DraftKings Faces Massachusetts Sports Betting Review Over Credit Card Funding

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Massachusetts sports betting

DraftKings Sportsbook is facing a potential non-compliance review from state regulators after making an “egregious” error in allowing out-of-state credit card funding of Massachusetts sports betting wagers. 

Credit card funding of Massachusetts sports betting wagers is prohibited in the Commonwealth. Commissioner Eileen O’Brien called the error “egregious,” and believed an adjudicatory hearing is necessary. 

The Investigations and Enforcement Bureau (IEB) will be putting together its review, and scheduling on the matter is to be determined. 

Massachusetts sports betting error

Overall, DraftKings Sportsbook allowed 218 users to make 242 wagers totaling $83,663 in handle from March 10, 2023 through July 13, 2023

Despite telling the MA Gaming Commission during its initial license review that its universal wallet would not be an issue upon March 10 launch, the proper safeguards were not in place. 

“This is a violation of the statute, not a (regulation), the statue,” Commissioner Jordan Maynard said. 

Took two tries to get it right

After self-reporting it to the MGC, DraftKings thought the issue had been resolved in late May. However, its initial software update proved ineffective. A second software update resolved the matter. 

DraftKings said the errors were caused by miscommunication. 

The credit card ban was a key cog in Massachusetts lawmakers ultimately passing sports betting legislation

DraftKings also facing class action

The IEB will also monitor the class-action lawsuit against DraftKings. 

It was filed in Massachusetts last week over alleged “unfair and deceptive” bonus bet advertising. 

O’Brien said she would like to do a deeper dive into the complaint. 

Fanatics Sportsbook also facing review

Fanatics Sportsbook is also facing a review after taking a single $50 wager on Dec. 6 on a Boston College football bowl game set to take place on Dec. 28 at Fenway Park.

In-state college bets are banned in Massachusetts. The market was open for 18 hours, 50 minutes

While the review process will continue via an IEB summary, the commission was appreciative that Fanatics reported the incident quickly, it was isolated, and the event had not yet taken place. 

Therefore, an adjudicatory hearing may not be required, even though a fine could be issued.