MGC Fines DraftKings $450K for Credit Card Betting Breaches

The Massachusetts Gaming Fee (MGC) has fined DraftKings $450,000 for failing to stop the usage of bank card funds in on-line sports activities betting—an specific violation of the state’s playing legal guidelines. The breach, which spanned from March 10, 2023, to February 13, 2024, concerned greater than 1,100 bets positioned by 218 prospects utilizing 242 bank card deposits totaling $83,667.92.

Regulators Cite Persistent Violations and Systemic Lapses

Based on the noncompliance determination [pdf] revealed on the MGC web site, DraftKings, working below a brief Class 3 license in Massachusetts, acknowledged three separate compliance failures throughout this era and self-reported every to the Fee. Nevertheless, the MGC dominated that the operator’s corrective measures have been repeatedly ineffective, elevating severe issues over inside miscommunication and oversight.

Based on the MGC’s official ruling dated July 25, 2025, the violations occurred regardless of direct steering issued to DraftKings and different operators earlier than the launch of Massachusetts’ sports activities betting market. Then-Government Director Karen Wells had contacted all licensees in January 2023 to remind them that bank card funding was strictly prohibited. This directive, nonetheless, was not correctly relayed inside DraftKings.

DraftKings first recognized the problem in Might 2023 and carried out a software program patch. When that repair failed, the corporate submitted one other replace in July 2023. But once more, the prohibition remained ineffective. Lastly, in February 2024, DraftKings reported that two wagers have been mistakenly positioned utilizing bank card funds in its Swimming pools product, revealing that the problem had continued longer than beforehand believed.

A DraftKings spokesperson commented, “We’re devoted to upholding the regulatory requirements set by every state and jurisdiction during which we function, and we worth the productive and collaborative relationships we’ve constructed with regulators.” The corporate additionally confirmed it had since been granted a everlasting license in Massachusetts.

Audit Ordered and Refunds Mandated

Alongside the wonderful, the MGC ordered DraftKings to refund the complete $83,667.92 to the affected prospects and submit a corrective motion plan to stop related breaches. The corporate should additionally fee an audit by an impartial third occasion authorized by the Fee to look at transactions between its license acquisition on February 23, 2023, and sportsbook launch on March 10, 2023, to confirm that no extra violations occurred throughout that point.

The Fee harassed that though DraftKings reported the incidents voluntarily, the repeated failures to implement efficient corrections over practically a yr compounded the severity of the matter. “Regardless of framing the matter as a ‘misunderstanding’ or an ‘anomalous sequence of occasions,’ it’s undisputed that DraftKings’ actions and inactions represent each statutory and regulatory violations,” the MGC wrote.

Throughout a November 2024 adjudicatory listening to, Commissioner Eileen O’Brien criticized the corporate’s interpretation of the statute. In response to DraftKings’ declare that the ban solely utilized to deposits made inside Massachusetts, O’Brien challenged, “It’s not there, is it, Mr. Nelson?”—highlighting the clear statutory language that prohibits any use of bank cards for sports activities betting accounts.

Whereas the MGC discovered grounds to droop or revoke DraftKings’ license, it opted for a monetary penalty and corrective measures because of the operator’s transparency and cooperation. The wonderful is the biggest the MGC has issued towards a licensed sportsbook because the market’s launch in 2023.