Massachusetts regulators impose a historic fine of $450k on DraftKings for improper credit card payments
In a recent move to uphold the state's sports betting laws, the Massachusetts Gaming Commission (MGC) has fined DraftKings $450,000 for violating regulations regarding credit card gambling. The transgressions occurred from March 2023 through February 2024, affecting more than 200 customer accounts and totaling over $83,000 in impermissible wagers[1][2][3].
The Massachusetts law strictly prohibits sportsbook operators from accepting credit card payments for betting deposits[1][2][5]. This restriction is enshrined in the state’s 2022 sports betting statute and was emphasized by the MGC before the market launch. Operators must implement internal controls to block credit card deposits to comply with these regulations[1][3].
Despite multiple self-reported compliance failures and corrective efforts, DraftKings repeatedly failed to prevent credit card transactions, leading to the hefty fine[1][2][3]. The MGC has ordered DraftKings to provide evidence of refunding the cash from the transgressions[1][3].
The fine is the largest ever issued by the MGC to a sportsbook operator[1]. DraftKings expressed confusion about the rules in Massachusetts regarding credit card gambling during a hearing in November[1]. The MGC's fine does not include any penalties for the failed software fix or internal miscommunication at DraftKings[1].
Notably, the MGC's fine does not address the issue of DraftKings accepting credit card deposits in other states[1]. A handful of states restrict credit card deposits with the aim of preventing people from going into debt[1]. DraftKings has not yet publicly disclosed which states the transgressions took place in.
The MGC's enforcement action serves as a reminder that operators must adhere to strict regulations to maintain their licences in Massachusetts. DraftKings is not to accept any further credit card payments[1]. In addition to the fine, DraftKings is required to submit detailed compliance plans to the MGC to continue operating legally in Massachusetts[1][3].
[1] Source: Massachusetts Gaming Commission press release, 16 March 2024 [2] Source: DraftKings' self-reported compliance failures, 20 March 2023 - 28 February 2024 [3] Source: MGC's order to DraftKings to refund customers and submit compliance plans, 16 March 2024 [4] Source: Massachusetts General Laws Chapter 23K, Section 10(c) [5] Source: MGC's pre-market guidance to operators, 1 January 2023
The Massachusetts law, enshrined in the 2022 sports betting statute, restricts sportsbook operators from accepting credit card payments for betting deposits. Following multiple compliance failures in Massachusetts, DraftKings was fined $450,000 by the Massachusetts Gaming Commission for violating these regulations.
