DraftKings Fined for Credit Card Betting Violations

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00:00All right, so let's get to the very latest here, DraftKings facing a fine.

00:07It would appear, again, you can read about this over at legalsportsreport.com, and this

00:10is surrounding credit card funding in terms of accounts.

00:14So I know that some folks are trying to do this, and I know that this is frowned upon.

00:19So what exactly did DraftKings do wrong here?

00:22Yeah, some states allow you to fund your betting accounts with a credit card.

00:28Massachusetts doesn't.

00:29They're actually the first state to specifically pass a regulation saying, we're not going

00:33to allow credit card funded bets.

00:35But people have found a way around it, especially at DraftKings.

00:39There was this hearing this week, it lasted seven hours, and the commission has really

00:43kind of become known for these lengthy hearings.

00:46It actually continued an earlier hearing talking about the same issue, but DraftKings came

00:50out and said this, you know, we had over 1,000 bets that were funded with credit cards over

00:55the past year, about 218 accounts, and $83,000 were placed with credit cards.

01:01Essentially, these people found a loophole where they would go out of Massachusetts,

01:05go to a state where you can fund your DraftKings account with a credit card, and then drive

01:10back to Massachusetts and place the bet there.

01:12DK executives came out and said, you know, we misinterpreted the regulations wrong.

01:17We didn't necessarily think that because somebody placed it in another state, we had to do something

01:24to prevent them from using it in Massachusetts.

01:26You know, a lot of these apps have moved to kind of this one shared wallet, where if you

01:31do something in one state, it interacts with the other state.

01:33So that seems to be kind of what happened here.

01:35They said that they addressed it internally, kind of closing this loophole.

01:39But then, you know, as people always do, especially with the internet, and especially with bettors,

01:43they found another way around it, where they were then funding DraftKings pool contests

01:49with credit cards.

01:51So maybe, you know, some lack of oversight there, but they came out and said, you know,

01:55that's on us.

01:56We didn't, we did, we should have given more strict protocols here to kind of prevent everything

02:01that happened.

02:02Commission, not very happy about that.

02:03Some commissioners, you know, really hammering into them.

02:06If you have a problem with the regs, or you don't know how to interpret things, you need

02:09to come to us and ask.

02:11So this isn't the last we've heard of the story.

02:13You know, the commission could do pretty much whatever they want in these circumstances.

02:17They could kick DraftKings out of the state, but I don't think that's under any circumstances

02:22going to be what happens here.

02:23I'm sure there are some who would like to go further.

02:26But probably what's going to, this is going to result in is some requirements that they

02:30do certain oversight on this issue, and then maybe a big fine, sort of slap on the wrist

02:35kind of thing.

02:36But, you know, the commission has been pretty, you know, pretty hardcore, pretty gung ho

02:41in terms of regulating sports betting versus all the other states.

02:45So we'll see where they ultimately end up.

02:47But at the end of the day, probably not a huge, huge story here.

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