DraftKings Fined $450K in Massachusetts For Prohibited Credit Card Bets

• The Massachusetts Gaming Commission fined DraftKings $450,000 for accepting 1,160 bets funded by credit cards in 2023 and 2024
• The commission held a nearly 10-hour long adjudicatory hearing on the issue in late 2024
• DraftKings will also have to reimburse $83,667.92 to 218 customers that placed the bets

The Massachusetts Gaming Commission has officially reached a conclusion of a DraftKings noncompliance incident that stretched back to 2023.

The commission levied a $450,000 fine to the Massachusetts-based gaming company for improperly accepting 1,160 bets funded by credits cards from March 10, 2023, through Feb. 14, 2024 for a total handle of $83,667.92.

The fine is the largest the commission has levied upon a licensed online sports betting operator since launching sports betting in 2023.

Refunds and an Internal Audit

The Massachusetts Gaming Commission levied the fine on Friday, July 25. In addition to the monetary penalty, DraftKings will be required to refund $83,667.92 of the improperly accepted credit cards funds to 218 customers.

Also, DraftKings will have to develop a corrective action plan to ensure the issue will not happen again and undergo an audit from an independent third party approved by the commission to ensure that no additional credit card funds were deposited and/or bet in the commonwealth.

An auditor must be hired within 90 days and the audit must be completed within a period of 90 days from retention.

“DraftKings is 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,” a DraftKings spokesperson told Sports Betting Dime.

The spokesperson also revealed to Sports Betting Dime that the commission recently granted the operator a permanent license to operate in the state.

“DraftKings extends its sincere thanks to the Massachusetts Gaming Commission for granting us a permanent license to operate in the commonwealth. Furthermore, 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.”

Out-of-State Credit Card Funds to Blame

The Massachusetts Gaming Commission grilled DraftKings representatives for nearly 10-hours across two days in late 2024 during a noncompliance hearing on the incident. The use of credit cards to fund online sports betting accounts in Massachusetts is prohibited, but in this instance customers were funding accounts through credit cards in other states where the practice is legal and then coming into the commonwealth to place bets.

DraftKings self-reported the incident to Bruce Band, former director of sports wagering for the Massachusetts Gaming Commission (MGC), on May 31, 2023. The sports betting operator notified Band that they had mistakenly been allowing customers to fund bets with credit card funds since the state’s sports betting launch on March 10, 2023.

After notifying the gaming commission that the error had been corrected, DraftKings again notified the MGC that its update was ineffective due to a “lack of complete functionality testing” and the prohibition never went into place. Bets with credit card funds were allowed through July 13, 2023, until DraftKings noticed the error. DraftKings again updated its software on that date, which they believed to be successful.

The commission scheduled an adjudicatory hearing for the operator on Feb. 14, 2024, but one day prior to the hearing it was discovered that two additional entries into a DraftKings pool contest had been used with credit card funds.