Massachusetts Delays DraftKings’ Hearing After New Evidence Unearthed

The Massachusetts Gaming Commission (MGC) delayed an adjudicatory hearing with DraftKings Sportsbook after new evidence was revealed.

The meeting was set to discuss DraftKings illegally allowing customers to deposit funds into their accounts through the use of credit cards, which is illegal according to the state’s gaming laws. Users were able to deposit funds via credit card from March 10, 2023, through July 13, 2023. 

However, DraftKings self-reported two previously unannounced cases in which customers deposited money into their accounts using credit cards, thus prompting a delay.

Massachusetts online sports betting launched on March 10, 2023, the day the first instance of a DraftKings customer depositing funds via credit card was reported. It would be another four months before the company’s error would be remedied, based on the provided information.

A total of 218 users placed 242 bets worth a total of $83,663.92 with funds from out-of-state credit cards. DraftKings self-reported the issue on May 31, 2023, but did not immediately fix the issue as a software update failed to stop credit card deposits.  

The Investigations and Enforcement Bureau (IEB) will handle the investigation into the two newly-reported incidents. 

“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,” said MGC chair Cathy Judd-Stein.

The case may still have more twists and turns even after these two investigations are closed. According to Justin Stempekc, MGC deputy counsel, DraftKings, headquartered in Boston, also permitted customers to make credit card deposits from August-September in 2023 and again in January 2024.

A new hearing will not be held until all of the companies’ infractions and case evidence have been brought to light, and the IEB’s investigations are concluded. 

A date for the next hearing has not been announced. 

“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,” said MGC Commissioner Nakisha Skinner. “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 piecemeal.”

This is not the first time that DraftKings has been in hot water in Massachusetts. It previously accepted bets on events not approved in Massachusetts, including an unauthorized UTR pro tennis match, and later promoted a “Never Forget” parlay on the anniversary of the September 11 terrorist attacks that encouraged users to bet on New York teams.

Meanwhile, the Massachusetts gaming market is preparing for an internal shake-up. The MGC recently granted WynnBET and micro-betting platform Betr the right to withdraw from the state market in February.

WynnBET informed its users on Monday that it will close up shop, and all users have 30 days to withdraw money from their accounts before they are permanently closed. 

Both platforms struggled to gain traction in Massachusetts, a state in which 80% of the online sports betting market frequented either DraftKings or FanDuel. 

WynnBET sponsors the Encore Boston Harbor casino and will continue business as usual there.

“This will have no impact on the WynnBET Sportsbook at Encore Boston Harbor, nor will there be interruption or change in sportsbook operations,” said Seth Medvin, WynnBET’s assistant vice president of marketing and communications.

Betr didn’t even reach a $500,000 handle and only made $37,991.32 in taxable gaming revenue in December, according to the MGC’s revenue report.