DraftKings’ Massachusetts Adjudicatory Hearing Delayed Following New Information

Sep 12, 2015; Dallas, TX, USA; A general view of the DraftKings sign board during the match with FC Dallas playing against New York City FC at Toyota Stadium. Mandatory Credit: Matthew Emmons-USA TODAY SportsA Massachusetts Gaming Commission adjudicatory hearing for DraftKings has been delayedDraftKings allegedly allowed users to fund sports bet in the Massachusetts from March 10, 2023, through July 13, 2023Additional evidence has come to light that necessitates further investigation

An adjudicatory hearing for DraftKings has been delayed in Massachusetts.

The hearing was scheduled for the Massachusetts Gaming Commission to render a decision on DraftKings mistakenly allowing customers to use credit cards to fund sports bets. The use of credit cards to fund sports betting accounts or bets in the commonwealth is prohibited.

Yesterday, DraftKings self-reported two additional instances to the MGC of customers using credit cards to fund bets. The MGC unanimously agreed to delay the hearing until the Investigations and Enforcement Bureau (IEB) could investigate the new occurences.

Two More Credit Card Funding Instances

MGC Chair Cathy Judd-Stein revealed that DraftKings yesterday self-reported two additional instances of users funding bets through the use of credit cards. The commission unanimously agreed to allow the IEB to investigate the new instances before holding the full hearing.

“I leave it now for IEB to do their job and for legal to coordinate with DraftKings. We’ll stand ready for this hearing on this very critical matter,” Judd-Stein said.

Justin Stempeck, deputy general counsel for the MGC, revealed that DraftKings also allowed users to fund bets with credits cards for an indeterminate amount of time from August to September of 2023 and again in January of 2024.

All the facts need to come to light before a hearing can commence, Commissioner Nakisha Skinner said.

“I’m hoping that along with IEB’s continued investigation we understand from the operator and have assurances that this is the extent of it. It is troubling that we first learned about this issue almost a year ago that there have been new and frequent developments. I want to be assured that we have all the facts before us, to consider them, and consider them at the same time instead of piece meal,” she said.

A date on the hearing has yet to be set.

Original Instances Revealed in December

In December, the MGC unanimously approved the adjudicatory hearing for the sports betting company after DraftKings mistakenly allowed 218 users to place 242 bets funded through “out-of-state credit card funds” for a total of $83,663.92.

DraftKings self-reported the incident to Bruce Band, director of sports wagering for the Massachusetts Gaming Commission (MGC), on May 31, 2023. The sports betting operator notified Band that they had mistakenly been allowing customers to fund bets with credit cards since March 10. A DraftKings rep revealed there was an “internal miscommunication” and safeguards were never in place to prohibit credit card usage.

Massachusetts statute specifically prohibits the use of credit cards to make bets or fund sports betting accounts.

DraftKings updated its software to put the necessary credit card prohibitions in place on May 31. However, the update was ineffective due to a “lack of complete functionality testing” and the prohibition never went into place. The mistake was not immediately detected and the allowance of credit cards to fund bets was allowed through July 13, 2023, until DraftKings noticed the error. The software was updated on that date and this time it was effective.