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Understanding DraftKings and How Sports Betting Works

DraftKings is a major online sports betting and daily fantasy sports platform that operates across the United States. The company was founded in 2012 and has grown to become one of the largest legal sportsbooks in the country. Understanding what DraftKings offers and how the platform functions is the foundation for anyone interested in using their services.

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Sports betting through DraftKings involves placing wagers on the outcomes of sporting events. This can include betting on professional leagues like the NFL, NBA, MLB, and NHL, as well as college sports, soccer, golf, tennis, and many other competitions. Daily fantasy sports, another DraftKings product, involves creating lineups of real players and earning points based on their actual performance in games that day or week.

The platform operates legally in states where sports betting and daily fantasy sports are permitted by state law. Currently, DraftKings holds licenses in numerous states, and this number continues to grow as more states legalize sports betting. Each state has its own regulations regarding sports betting, including age requirements, betting limits, and which types of wagers are allowed.

The basic mechanics of placing a bet on DraftKings involve selecting the sporting event you're interested in, choosing your wager type (such as who will win the game, how many points will be scored, or specific player performances), and determining your stake amount. The platform displays the odds for each option, which indicate the potential payout if your selection wins.

DraftKings generates revenue through the difference between what bettors wager and what they win—commonly called the house edge or vigorish. This is why the platform can offer free account creation and initial promotional offers; they profit from ongoing user activity over time, not from sign-up fees.

Practical Takeaway: Before proceeding with creating an account, research whether sports betting is legal in your state and understand the basic types of wagers available, such as moneyline bets (picking a winner), spread bets (betting on margin of victory), and over/under bets (betting on total points scored).

State-by-State Legality and Regulatory Requirements

The legal landscape for sports betting in the United States is complex and constantly changing. Following the Supreme Court's 2018 decision in Murphy v. National Collegiate Athletic Association, individual states gained the authority to legalize sports betting within their borders. This led to a patchwork of different regulations across the country rather than a single federal standard.

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As of 2024, approximately 38 states and Washington D.C. have legalized some form of sports betting, though the specific rules vary significantly. Some states allow only in-person betting at licensed sportsbooks, while others permit online betting through licensed operators like DraftKings. A few states have very restrictive regulations, while others have more open frameworks. Several states still prohibit sports betting entirely.

Each state that permits sports betting typically requires operators to obtain licenses, submit to regulatory oversight, and follow specific rules about advertising, responsible gambling measures, and consumer protections. These regulations exist to protect consumers, prevent fraud, and ensure the integrity of sporting events.

DraftKings operates under the regulatory frameworks established by individual states. The company maintains separate accounts and operations for each state where it's licensed, and the terms of service can differ slightly between states. Some states impose betting limits, specific types of restricted bets, or different promotional rules than others.

Before creating a DraftKings account, it's essential to determine whether your state permits sports betting and whether DraftKings specifically holds a license to operate in your state. You can typically find this information by visiting your state's gaming or lottery regulatory agency website or checking DraftKings' site for state availability. If you live near state borders, understand that you cannot legally use DraftKings across state lines—you must be physically located in a state where the company is licensed.

Additionally, many states have minimum age requirements (most require users to be at least 21 years old, though a few allow 18-year-olds), citizenship or residency requirements, and prohibitions against using VPNs or other methods to circumvent location restrictions. These aren't arbitrary rules—they're enforceable legal requirements that the platform actively monitors.

Practical Takeaway: Visit your state gaming regulatory commission's official website to confirm that DraftKings holds an active license in your state. Verify the minimum age requirement and understand that violating location restrictions or age requirements can result in account closure and forfeiture of funds.

Account Creation Process and Information Requirements

Creating a DraftKings account involves providing personal and financial information. This section explains what information you'll need and why DraftKings requests it.

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To begin the account creation process, you'll need basic personal information including your full legal name, date of birth, and residential address. DraftKings verifies this information against public records and age-verification databases to confirm that you meet the minimum age requirement for your state (typically 21 years old). This verification process helps the platform comply with state regulations and prevent underage gambling.

You'll also be asked to create login credentials, which typically include an email address and password. Choose a strong, unique password that you don't use on other websites. Consider using a password manager to store this information securely. Your email address becomes your account recovery tool, so use one you actively monitor and have backup access to.

Many states require that you provide the last four digits of your Social Security number. This serves as an additional identity verification method and helps prevent fraud. DraftKings uses this information to verify your identity and age but does not use it for credit checks or to pull your credit report (unless you choose to use their payment methods that require such verification).

You'll need to create a username, which is different from your legal name and serves as your display name on the platform. You can typically change this later through account settings.

During the account setup, you'll also be asked to review and accept the Terms of Service and Privacy Policy. These legal documents explain your rights, the company's obligations, responsible gambling practices, and how your data is handled. Taking time to read these documents is worthwhile, as they govern your relationship with the platform.

Some states require additional verification steps, such as submitting a photo of your driver's license or passport. If DraftKings requests this information, it's because state regulations mandate it. This is a standard practice across licensed sportsbooks and helps prevent identity fraud and money laundering.

Practical Takeaway: Gather your government-issued ID, current residential address, and Social Security number before starting account creation. Use a strong, unique password and a reliable email address you can access at any time, as you'll use these to log in and recover your account if needed.

Verification and Geolocation Confirmation

After you provide initial information, DraftKings conducts identity verification and geolocation checks. Understanding this process helps explain why the platform asks for certain information and how it protects both users and regulatory compliance.

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Identity verification typically involves matching the information you provided against national databases that contain driver's license information, Social Security records, and other public data. This process happens automatically in most cases and takes anywhere from a few minutes to 24 hours. If there are discrepancies in your information, DraftKings may request additional documentation or clarification.

Geolocation verification ensures you're physically located in a state where DraftKings holds a license. The platform uses GPS technology, Wi-Fi data, and IP address information to confirm your location. This isn't surveillance—it's a required regulatory check. Each time you attempt to place a bet, DraftKings verifies that you're in an authorized state. If you travel to another state, you can continue using your account as long as you're physically present in one where DraftKings operates.

Some states require proof of residency or in-state address confirmation. If you've recently moved, you may need to update your residential address in your account settings. Providing an address in a state where you don't actually reside violates terms of service and can result in account suspension.

If your verification is flagged for any reason—such as duplicate accounts, inconsistent information, or possible fraud indicators—DraftKings will contact you with instructions on how to proceed. This might involve submitting additional documentation or answering verification questions. Respond to these requests promptly and honestly.

The verification process protects you by preventing unauthorized access to your account and unauthorized