The Massachusetts Gaming Commission (MGC) has fined DraftKings $450,000, citing violations of state betting and gaming laws. The regulator has received 1,160 wagers that were placed via credit cards, and which amounted to $83,000 in total value.
The MGC moves against a prominent state operator
The bets were placed between March 10, 2023, and February 13, 2024, and the use of credit cards was a direct contradiction of local gambling laws. Massachusetts prohibits the direct use of credit cards to place a wager in the Bay State.
The prohibition also extends to indirect use of credit cards, which are used to connect to an e-wallet, which then charges the credit card, while the transactions continue to be funneled for gambling.
According to the watchdog, the issues with credit card use – and its proper monitoring – were registered on three individual prolonged periods, between March 10, 2023, and May 31, 2023, May 31, 2023, and July 13, 2023, and finally, August 18, 2023, and January 13, 2024.
While a total of 1,160 wagers were made in total, 218 customers were found to have made 242 deposits with direct or indirect use of credit cards, resulting in the total amount wagered of $83,667.92.
Apart from imposing a fine on the company, the regulator has ordered the company to reimburse the full amount to customers, effectively pushing the amount now payable by DraftKings beyond $500,000.
The Massachusetts case is not necessarily a company policy. The company is said to have deployed strong card-blocking measuresin other states, such as Tennessee, over the same periods when issues were registered in Massachusetts, for example.
DraftKings needs to enact a third-party audit to maintain compliance
Apart from paying the fine, and reimbursing the customers in question, DraftKings will now have to work with an independent third-party company to ensure that it fully complies with gambling laws in Massachusetts and does not end up repeating the same offenses.
The regulator’s penalty is not issued lightly. The Massachusetts Gaming Commission already once thought that DraftKings had been compliant and received assurances that credit card payments were isolated incidents that had been addressed fully.
