DraftKings Tumbles on Reports of Hacked Client Accounts

Posted on: November 21, 2022, 12:29h. 

Last updated on: November 21, 2022, 12:56h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

DraftKings (NASDAQ: DKNG) stock slipped early Monday on reports that some client accounts were hacked and the funds were depleted by cybercriminals.

DraftKings hack
Inside a DraftKings office. The company acknowledged some client accounts were hacked. (Image: Wall Street Journal)

The DraftKings customer service Twitter account acknowledged “reports of customers having issues with their accounts” and encouraged affected clients to directly contact customer service staff at support@draftkings.com.

The gaming company didn’t publicly state that bettors’ accounts were drained by the cyber thieves, nor did it say how many accounts were affected. There’s speculation on Twitter that more than 100K DraftKings accounts were affected.

The DraftKings hack extends what’s a long history of cybersecurity breaches involving the gaming industry. While sports wagering websites such as DraftKings typically invest in cybersecurity, the sites can be prime targets for cybercriminals because of the treasure troves of customer data, including addresses, bank records, and credit card numbers held by the companies.

DraftKings Customers Upset

Understandably, some of the affected DraftKings clients are upset by the security breach. In some instances, the bad actors would use a client’s credit card information stored on the site to make a deposit into the gaming account and then drain the account.

Some patrons claim they were made aware of problems in their DraftKings accounts after receiving alerts from their banks regarding nefarious activity in their personal accounts. Others claim the situation could have been de-escalated by DraftKings had the gaming company been responsive right off the bat.

Messaged the ‘24/7’ support team multiple times as my money was being stolen,” opined one Twitter user. “Could have easily been stopped in real time as I identified the scam immediately, but no one was there on the 2 busiest sports betting days of the week.”

Others noted it’s disheartening that DraftKings doesn’t have a customer service phone number, particularly for instances such as cybercrime. Speaking of phone numbers, multiple messages on Twitter indicate the hackers changed the phone numbers associated with customer accounts, making it difficult for account holders to change passwords or temporarily lock their accounts.

Bad Timing for DraftKings

There’s never a good time for a company, regardless of industry, to divulge a cybersecurity misstep. In the case of DraftKings, the timing is particularly bad. Battered for essentially all of this year, DraftKings stock recently found some relief, and was higher by 13% over the past month.

When it comes to share price declines, DraftKings may not be out of the woods because the extent of the hack isn’t known. If it’s larger than feared in terms of affected customer accounts and the amount of cash lost, already volatile DraftKings stock could be in for more reckoning.

Casinos, both land-based and online, have become prime targets for cybercriminals. In 2015, the US government accused Iran of authorizing a hack against Las Vegas Sands (LVS) after Chairman and CEO Sheldon Adelson — an ardent supporter of Israel — made harsh comments against the Islamic Republic’s nuclear ambitions.

MGM Resorts International was victimized in a 2019 hack in which the perpetrators pilfered full names, home addresses, phone numbers, emails, and dates of birth of clients.