The Massachusetts Gaming Commission (MGC) has levied a $450,000 fine against Boston-based sportsbook operator DraftKings after the company unintentionally allowed customers to fund accounts with credit cards on multiple occasions.
The fine stems from a series of infractions in 2023 and 2024, during which DraftKings accepted more than $83,000 in credit card deposits. The practice is explicitly prohibited under the state’s 2022 sports betting statute, which bans operators from accepting credit card payments for deposits or wagers, regardless of whether the deposit was made in a state in which credit card deposits are allowed.
According to the MGC’s written decision dated July 24, DraftKings reported three separate incidents of non-compliance — in May 2023, July 2023, and February 2024. In each case, the operator self-reported after discovering that it had unintentionally allowed credit card funds to be used for gambling activity in Massachusetts.
DraftKings initially attributed the first round of violations, which began at launch in March 2023 and lasted through May, to an internal miscommunication. After attempting a software fix, the company believed the problem had been addressed. However, it was later discovered that the fix was unsuccessful, prompting additional reports to the regulator.
The final incident involved two credit card-funded wagers on DraftKings’ Pools product — placed five months apart — which triggered the company’s third and final self-report.
As part of the penalty, the MGC has ordered DraftKings to provide proof that it refunded the $83,000 in question to the 218 affected customers. The company must also commission an independent third-party audit to confirm no additional credit card deposits or wagers occurred between its temporary licensing date on February 23, 2023, and its official market launch on March 10, 2023.
In a statement to SBC Americas, a DraftKings spokesperson said: “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.”
The violations were publicly examined during a seven-hour MGC hearing in November 2024. DraftKings executives acknowledged a misinterpretation of the regulation, stating they believed the credit card ban applied only when customers were physically located within Massachusetts. That explanation drew sharp criticism from commissioners.
Commissioner Eileen O’Brien challenged DraftKings’ interpretation, referencing the statute’s explicit language: “A deposit into a sports wagering account shall not be made using a credit card.” During the hearing, she pressed DraftKings’ Senior Manager of Regulatory Operations, Kevin Nelson, questioning how the company could have overlooked the clear legal language.
The MGC decision pointed out that Massachusetts had made its stance on credit card use clear during multiple public meetings and through direct outreach to all operators. The commission also highlighted that DraftKings had previously implemented safeguards to block similar credit card activity in Tennessee, suggesting the company had the capability but failed to apply the same rigor in Massachusetts.
