Massachusetts-based DraftKings to shell out $450,000 for illegitimate bets made within the state's jurisdiction
Massachusetts Gaming Commission Fines DraftKings for Credit Card Betting Violations
The Massachusetts Gaming Commission (MGC) has imposed a fine of $450,000 on DraftKings for violating state betting and gaming laws, marking the largest penalty issued in the state for such infractions. The violation involved the use of credit cards for online sports betting, an act explicitly prohibited by Massachusetts law.
The MGC's actions indicate a commitment to enforcing state gambling laws and holding companies accountable for violations. The violations occurred between March 10, 2023, and February 13, 2024, during three separate periods. A total of 218 customers made 242 deposits with direct or indirect use of credit cards, resulting in a total amount wagered of $83,667.92.
The first period of improper credit card use occurred between March 10, 2023, and May 31, 2023. Despite believing it had fixed the issue by May 2023, DraftKings self-reported in July 2023 that the fix failed, and credit card deposits continued. It was only in February 2024, just before a hearing, that DraftKings disclosed the ongoing problem had not been fully resolved.
The MGC ordered DraftKings to reimburse a total of $83,000 to 1,160 players due to credit card-funded wagers. The second period of improper credit card use occurred between May 31, 2023, and July 13, 2023. The third period of improper credit card use occurred between August 18, 2023, and January 13, 2024.
In addition to the fine, DraftKings has been ordered to work with an independent third-party company to ensure compliance with Massachusetts gambling laws. The company has also been instructed to implement corrective measures to prevent future violations.
The MGC's actions suggest that it considers the credit card payment issues at DraftKings to be more than isolated incidents. They imply a need for DraftKings to address systemic issues related to credit card payments and compliance with state gambling laws.
The MGC had previously believed that DraftKings had addressed credit card payment issues and considered them isolated incidents. However, DraftKings is reported to have deployed strong card-blocking measures in other states, such as Tennessee, during the same periods when issues were registered in Massachusetts.
The MGC has not issued the penalty lightly, given its previous assurances about DraftKins' compliance. The Commission's actions suggest a potential need for DraftKings to review and revise its policies and procedures related to credit card payments and compliance with state gambling laws.
[1] Boston Globe
[2] MassLive
[3] The Boston Herald
[4] The Republican
- The Massachusetts Gaming Commission's fine on DraftKings for credit card betting violations signifies a significant financial consequence for companies that disregard gambling laws in the context of casino-and-gambling activities.
- The commitment of the Massachusetts Gaming Commission to enforce gambling laws is evident in their actions against DraftKings, as they order the company to work with a third-party compliance firm and implement changes to avoid future violations, which reflects their interest in the finance sector and responsible gambling practices.
