DraftKings, a Boston-based sportsbook, is facing scrutiny and fines in both Ohio and Massachusetts for violating regulations. In Ohio, the Ohio Casino Control Commission (OCCC) approved a settlement deal with DraftKings that included a $425,000 fine for two compliance violations. These violations included taking bets on college player props after they were banned and allowing bettors to use unapproved sources to fund their accounts.
The OCCC found that DraftKings allowed bettors to make cash deposits at non-gaming retail locations, which was against regulations. A total of 40,985 deposits were made through non-compliant outlets, amounting to $2,545,927.76. In Massachusetts, the Massachusetts Gaming Commission conducted a marathon hearing with DraftKings, marking the longest adjudicatory hearing for an operator since the state launched sports betting.
The hearing focused on DraftKings’ incorrect interpretation of regulations that led to customers placing over 1,000 bets using credit card funds. Despite prohibiting Massachusetts customers from using credit cards to fund accounts, DraftKings allowed 218 customers to place 1,160 sports bets using credit card funds from other states. The MGC found that DraftKings representatives incorrectly interpreted the regulations.
During the hearing, DraftKings Senior Manager of Regulatory Operations, Kevin Nelson, admitted to misinterpreting the credit card prohibition regulation as specific to Massachusetts. Commissioner Eileen O’Brien challenged Nelson to show where the regulations stated that credit card use was only prohibited within Massachusetts boundaries. The hearing ended with a final decision pending from the MGC.
Overall, DraftKings is facing fines and scrutiny in both Ohio and Massachusetts for violating compliance regulations. The company’s incorrect interpretation of regulations regarding credit card funding has led to a lengthy hearing in Massachusetts and a significant fine in Ohio. The outcome of these regulatory actions will have implications for DraftKings and the wider sports betting industry.