DraftKings has been fined $450,000 by the Massachusetts Gaming Commission (MGC) after admitting to multiple incidents in which it accepted credit card deposits in violation of state law. The penalty follows three separate compliance failures that occurred in 2023 and 2024, each of which the Boston-based operator self-reported.
Repeated Breaches Despite Prior Warnings
Under Massachusetts law, online sports betting platforms are strictly prohibited from accepting deposits or wagers via credit card. The regulation applies regardless of whether the deposit originates from another state where such transactions may be legal.
DraftKings reported the first violation in May 2023, shortly after its platform launched in the state in March. It initially attributed the problem to an internal miscommunication and believed it had resolved the issue. However, it detected a second failure in July 2023 after discovering its technical fix had not worked. A final breach was identified in February 2024, when the company found it had unknowingly accepted two additional wagers via credit card through its Pools product, months apart.
In total, over $83,000 in credit card funds were used by 218 customers. The MGC’s ruling not only imposed the financial penalty but also mandated that DraftKings provide evidence the funds were fully refunded. Additionally, the operator must complete an independent audit to verify no other credit card transactions occurred during the launch phase between February 23 and March 10, 2023.
Regulators Criticize Lack of Understanding
The fine follows a seven-hour hearing held in November 2023, during which DraftKings executives testified that the company misunderstood how the law applied to out-of-state deposits. Senior Manager of Regulatory Operations Kevin Nelson said the firm believed the credit card restriction applied only when users were physically in Massachusetts.
Commissioner Eileen O’Brien strongly rejected that interpretation. “I’d like you to tell me where the words are, the restricting words ‘while physically located in Massachusetts’ or ‘located’,” she asked, before emphasizing the clear statutory language: “a deposit into a sports wagering account shall not be made using a credit card.”
DraftKings’ Response and Commission Ruling
A DraftKings spokesperson said in response to the ruling, “We are dedicated to upholding the regulatory standards set by each state and jurisdiction in which we operate, and we value the productive and collaborative relationships we’ve built with regulators.”
In its written decision dated July 24, 2025, the MGC criticized DraftKings for failing to correct the issue over nearly a year despite repeated reports that the problem had been resolved. The Commission also noted that DraftKings had successfully implemented controls to prevent similar issues in Tennessee, where sports betting was legalized earlier.
“Despite framing the matter as a ‘misunderstanding’ or an ‘anomalous series of events,’ it is undisputed that DraftKings’ actions and inactions constitute both statutory and regulatory violations,” the MGC concluded.
While the Commission had the authority to suspend or revoke DraftKings’ license, it opted for a fine, customer reimbursements, and mandatory auditing as sufficient penalties, recognizing the operator’s self-reporting and transparency throughout the process.
Source:
“Massachusetts regulator fines DraftKings $450K for credit card usage”, sbcamericas.com, Jul 28, 2025
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