If your bank reverses a deposit you made to DraftKings, any winnings you earned using those funds will be cancelled, the original deposit amount will be deducted from your account, and your account may be closed without warning.
This analysis describes what DraftKings's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
The clause operationalizes chargeback risk management by establishing automatic account adjustments and potential account termination as consequences of payment disputes, creating a direct financial and operational link between deposit payment disputes and contest eligibility.
A chargeback from your bank, even if initiated by the bank automatically due to fraud, could result in the loss of contest winnings and account closure, creating a situation where resolving a payment dispute with your bank inadvertently triggers financial and account consequences at DraftKings.
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"If any deposit is charged back any winnings generated from DraftKings contests shall be invalidated, forfeited and deducted from your Account balance. In addition, the amount of the initial deposit will be invalidated, forfeited and deducted from the Account balance. DraftKings reserves the right to close your account - without notice - shall a deposit be charged back.— Excerpt from DraftKings's DraftKings Terms of Use
REGULATORY LANDSCAPE: The chargeback consequence provision creates a tension between card network chargeback rights, which are independent of merchant terms, and DraftKings' contractual response to chargeback events. The CFPB has oversight of consumer payment product practices, and automatic prize invalidation and account closure in response to a chargeback may raise consumer protection concerns, particularly where the chargeback was initiated for a legitimate unauthorized transaction reason. GOVERNANCE EXPOSURE: Medium. The provision is common in consumer gaming platforms but the combination of prize forfeiture, deposit deduction, and no-notice account closure creates a disproportionate response that may face scrutiny if applied to cases where the chargeback was not the result of user misconduct. Card network rules generally protect consumers' chargeback rights, and a contractual provision that penalizes their exercise may face enforceability challenges. JURISDICTION FLAGS: California and New York consumer protection frameworks may limit the ability to contractually penalize consumers for exercising chargeback rights in cases involving unauthorized transactions. The CFPB's oversight of payment products may engage where this provision operates in ways that discourage consumers from exercising legitimate chargeback rights. CONTRACT AND VENDOR IMPLICATIONS: Payment processors and card network agreements with DraftKings should be reviewed to understand how chargeback events are communicated to DraftKings and what obligations DraftKings has to investigate before triggering these account consequences. COMPLIANCE CONSIDERATIONS: Compliance teams should assess whether the automatic application of prize forfeiture and account closure in all chargeback scenarios, without investigation of the reason for the chargeback, aligns with consumer protection expectations and card network requirements. A process for distinguishing chargebacks initiated due to fraud or unauthorized use from those initiated due to user misconduct would reduce regulatory and reputational risk.
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The clause operationalizes chargeback risk management by establishing automatic account adjustments and potential account termination as consequences of payment disputes, creating a direct financial and operational link between deposit payment disputes and contest eligibility.
A chargeback from your bank, even if initiated by the bank automatically due to fraud, could result in the loss of contest winnings and account closure, creating a situation where resolving a payment dispute with your bank inadvertently triggers financial and account consequences at DraftKings.
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