DraftKings Hit with Largest Sports Betting Fine in Massachusetts
DraftKings has been fined $450,000 by the Massachusetts Gaming Commission (MGC) for violating state laws prohibiting using credit cards for sports betting. The fine ranks as the largest penalty for a sports betting violation in Massachusetts since the state launched its regulated sports betting market in 2023.
LISTEN TO THIS ARTICLE:According to the MGC, the Boston-based operator was found to have accepted over 1,100 bets funded by credit cards totaling $83,667.92 from 218 customers between March 2023 and February 2024. DraftKings self-reported three instances of non-compliance in May 2023, July 2023, and February 2024, after discovering that it had inadvertently allowed credit card funds to be used for sports betting in the state.
The company attributed the first wave of violations from March to May 2023 to internal miscommunication. After implementing a software fix, the company thought the problem was resolved, but it later discovered that the fix was ineffective, leading to further reports to the regulator.
A pair of credit card-funded wagers on DraftKings' Pools product, placed five months apart, led to the company's third and final self-report.
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Compliance Measures
Under Massachusetts' 2022 sports betting law, wagering operators are not allowed to accept credit card payments for deposits or wagers, regardless of whether the transaction occurs in a state that permits credit card deposits. In the penalty order released on Friday, July 24, commissioners noted that they had proactively contacted DraftKings and other operators to verify their compliance with the credit card ban before legal sports betting began.
Alongside the fine, DraftKings was ordered to refund all credit card funds to the 218 customers, develop and implement corrective plans for internal communication and credit card issues, and undergo an independent audit to confirm no additional credit card transactions took place between February 23 and March 10, 2023, when it obtained a temporary license and launched in the state.
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