DraftKings Faces Pennsylvania Lawsuit Alleging Deceptive Gambling Promotions
It's a bit of bad news for one of the best sports betting sites.
DraftKings is being sued in a federal courtroom in Pennsylvania after the company allegedly employed dishonest ads to incite excessive betting on its online gambling websites. The lawsuit alleges that the Boston company and sister affiliates violated consumer protection law through ads for offers that would finance gambling addiction, in part because states such as Massachusetts are considering the legalization of real-money online casinos, or iGaming.
The suit claims DraftKings used ads that offered players their deposits back but didn't clarify the terms of the wagering requirements. The suit claims consumers had to bet tens of thousands of dollars quickly to release these promotional offers.
The lawsuit also disputes using the term "risk-free" and "no-sweat" in advertising because those offers only gave back the player's initial bet in non-cashable casino credits, which could then be staked and won to convert to real money.
The plaintiff's lawyers also argue that such schemes had been strategically designed to induce compulsive gambling. The advertisements, they say, did not disclose essential conditions or hide the terms in difficult-to-read small print.
According to the filing, five plaintiffs developed gambling addictions and lost significant sums in attempting to meet bonus conditions or recover their losses. Two individuals reportedly lost over $50,000 each within a few months of opening accounts with DraftKings and its subsidiary in Pennsylvania.
The lawsuit seeks class-action status to represent a broader group of affected consumers.
Judge dismisses related case in New York
In a separate case, a federal judge in New York has dismissed a proposed class action against DraftKings related to similar promotional issues. The lawsuit, filed by New York resident Nerye Aminov, alleged that DraftKings misled users with its "$1,000 Deposit Bonus" advertisement, which he claimed did not clearly outline the conditions required to receive the full bonus.
On 28 July, US District Judge Margo K. Brodie ruled in favor of DraftKings, determining that the promotional terms, detailed in the terms and conditions, were sufficiently clear and accessible to consumers and not hidden in fine print. Judge Brodie concluded that the claims did not meet the legal threshold for deceptive marketing.
Lawsuit filed over $14 million voided golf bets
DraftKings is also defending against a third legal challenge filed by bettor Nicholas Bavasis, who claims he was wrongfully denied over $14 million in potential winnings from bets placed on the February 2024 AT&T Pebble Beach Pro-Am. The tournament was shortened due to severe weather, and Bavasis had wagered that the results would stand as final after three rounds.
The PGA Tour confirmed the tournament's early conclusion on February 4. However, DraftKings voided the wagers the next day, returning only the original $325 stake. Bavasis initiated legal action in May, asserting that DraftKings had no grounds to cancel the bets after the PGA made its final ruling.
The case was transferred to federal court in Des Moines, Iowa, and remains pending.
