In July, the Massachusetts Gaming Commission (MGC) fined DraftKings $450,000 for allowing bettors to use funds deposited by credit cards in other states. Thursday, DraftKings announced that it is banning credit card deposits nationwide to its sports betting and online casino platform, effective Monday.
DraftKings will join Fanatics Betting & Gaming, Betr, and Sporttrade as wagering companies that do not allow credit card deposits. At least nine legal U.S. sports betting jurisdictions prohibit funding accounts via credit cards, including five of the six New England states. In addition, some banks, including Bank of America, do not allow patrons to use cards to fund accounts.
When the MGC fined DraftKings last month, it was the biggest fine to an operator since the Professional and Amateur Sports Protection Act was overturned in May 2018. The MGC’s investigation revealed a culture of confusion and protocol issues within the company. DraftKings executives said that while they understood that funding via credit card was illegal in Massachusetts, they did not understand that using funds from a credit card put into a mobile wallet in another state was also banned.
DraftKings appears to have the technology to sort out where funds came from within its universal wallet, and human error or misinterpretation seemed to be what ultimately led to multiple violations in Massachusetts.
Improved consumer protection
“DraftKings has made the strategic business decision to remove credit cards as a deposit option for sportsbook and casino in the United States,” a DraftKings spokesperson told InGame. “Customers can still fund their DraftKings Sportsbook and casino accounts using debit cards, bank transfers (ACH), wire transfer, and payment platforms like PayPal, Venmo or Apple Pay (with an eligible payment method, such as a debit card), where permissible.”
The company did not formally announce the move, instead communicating directly with customers to alert them. Beginning Monday, credit cards stored in customers’ mobile wallets will no longer be an active source of funding.
In states where credit card funding of wagering accounts is banned, the stated reason is usually for consumer protection. When customers fund an account with credit card funds, they may be charged a cash advance fee and, if the charge is not paid off at the end of the billing cycle, consumers are subject to high credit card interest rates.
