DraftKings Faces Adjudicatory Hearing for Massachusetts Credit Card Violations

DraftKings, known for its presence in the sports betting industry, is making headlines in Massachusetts for all the wrong reasons. The Massachusetts Gaming Commission (MGC) has taken stern action against the platform after it was revealed that DraftKings had inadvertently allowed users to use out-of-state credit cards for deposits, violating the state's strict gambling rules. Notably, Massachusetts prohibits gambling operators from accepting credit cards as a payment method.

DraftKings brought the issue to the MGC's attention in May, confessing that the error had allowed customers to use credit cards for betting starting from March 10. To rectify the situation, DraftKings implemented a tool to prevent credit card usage on its platform. However, it took until July 13 for this measure to function correctly. In the interim, 218 players used credit cards to place a total of 242 bets, amounting to $83,663.92 between March and July.

The company attributed the incident to internal miscommunication and claimed that this miscommunication persisted during attempts to rectify the situation. DraftKings had to make changes to three internal functions - its financial platform, account platform, and sportsbook product - before successfully prohibiting credit card usage.

MGC commissioner Eileen O'Brien expressed strong concern about DraftKings' negligence, emphasizing the need for an adjudicatory hearing. This violation represents a first of its kind in Massachusetts, and the regulatory authority is determined to prioritize the matter.

DraftKings is no stranger to legal troubles in Massachusetts, having recently faced criticism over a misleading promotion. The operator's failure to transparently communicate the terms of a $1,000 bonus offer led to a class-action lawsuit, further complicating its situation in The Bay State.