A Massachusetts bettor will collect nearly $1 million in winnings after state regulators ruled Thursday that DraftKings (NASDAQ: DKNG) must pay for its own mistake.
Commissioners rejected the sports betting company’s request to cancel wagers placed during October’s American League Championship Series. The unanimous decision forces DraftKings to honor a $934,147 payout stemming from a technical glitch in its betting platform.
The dispute centers on 27 parlays a customer placed on October 15 targeting Toronto Blue Jays player Nathan Lukes’ hit totals. DraftKings marked Lukes as a “non-participant” in its system, allowing bettors to combine normally prohibited correlated bets — whether Lukes would record 5, 6, 7, or 8-plus hits in the series — into single wagers paying inflated odds.
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Lukes finished with nine hits across seven games against Seattle. The bettor won 24 of 27 parlays after wagering $12,950.
DraftKings discovered the error the next day and sought regulatory permission to void portions of the bets. The company proposed paying $95,742.53 instead of the full amount.
“It’s the cost of doing business,” Commissioner Nakisha Skinner said in denying the request. “You have to be diligent in your offerings…this is an obvious error for DraftKings. The in-house controls should have caught this error.”
DraftKings told commissioners the customer acted suspiciously, depositing nearly $13,000 on October 15 — almost twice their lifetime deposits of $7,000—and placing the parlays rapidly. Pete Harrington, DraftKings’ legal director, characterized the activity as fraudulent.
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“For all intents and purposes, we believe this customer was engaging in fraud. It’s deceptive behavior, with the intention to unethically gain at DraftKings’ expense,” Harrington told the Massachusetts Gaming Commission.
Commissioner Eileen O’Brien criticized DraftKings for making fraud allegations that it had not previously submitted to regulators.
State regulators reached different conclusions. Pennsylvania approved DraftKings’ request to void the correlated selections, while New Jersey ordered full payment at accepted odds.
Thursday’s meeting also saw commissioners approve first-in-the-nation regulations requiring sports betting operators to notify customers when they impose wagering limits and explain why.
Massachusetts previously allowed DraftKings to void roughly $575,000 in winnings from incorrect NBA statistics in November 2023, though regulators required the company to compensate affected bettors at triple their original stakes.
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