Massachusetts Regulator Holds Hearing Over DraftKings Violation

DraftKings is once again in hot water in the Bay State.

The Massachusetts Gaming Commission (MGC) held a seven-hour hearing with DraftKings officials over the improper use of credit cards. The operator, headquartered in the state, is accused of allowing customers to fund their accounts to place bets. The regulator does not allow bettors to fund their accounts from those cards in an attempt to curb the financial consequences of problem gambling.

The hearing was the second, following a three-hour meeting last month.

Hearing More Complex Than Previous Ones

The MGC has a history of aggressively enforcing policies, leading to many hearings with several sports betting operators. The regulator was a big reason Barstool decided to end its foray into sports betting, and they are far from the only one.

Most of the MGC’s previous hearings have only lasted for an hour or two, but this one was far longer. That is because DraftKings has a strong defense. They have pointed out that their platform does not accept deposits from credit cards. Instead, customers have used credit cards to fund their accounts in other states before betting in Massachusetts.

DraftKings is unable to identify which funds came from out-of-state credit card deposits. Therefore, the wagers were accepted. 

Over $80,000 Worth of CC Funds Used

The overall number of violations is relatively low. From March 2023 to February 2024, 218 users placed 1,160 wagers using over $80,000 in credit card funds. By comparison, the operator had a handle of $355.2 million in October alone.

That low number supports DraftKings’ claims, which is a primary reason why the hearing took far longer than normal.

DraftKings Now Awaits Decision From MGC

The MGC did not issue a ruling or penalty after the hearing was concluded. That means DraftKings will now have to wait to find out its fate.

The penalties the MGC could impose range from a small fine to the suspension of DraftKings’ operator license. While the most extreme options are unlikely, many expect a fine to be levied against the operator. The regulator has a history of applying penalties to even the most minor violations, including those operators' self-reports.

If the MGC does impose a penalty, it will send a message to other sportsbooks that they need to better track credit card funds deposited in other markets.