Regulators reject DraftKings’ bid to void payouts

A costly sportsbook screwup left DraftKings on the hook for nearly $1 million after Massachusetts regulators ordered the payouts tied to a botched MLB parlay scheme.

The Massachusetts Gaming Commission voted 5-0 on Thursday to reject DraftKings’ bid to void $934,137 in payouts stemming from a series of correlated parlays placed during MLB’s 2025 American League Championship Series, according to an external report.

How the bettor exploited a configuration error

A Massachusetts customer wagered $12,950 total across 27 multi-leg parlays on Toronto Blue Jays player Nathan Lukes, exploiting an internal DraftKings configuration error that allowed the bettor to stack multiple versions of the same bet into one wager.

Because of a misclassification inside DraftKings’ trading tools, Lukes was incorrectly labeled a “non-participant” rather than an active player. That designation disabled safeguards designed to block bettors from parlaying correlated outcomes from the same market.

As a result, the bettor was able to combine multiple Lukes hit thresholds — including 5+, 6+, 7+ and 8+ hits — into single parlays, functionally creating an inflated wager on Lukes recording eight or more hits at dramatically enhanced odds.

The bettor also added unrelated, high-probability legs, including NFL moneyline bets, to further juice payouts.

Lukes’ performance and parlay results

Lukes ultimately appeared in all seven games and finished the series with nine hits, clearing every threshold.

Of the 27 parlays placed, 24 hit cleanly. Only three lost due to unrelated college football legs involving Clemson, Florida State and Miami.

DraftKings’ objections and commission pushback

DraftKings told regulators the bets should never have been accepted and argued the patron acted unethically by taking advantage of an obvious error.

Commissioners flatly rejected that argument.

The wagers were tied to DraftKings’ “Player to Record X+ Hits in Series” market during the seven-game ALCS between Toronto and Seattle.

During a heated exchange at Thursday’s commission meeting, DraftKings executive Paul Harrington accused the patron of fraud and unethical conduct.

Commissioners bristled. One of them, Eileen O’Brien, blasted DraftKings for casting aspersions on the bettor without evidence and said the situation did not meet the standard of an “obvious error.”

“An obvious error is a legal and factual impossibility,” O’Brien said. “This is an advantage that the patron took.”

She added that DraftKings’ internal failures — not the bettor’s conduct — created the situation.

“We need to seriously consider giving voice to the consumer and getting their half the story,” O’Brien said. “The compulsion to pay will in fact encourage compliance.”

Operator responsibility and internal failures

Other commissioners echoed that view, emphasizing that it is the operator’s responsibility to ensure the integrity of its markets.

The commission noted that DraftKings acknowledged the root cause was internal — a configuration failure within its own trading tools — and not the result of a third-party odds provider or external data feed.

Upon discovering the error, DraftKings pulled the affected markets, left the wagers unsettled pending regulatory guidance and implemented corrective fixes.

The company said no other Massachusetts customers were impacted, though the same issue appeared in two other jurisdictions.

The Post has sought comment from DraftKings.