Massachusetts Penalizes DraftKings for Credit Card Betting Breaches

Massachusetts Gaming Commission Penalizes DraftKings
The Massachusetts Gaming Commission (MGC) has imposed a substantial fine on DraftKings due to multiple breaches of state gambling regulations. The main issue centered around DraftKings allowing their customers to deposit funds for sports betting using credit cards, a practice prohibited under Massachusetts law.
Instances of Credit Card Betting Violations
Between March 10, 2023, and February 13, 2024, DraftKings permitted at least 1,160 bets made through credit card transactions. The regulator identified three distinct time frames during which these breaches took place:
- March 10, 2023 – May 31, 2023
- May 31, 2023 – July 13, 2023
- August 18, 2023 – February 13, 2024
The total amount wagered using credit cards during these periods was approximately $83,667.92. During this time, 218 customers performed 242 credit card deposits in violation of the rules.
Regulator’s Observations and DraftKings’ Response
Though DraftKings proactively reported these infractions to the MGC, the commission highlighted ongoing internal miscommunication and ineffective corrective actions within the company that led to repeated offenses. Initial attempts by DraftKings to rectify the problem after the first violation period were unsuccessful, resulting in a resurgence of credit card betting and requiring additional fixes.
The MGC attributed these failures to misunderstandings among DraftKings’ teams about the commission’s directives.
Financial Penalty and Compliance Measures Imposed
As a result of these multiple violations, the Massachusetts Gaming Commission imposed a fine of $450,000 on DraftKings. While the regulator acknowledged the operator’s cooperation and factored in the self-reporting of violations in setting the penalty, it underscored the seriousness of permitting credit card gambling.
Moreover, DraftKings must refund all funds to the 218 affected customers and develop a robust plan to ensure clear communication and strict adherence to regulatory requirements among its staff.
In addition, the company is obligated to engage an independent third party to conduct a thorough review aimed at detecting any other compliance issues.
Related Legal Context
Separately, DraftKings recently settled a lawsuit in New Jersey involving allegations that the company exploited a gambler struggling with problem gambling issues, highlighting ongoing scrutiny of its operations in multiple states.