Massachusetts Regulators Slap DraftKings with $450K Fine for Taking Credit Card Bets

^{Despite receiving such a large fine for betting violations, DraftKings still proceeded to receive a five-year sports betting license in Massachusetts. (Photo: Timon Schneider / Alamy)}

The Massachusetts Gaming Commission (MGC) issued a $450,000 fine to online sports betting firm DraftKings after finding that the company had accepted wagers via credit card payments in violated of state gaming laws. 

The fine, which was determined on July 25, is the largest issued by the MGC since legalized sports betting began in the state in 2023.

DraftKings Failed to Stop Credit Card Deposits After Acknowledging Issue

According to regulators, DraftKings knowingly accepted $83,667.92 in deposits from 218 different credit cards despite a ban on credit card wagering being considered a fundamental “tenet” of the sports betting law passed in 2022.

DraftKings self-reported the violation on May 21, 2023, about two months after online sports betting had been launched in Massachusetts. At that time, the company told the MGC that it had fixed the issue via a software update. However, DraftKings later acknowledged in July that it had not completely fixed the problem. 

“There is a preponderance of evidence showing that these violations occurred. In fact, DraftKings does not dispute any of the relevant facts,” the MGC ruling reads. “DraftKings contends that its noncompliance was based on a fundamental misunderstanding of the prohibition at issue and did not constitute purposeful contravention of the law.”

Apparently, DraftKings still hadn’t completely solved their payment processing issues even in July 2023. According to the MGC ruling, users were still able to deposit funds from credit cards on both Aug. 18, 2023, and Jan. 13, 2024.

“Even after discovering this non-compliance, DraftKings repeatedly failed to implement successful corrections to its platform to remedy the issue for nearly a year while also repeatedly reporting that the issue had been resolved,” the commission wrote.

Along with the $450,000 fine, the MGC is also requiring DraftKings to prove that it has returned all credit card bets to customers, conduct and independent audit of its systems, and develop a corrective action plan.

MGC Awards Five-Year License to DraftKings

But the news wasn’t all bad for the sports betting giant. At the same meeting, the MGC also awarded DraftKings a five-year license for online sports betting, which follows the one-year temporary license that the company had been operating under. The company will pay a $5 million licensing fee as well as 20 percent tax on its gross sports wagering revenues. 

“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,” a spokesperson for DraftKings told Boston.com. “DraftKings extends its sincere thanks to the Massachusetts Gaming Commission for granting us a permanent license to operate in the Commonwealth.”

While the $450,000 fine marks the largest penalty issued by the MGC to an online sports betting operator, the regulatory body has doled out larger punishments to land-based casinos in the past. In 2019, the MGC issued a $35 million fine to Wynn Resorts for failing to disclose sexual misconduct allegations made against Steve Wynn.

DraftKings is no stranger to paying fines in the emerging online sports betting markets across the United States. In November 2024, the Ohio Casino Control Commission issued a $425,000 fine to DraftKings for violations of its law against offering individual college player prop bets.