Key Points
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Regulatory Trouble and the Massachusetts Fine:
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In July, DraftKings was fined $450,000 by Massachusetts regulators for allowing users to gamble with credit cards. This fine came after the state identified the risks
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associated with consumers being able to bet on credit, which can lead to excessive gambling and debt accumulation.
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This regulatory trouble was a major catalyst for DraftKings’ decision to prohibit credit card payments across the U.S. They want to avoid the same issues in other
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jurisdictions and ensure compliance with local and state-level regulations.
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Widespread Industry Trend:
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DraftKings is not alone in blocking credit cards for gambling. Other companies, including Fanatics Betting & Gaming and Betr (a company backed by Jake Paul), have also moved to restrict credit card payments. This suggests that the industry is becoming more aligned on this issue, likely to avoid regulatory penalties and reduce the risk of consumer harm.
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Alternative Payment Services: The ban extends beyond just credit card payments; it also applies to alternative payment methods like e-wallets that are funded by credit cards. This ensures that players can’t circumvent the restriction by using a third-party service to fund their accounts indirectly.
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