DraftKings Facing Allegations on Wagering Failures

A leading US sports wagering operator, DraftKings has allegedly committed the violation of a Massachusetts state law governing the use of credit cards for placing bets with operators across the state. The Massachusetts Gaming Commission (MGC) will reportedly hold an adjudicatory hearing in the near future to weigh the penalty for the alleged breach.

Allegations:

As Sports Handle reports, DraftKings has allegedly allowed credit card deposits made in other states to fund sports betting accounts active with the DraftKings’ operations in Massachusetts. According to the MGC, such an activity represents a violation of both the gambling regulations and the state law. Commissioner Eileen O’Brien reportedly commented: “For me this is egregious, and I think it should be an adjudicatory hearing.” Commissioner Jordan Maynard reportedly added: “I just would add that this is a violation of the the statute. Not just the regs — the statute.” As reported, the commission will summon a hearing for the case.

According to allegations, DraftKings allowed the disputable use of credit card deposits for sports betting in the state from March 10 until May 30, 2023. The operator reportedly notified the commission on May 31 accordingly, assuring that its proprietary wallet and geolocation services would lock credit card funds coming from the other states. But this reportedly didn’t happen. According to the source, DraftKings updated the software on June 21 and notified the commission that the out-of-state funds had been locked as of May 31 but discovered on July 13 that the software update was ‘’ineffective,’’ as the operator acknowledged.

Software Update Failure:

Staff attorney Zachary Mercer presented the report to the commission indicating that “appropriate safeguards were not, in fact, in place, upon launch” of the subject wagering campaign ran by DraftKings. As reported by Sports Handle, it was after the second update made on July 13, 2023 that the subject funds were blocked. DraftKings reported that both mistakes had resulted from the failures in internal communication. According to Mercer, the company identified the “root cause of the failed update as a lack of complete functionality testing” and took a comprehensive corrective action including the complete functionality testing after software updates.

As the source reports, DraftKings accepted 243 bets from 218 customers in the total amount of $83,663.92 during the four-month window, with these funds reportedly referring to the company’s alleged failure related to credit card deposits.

Fanatics’ Self-Reported Failure:

The MGC was made aware of the case on 14 December 2023. As reported, MGC was also made aware of the alleged violation of the state regulations regarding wagering on local college teams. Fanatics Sportsbook reportedly self-reported that it had mistakenly accepted bets for the Dec. 28 game between Boston College and Southern Methodist for extended hours on December 5. The operator remedied the mistake on December 6 and closed the wagering process reporting that it will prevent such problems in the future. As Sports Handle reports, the commission did not take any action on the alleged violations but announced that it will take these into consideration next year.