Ohio fines DraftKings $425K as Massachusetts subjects it to a marathon hearing over credit card-funded wagers. [Image: Shutterstock.com]
Violations in two states
Lawyers for DraftKings are clocking up the hours this week after regulators in both Ohio and Massachusetts brought the Boston-based sportsbook to task for multiple violations.
violations came with a $425,000 fine
On Wednesday, the Ohio Casino Control Commission (OCCC) approved a settlement deal with DraftKings over two compliance violations that came with a $425,000 fine.
The hefty penalty includes taking bets on college player props between March 14 and March 19, a market the OCCB banned starting March 1. The second violation was for allowing bettors to use unapproved sources to fund their sports wagering accounts.
The OCCB’s notice of violation stated the sportsbook permitted bettors to fund their online sports betting accounts via cash deposits at “non-gaming retail locations.” Ohioans can only fund such accounts via OCCB-approved cashiering or kiosk outlets.
The regulator identified 40,985 deposits made via non-compliant outlets from January 1, 2023 through March 5, 2024, totalling $2,545,927.76.
Also on Wednesday over in New England, the Massachusetts Gaming Commission made DraftKings squirm through a marathon hearing.
One for the record books
According to regulatory journalist Robert Linnehan, the MGC subjected DraftKings to “the longest adjudicatory hearing for an operator since the state launched sports betting.”
The near seven-hour hearing in DraftKings’ home state followed a prior three-hour grilling on September 20. Both sessions concentrated on one issue, namely that DraftKings incorrectly permitted customers to place over 1,000 bets via credit card funds from March 10, 2023 through February 14 of this year.
allowed 218 customers to place 1,160 sports bets online via credit card funds
According to the MGC, DraftKings erroneously allowed 218 customers to place 1,160 sports bets online via credit card funds “for a total handle of $83,663.92.”
While DraftKings does in fact bar Massachusetts customers from using a credit facility to fund online sports betting accounts, it got caught out by the 218 customers who funded their accounts via credit cards in other states before placing bets from within the commonwealth.
While the MGC prohibits the use of any credit card funds to place bets online, the DraftKings representatives interviewed during the hearing “all seemed to incorrectly interpret” the rule.
Made to squirm
DraftKings Senior Manager of Regulatory Operations Kevin Nelson was made to squirm after he told the hearing that he read the credit card prohibition regulation as “specific to Massachusetts.”
Commissioner Eileen O’Brien showed the DraftKings exec the specific MGC regulations. She then asked Nelson to show the hearing where regulations said credit card use was only prohibited within Massachusetts boundaries. As Nelson scanned the regulations, O’Brien chided him, stating:
It’s not there, is it Mr. Nelson?”
Jeremy McAuley, DraftKings’ Director of Products, also got roasted by O’Brien for not seeking clarity on the matter and assuming the rule only applied to the Commonwealth.
The hearing ended with a final decision by the MGC still pending.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
