DraftKings Fined $450,000 for Violating Credit Card Betting Ban in Massachusetts

DraftKings, a leading online sportsbook and casino in the US, has been fined $450,000 by the Massachusetts Gaming Commission (MGC) after it allowed more than a thousand illegal wagers funded by credit cards, a direct violation of state gambling laws.

The regulator issued the penalty following months of investigation, concluding that the Boston-based sportsbook failed to block impermissible credit card use from the time it launched operations in the state in March 2023 until February 2024.

What Went Wrong

According to the MGC, 218 customers used credit cards to fund 1,160 sports wagers totaling over $83,000. Massachusetts gambling law, enacted in 2022, explicitly prohibits credit cards for deposits or betting, to promote responsible gaming and reduce financial risk.

DraftKings first self-reported the issue in May 2023, shortly after launching its sportsbook. It initially claimed the problem was resolved with a software update. However, the same issue reappeared in July and again in January 2024. A second fix also failed to block credit card transactions.

Despite multiple attempts to resolve the issue, the MGC determined that the company continued accepting credit card deposits, a situation that lasted for nearly a year.

DraftKings Acknowledges the Breach

DraftKings did not challenge the facts presented by the Massachusetts Gaming Commission. The company attributed the violation to a misunderstanding of the state’s rules regarding credit card use. Internally, DraftKings indicated that the regulatory requirement had not been communicated across its compliance teams, which contributed to the oversight. The operator also admitted that insufficient system testing allowed the issue to persist. According to its report, updated measures have since been implemented to prevent similar problems in the future.

Required Repayments and Audits

Beyond the $450,000 fine, the commission has ordered DraftKings to refund the full $83,667.92 in impermissible bets to the affected users. The company must also develop a comprehensive compliance action plan and undergo a third-party audit to verify that no additional credit card-funded deposits occurred between February and March 2023, the period immediately after DraftKings received its temporary license.

Largest Fine Since Massachusetts Legalized Sports Betting

The $450,000 penalty marks one of the most substantial regulatory actions taken since sports betting became legal in Massachusetts. The ruling highlights how state regulators are increasingly focused on enforcing compliance, even among well-established and licensed operators. Although DraftKings maintained its full five-year license, the case underscores potential weaknesses in internal communication between compliance and technical departments.

What Comes Next for DraftKings and Massachusetts Bettors

DraftKings has expressed its intention to meet regulatory expectations in Massachusetts and other U.S. markets. Meanwhile, the Massachusetts Gaming Commission has indicated it will continue to monitor operators for similar violations closely. Under current state rules, sports bettors are permitted to fund their accounts using debit cards, PayPal, bank transfers, Play+ cards, or cash at authorized retail locations. Credit card funding remains explicitly prohibited.

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