Here Are The Legal Issues DraftKings Is Facing In Massachusetts

Written By C.J. Pierre on December 21, 2023 - Last Updated on December 27, 2023
Gavel, calculator and money behind logo for DraftKings, which faces legal issues in Massachusetts

DraftKings Sportsbook is as strong as it has ever been. Sports betting is being legalized in more and more states nationwide, and the Boston-based company is benefiting.

For the fiscal year 2024, DraftKings expects to bring in revenue totals of $4.5 billion to $4.8 billion. One of the primary reasons for that cash flow is because of the home-field advantage the operator gets from the Massachusetts sports betting market where it is by far the No. 1 most profitable MA sportsbook.

However, DraftKings climb to the top of the sports betting food chain hasn’t been without controversy. The company has been the culprit of several regulatory violations. In fact, there are ongoing investigations that could put the operator in even more hot water.

MA regulators investigating DraftKings over credit card payment issue

The Massachusetts Gaming Commission (MGC) has been one of the more stern figures when dealing with DraftKings Sportsbook Massachusetts and hasn’t given the company any form of a hometown discount. Now, the commission is looking into DraftKings’ operations again. This time, over an issue related to credit cards.

The MGC says DraftKings allegedly allowed credit card deposits made in other states to fund sports betting accounts active in Massachusetts. The commission says that is a violation of state gambling regulations and state law.

Reportedly, 218 users placed a total of 242 bets involving out-of-state credit card funding over the course of four months. The total amount wagered was $83,663, including all bets. DraftKings claims the mistakes were a result of internal miscommunications, a software update failure and insufficient testing. The company also told the commission that it implemented several fixes to avoid similar issues.

The MGC has requested an adjudicatory hearing on the matter in the future. Since this is a violation not just of regulation but the statute that legalized it, the penalty DraftKings may face could be severe.

DraftKings facing class action lawsuit in Massachusetts over bonus ads

There is another compliance failure DraftKings is under fire over. The Public Health Advocacy Institute (PHAI) announced a class-action lawsuit against DraftKings and a recent promotional strategy. The suit was filed in Massachusetts’s Middlesex Superior Court on behalf of two Massachusetts bettors.

The complaint claims the operator misled customers into believing they would receive a $1,000 bonus bet after depositing money into an account.

“(Our clients) are typical of many thousands of people in Massachusetts who were misled by the bonus offer and would not have signed up had they understood DraftKings’ unfair and deceptive requirements,” said PHAI Executive Director Mark Gottlieb.

The DraftKings $1,000 bonus bet offer requires customers to deposit $5,000 into an account and wager $25,000 within 90 days in order to get the full value of its offering among Massachusetts sportsbook promos. The complaint outlines that it was only revealed after signing up that the players must gamble with at least $25,000 to unlock the welcome bonus.

The complaint alleges, “DraftKings knew, or should have known, that its advertisement and promotion was deceptive to their target customers, who were new to sports betting and were extremely unlikely to understand the gambling lingo in the fine print.”

DraftKings has denied the accusations that the company misled customers and claims to be ready to defend the allegations in court if needed.

Photo by PlayMA
C.J. Pierre Avatar
Written by
C.J. Pierre

C.J. Pierre is a Lead Writer at PlayMA. He has been covering news and sports for over a decade for both online and TV broadcasts. He was born and raised in Minneapolis and an alum of Minnesota State University: Moorhead. He recently dove into tribal casino news. He also covered the launch of sports betting in Arizona. C.J. has experience as a reporter and videographer and has covered high school, college and professional sports throughout his career. Most notably following Arizona Cardinals, Phoenix Suns, Minnesota Vikings and North Dakota State University football.

View all posts by C.J. Pierre
Privacy Policy