DraftKings is making a major change to its payment processing rules.
The Boston-based sports betting and daily fantasy giant announced on Thursday plans to no longer accept credit card deposits for its sportsbook and casino operations in the U.S.
Starting Aug. 25, DraftKings customers will no longer be able to use credit cards as a method of payment as the company aims to help customers “avoid cash advance fees and higher interest rates” associated with credit card funding. DraftKings believes the change will improve the user experience for customers while also providing a layer of protection.
Customers who have previously used credit cards to fund their DraftKings accounts will have their stored credit cards disabled for funding with the operator later this month.
“DraftKings has made the strategic business decision to remove credit cards as a deposit option for sportsbook and casino in the United States,” a DraftKings spokesperson told SBC Americas. “Customers can still fund their DraftKings Sportsbook and casino accounts using debit cards, bank transfers (ACH), wire transfer, and payment platforms like PayPal, Venmo or Apple Pay (with an eligible payment method, such as a debit card), where permissible.”
In addition to DraftKings, media and sports betting business Betr also bans credit cards.
DraftKings pays hefty fine for credit card violations
DraftKings is eliminating credit card deposits to help customers, but the timing comes in the wake of a recent regulatory penalty for allowing customers to deposit with credit cards in a state where the method of payment is prohibited. Last month, the Massachusetts Gaming Commission fined DraftKings $450,000 for multiple credit card deposits by customers in 2023 and 2024.
Active Massachusetts gaming law bans credit card funding for any type of gambling. The law also excludes credit card deposits made in a state where credit cards are allowed if the user is trying to bet from within Massachusetts.
DraftKings self-reported its violations on three separate occasions and blamed the violation on an internal miscommunication. The operator reported that it had accepted more than $83,000 in credit card funds. The Massachusetts gaming regulator also required DraftKings to return the funds to the 218 customers who improperly used credit cards for wagering.
DraftKings was also required to provide proof of the returns and conduct a third-party audit to ensure that no other credit card deposits were made on Massachusetts accounts.
The audit spanned DraftKings’ entire presence in Massachusetts, which started in 2023.
State laws on credit card funding for sports betting
Despite its violation, DraftKings has successfully prohibited credit card deposits in Tennessee, an online-only market that also bans credit card funding for sports wagering.
Iowa, New Hampshire, Oregon, Rhode Island and Vermont also implement laws that ban credit card deposits. In Illinois, the state’s gaming regulator adopted a policy to ban credit cards to fund gaming accounts for online sports betting.
The Illinois Gaming Board (IGB) adopted the new rule after a review of its wagering practices ahead of its five-year mark as a regulated online sports betting market.
The IGB also bans credit cards to fund casino and video gaming wagers.
