Massachusetts Gaming Commission (MGC) issued a $450,000 fine against DraftKings for unintentionally allowing customers to bet with credit cards.
DraftKings accepted more than $83,000 in credit card deposits multiple times in 2023 and 2024, which was explicitly prohibited under the state’s 2022 sports betting statute. It bans operators from accepting credit card payments for deposits and bets, regardless of whether the deposit was made in a state in which credit card deposits are allowed.
Dated July 24, MGC’s written decision reported 3 incidents in May 2023, July 2023, and February 2024. In each case, DraftKings self-reported after discovering that it had unintentionally allowed credit card funds to be used in Massachusetts.
The first round of violations went from March to May 2023 because of an internal miscommunication. After a software fix, the company believed the issue was solved. However, it was later discovered that the fix was unsuccessful. The company self-reported to the regulator.
The final incident involved 2 credit-card funded bets on DraftKings’ Pools, placed 5 months apart. DraftKings self-reported again.
As part of the punishment, the MGC ordered DraftKings to provide proof of the $83,000 refund to the affected 218 customers.
In a statement to SBC Americas, a DraftKings spokesperson said:
“We are dedicated to upholding the regulatory standards set by each state and jurisdiction in which we operate, and we value the productive and collaborative relationships we’ve built with regulators.”
The violations were publicly examined by MGC in November 2024. DraftKings acknowledged a misinterpretation of the regulation, stating they believed the credit card ban applied only when customers were physically located within Massachusetts.
Commissioner Eileen O’Brien criticized DraftKings’ interpretation, referencing the statute’s explicit language. During the hearing, she pressed DraftKings’ Senior Manager of Regulatory Operations, Kevin Nelson, questioning how the company could have overlooked the clear legal language.
The commission also emphasized that DraftKings had previously implemented safeguards to block similar credit card activity in Tennessee, suggesting the company had the capability but failed to apply the same strictness in Massachusetts.
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