Massachusetts Hits DraftKings with Record $450,000 Fine for Illegal Credit Card Wagers
The Massachusetts Gaming Commission (MGC) has fined DraftKings a record $450,000 for illegally accepting bets funded by credit cards. The penalty comes after the operator repeatedly failed to fix the compliance issue for nearly a year, despite self-reporting the violations to state regulators.
A Year of Failed Fixes
The fine addresses 1,160 illegal wagers totaling $83,667.92 that were placed by 218 customers between March 2023 and February 2024.
Massachusetts law explicitly prohibits the use of credit cards to fund sports betting accounts, a rule that was made clear to all operators before the market launched.
DraftKings self-reported the issue to the MGC on three separate occasions. However, after the initial report, the company’s attempted fix proved ineffective due to what it called a “lack of full functionality testing.”
The MGC noted that even after discovering the non-compliance, DraftKings repeatedly failed to implement a working solution while assuring regulators the problem had been resolved.
Excuses Rejected by Regulators
During the investigation, DraftKings argued that it had misinterpreted the law, believing the ban only applied to users who were physically in Massachusetts at the time of deposit. The MGC flatly rejected this argument, stating the law was clear and contained no such geographic limitations.
Regulators also pointed out that the credit card ban had been discussed in numerous public meetings and that the MGC had personally contacted every operator to confirm compliance before launch.
Furthermore, the commission highlighted that DraftKings had already successfully implemented similar controls in Tennessee, proving it had the technical capability to prevent the violations.
A Multi-Faceted Penalty
In addition to the record-setting fine, the MGC has imposed several other sanctions on DraftKings. The company must repay the full $83,667.92 to the 218 affected customers and provide proof of the refunds to the commission.
DraftKings is also required to develop a comprehensive remedial action plan to ensure the issue does not happen again. Most significantly, the company must undergo an independent, third-party audit to verify that no further credit card funds have been used for wagering in the state. The auditor must be hired within 90 days, with the audit completed 90 days after that.
The commission considered revoking DraftKings’ license but ultimately decided against it, citing the fact that the operator had self-reported each violation. The MGC determined that the fine, refund, and audit requirements were a fair resolution.
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