Massachusetts‘ gaming regulator handed down its verdict on DraftKings after the operator unintentionally allowed customers to deposit with credit card funds and use them to gamble in violation of state law.
The Massachusetts Gaming Commission (MGC) confirmed it has fined the Boston-based operator $450,000 for multiple incidents that occurred in 2023 and 2024.
DraftKings had three separate non-compliance incidents
The Massachusetts statute that legalized online sports betting does not allow operators to accept deposits or wagers via credit card, even if the deposit was made in a state in which credit card deposits are allowed. DraftKings discovered and self-reported violations of this law three separate times, once in May 2023, again in July 2023 and finally in February 2024.
DraftKings believed it had resolved the issue after the first period of incidents, beginning on its go-live date in March 2023 and lasting until May 31. It blamed that initial transgression on an internal miscommunication. After later finding that its attempted software fix had failed, it self-reported again. The third and final report came after DraftKings discovered it had mistakenly accepted two additional violating wagers on its Pools product, spread five months apart.
In total, DraftKings accepted more than $83,000 in credit card funds. In addition to the fine, the MGC has ordered the gaming giant to provide proof that those funds were returned to the 218 relevant customers and to conduct an independent third-party audit to verify that no other money was deposited and/or wagered via credit card on Massachusetts accounts between it acquiring its initial temporary license in the Bay State on Feb. 23, 2023, and going live in the market on March 10, 2023.
“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 DraftKings spokesperson told SBC Americas in response to a request for comment.
DraftKings grilled in seven-hour hearing
Last November, the violations were the topic of a mammoth seven-hour-long MGC hearing which revealed some of the details of the infractions. DraftKings executives testified that the company realized that it had not properly understood the regulation and failed to prevent credit card deposits from other states from being used for wagering in Massachusetts.
In its written decision dated July 24, 2025, and signed by Chair Jordan Maynard and his fellow commissioners, the MGC noted that the state’s stance on the use of credit cards was discussed during numerous public meetings and then-Executive Director Karen Wells “went so far as to contact every Category 3 sports wagering operator to confirm their compliance with the credit card prohibition prior to launching their platforms in Massachusetts.”
However, at the November hearing, DraftKings’ Senior Manager of Regulatory Operations Kevin Nelson stated that the company incorrectly believed that the ban only applied to funds deposited while customers were physically located in Massachusetts. That drew scorn from Commissioner Eileen O’Brien during the meeting.
“I’d like you to tell me where the words are, the restricting words ‘while physically located in Massachusetts’ or ‘located’,” she challenged Nelson, reading out numerous subsections of the relevant statutes. “It’s not there, is it, Mr. Nelson?” she asked later. She then read out the language of a subsection of the statute, placing heavy emphasis on the fact that “a deposit into a sports wagering account shall not be made using a credit card.”
“Did you read that?” she asked.
MGC stresses seriousness of issue, commends DraftKings’ self-reporting
“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 MGC wrote in its decision. It pointed to DraftKings’ own acknowledgement that it previously implemented controls to prevent the use of out-of-state credit card funds in Tennessee, which legalized sports betting before Massachusetts.
“Despite framing the matter as a ‘misunderstanding’ or an ‘anomalous series of events,’ it is undisputed that DraftKings’ actions and inactions constitute both statutory and regulatory violations,” added the Commission. It rejected DraftKings’ argument of statute misinterpretation.
While the MGC noted that it had the right to suspend or revoke DraftKings’ license over the issue, it found the fine, the return of credit card funds and other measures to be suitable, in light of the fact that DraftKings self-reported each violation and failed tech fix.
