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<\/div>\nThe Massachusetts Gaming Commission has just handed down its biggest sports betting penalty yet, hitting DraftKings with a $450,000 fine for letting customers fund bets<\/a> with credit cards, which is against state law.<\/p>\n According<\/a> to the body, DraftKings failed to stop this kind of funding between March 10, 2023, and February 13, 2024. In that time, 218 customers placed a total of 1,160 improper wagers, using $83,667.92 in credit card deposits.<\/p>\n The decision comes as Connecticut also investigated the company, with DraftKings agreeing to return $3 million<\/a> to 7,000 Connecticut consumers who participated in certain bonus offers.<\/p>\n \u201cThis series of non-compliance incidents was a serious violation of statute and regulations upon which the Commission provided express advance instruction to DraftKings,\u201d the commission wrote in its July 25 decision. Even though the rule against using credit cards was clearly spelled out and discussed publicly more than once, DraftKings still allowed it to happen.<\/p>\n It\u2019s been 1 year since we launched @DKSportsbook<\/a> in Massachusetts, and we\u2019re still celebrating!<\/p>\n Since January 2023, we have launched in Vermont, Ohio, Kentucky, Massachusetts, and Maine and will launch in North Carolina tomorrow. — DraftKings News (@DraftKingsNews) March 10, 2024<\/a><\/p>\n<\/blockquote>\n The issue came down to ongoing communication failures inside the company and technical fixes that didn\u2019t work as promised. DraftKings first told the commission about the problem on May 31, 2023, admitting it had been happening since their launch in March. Two more incidents were later reported on July 14, 2023, and again on February 13, 2024.<\/p>\n In July 2023, Paul Liberman, DraftKings\u2019 president and co-founder, signed a sworn statement claiming the company \u201cis prohibiting any use of credit cards to place Sports Wagers on its sports wagering platform in Massachusetts, including without limitation funds deposited into a player wallet using a credit card while located outside of Massachusetts.\u201d Still, the issue didn\u2019t go away, and credit card-funded wagers kept slipping through.<\/p>\n DraftKings said the problem started with \u201can internal communication breakdown\u201d and claimed that an email from MGC Executive Director Karen Wells was misunderstood. But the commission didn\u2019t buy that. They stated, \u201cDespite framing the matter as a \u2018misunderstanding\u2019 or an \u2018anomalous series of events,\u2019 it is undisputed that DraftKings\u2019 actions and inactions constitute both statutory and regulatory violations.\u201d<\/p>\n What really raised eyebrows was the fact that DraftKings already had a system in place to block credit card use in Tennessee but didn\u2019t apply it in Massachusetts. \u201cThis structure appears to have permeated these non-compliance events,\u201d the commission noted.<\/p>\n Besides the fine, DraftKings now has a list of tasks to complete. They have to show proof that the $83,667.92 was returned to the 218 customers affected. They must also create a corrective action plan to improve internal communication and prevent this kind of violation from happening again.<\/p>\n And on top of that, they\u2019re required to hire an independent third-party auditor to examine any credit card-funded activity between February 23, 2023, when DraftKings got its temporary license, and March 10, 2023, when betting officially launched in the state.<\/p>\n The commission acknowledged that DraftKings \u201cself-reported to the Commission\u201d each time it discovered a problem, but stressed that these reports came \u201cafter repeated representations by DraftKings that fixes they had implemented were later reported to have failed.\u201d<\/p>\n The ruling was signed off by all five commissioners: Jordan Maynard, Bradford R. Hill, Eileen M. O\u2019Brien, Nakisha L. Skinner, and Paul Brodeur. In its conclusion, the commission said, \u201cInformation [must] be promptly and widely shared internally within the operator\u2019s organization.\u201d It added, \u201cThe Commission is further seriously troubled by the level of internal miscommunication at DraftKings.\u201d<\/p>\n The fine is said to be the largest enforcement action since sports wagering became legal in Massachusetts in 2023.<\/p>\n ReadWrite has reached out to DraftKings for comment.<\/p>\n Featured image: DraftKings<\/em><\/p>\n The post Massachusetts hits DraftKings with record $450K fine for accepting credit card bets<\/a> appeared first on ReadWrite<\/a>.<\/p>\nDraftKings slapped with largest sports gambling fine in Massachusetts<\/span><\/h2>\n
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pic.twitter.com\/pQuag7HKXO<\/a><\/p>\n‘Internal communication breakdown’<\/span><\/h2>\n