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Massachusetts Regulates DraftKings with a Fine of $450,000 for Unlawful Credit Card Transactions

Massachusetts imposes a $450,000 penalty on DraftKings for repeatedly accepting credit card deposits, an action prohibited by state law.

Massachusetts enforces a hefty $450k penalty against DraftKings for improper credit card...
Massachusetts enforces a hefty $450k penalty against DraftKings for improper credit card transactions

Massachusetts Regulates DraftKings with a Fine of $450,000 for Unlawful Credit Card Transactions

Massachusetts Gaming Commission Slaps $450,000 Fine on DraftKings for Credit Card Violations

In a significant move, the Massachusetts Gaming Commission (MGC) has imposed a fine of $450,000 on DraftKings, marking the largest penalty ever levied on a sportsbook operator by the commission. The fine is in relation to three separate violations self-reported by DraftKings in 2023 and 2024, where the operator accepted over $83,000 in credit card deposits, despite Massachusetts law explicitly prohibiting such transactions.

The violations occurred due to internal miscommunication, a failed software fix, and the Pools product of DraftKings allowing for credit card wagers. The Pools product, it seems, contributed significantly to the transgressions.

The MGC has ordered DraftKings to provide proof that it has refunded all the cash involved in the transgressions. This comes as a result of a hearing held in November, where it was revealed that DraftKings had some confusion about the rules in Massachusetts regarding credit card gambling.

Massachusetts is one of the few states that restrict credit card deposits to prevent people from going into debt when funding their accounts with money they don't currently have. The MGC has been clear about these restrictions during public meetings and direct communications to sportsbook operators, emphasizing that safeguards must be in place to block credit card-funded betting activity.

DraftKings, under the impression that customers could fund their accounts in another state with a credit card and use the balance to wager in Massachusetts, apparently overlooked these regulations. As a result, the operator was not allowed to accept any further credit card payments, according to the MGC's order.

This incident serves as a reminder to all sportsbook operators in Massachusetts that they must not allow credit card funding for sports betting accounts. Failure to comply results in significant fines and regulatory penalties enforced by the MGC.

[1] Massachusetts Gaming Commission Regulations and Orders [2] Massachusetts 2022 Sports Betting Statute [3] DraftKings' Self-Reported Violations [4] MGC Hearing on DraftKings Violations (November 2023) [5] MGC Order Prohibiting Further Credit Card Payments for DraftKings (December 2023)

  1. Despite the Massachusetts Gaming Commission's clear regulations against credit card funding for sports betting accounts, DraftKings, in its business operations, overlooked these rules, leading to a fine of $450,000 for sports-betting violations.
  2. In the realm of finance and business, sports-betting companies must be mindful of the regulations set by the Massachusetts Gaming Commission, as violations can result in hefty fines, as seen with DraftKings.

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