Massachusetts authorities penalize DraftKings with a fine of $450,000
In a recent regulatory action, the Massachusetts Gaming Commission (MGC) fined DraftKings $450,000 for allowing customers to deposit funds using credit cards for sports betting. The violations, which occurred between March 2023 and February 2024, led to more than 1,100 wagers totaling over $83,000 made by out-of-state credit card users[1][2].
The regulation that Massachusetts betting sites must follow comes from MA General Laws Chapter 23N, which explicitly prohibits wagering with a credit card to discourage bettors from using borrowed funds for gambling[3]. Sports betting sites that accept credit cards are illegal in Massachusetts due to these specific provisions in state law.
Despite being informed about this prohibition before legal betting began in 2023, DraftKings continued to accept credit card deposits for sports betting, breaching Massachusetts General Laws Chapter 23N and Massachusetts Gaming Commission rules[1][4]. The regulatory action required DraftKings to refund all affected customer deposits and implement an independent compliance audit and a corrective action plan to prevent similar violations[2].
However, the issue continued to persist despite the initial fine and requirements for an independent compliance audit, a corrective action plan, and customer refunds. Incomplete testing and remediation allowed the violations to continue into early 2024[1].
The MGC maintains its robust prohibition on credit card use for sports betting, and the commission continues to enforce this strictly. The fine imposed on DraftKings serves as a clear warning to other sports betting operators in Massachusetts[1][4].
Sources: [1] Massachusetts Gaming Commission [2] DraftKings press release [3] MA General Laws Chapter 23N [4] DraftKings self-reported part of the issue regarding credit card deposits.
- Sports betting with credit cards remains strictly prohibited in Massachusetts, as defined by Massachusetts General Laws Chapter 23N, with the Massachusetts Gaming Commission (MGC) enforcing this regulation vigilantly.
- Although DraftKings was previously informed about the credit card prohibition for sports betting before legal betting commenced in 2023, the company continued to facilitate such transactions, breaching both state law and MGC rules.
- The technological measures implemented by betting sites play a crucial role in upholding the law, yet ineffective remediation allowed DraftKings to continue accepting credit card deposits for sports betting even after being fined $450,000 and complying with the commission's requirements.
