New York Judge Affirms DraftKings Deposit Bonus Did Not Mislead
A New York federal judge dismissed a class-action lawsuit against DraftKings alleging that the company's offer of a deposit bonus of up to $1,000 was “deceptive.”
The Chief Judge of the U.S. District Court for the Eastern District of New York, Margo K. Broadie, stated that any “reasonable” customer would have understood the promotion and that DraftKings had clearly stated the terms and conditions.
The plaintiff, Nerye Aminov, alleged that DraftKings had committed intentional misrepresentation, fraudulent inducement, and unjust enrichment as a result of offering a “fraudulent and misleading promotion.”
The promotion advertised that players could claim a $1,000 deposit match bonus. However, the terms clarified that the deposit match on offer was only up to 20% of a player’s deposit. Therefore, to claim the $1,000 deposit bonus, players would need to deposit $5,000.
The DraftKings promotion also applied 25x wagering requirements to its bonus funds, so anyone that claims the full $5,000 promotions must wager $25,000 before withdrawing any cash.
Aminov claimed that the offer was deceptive, as he deposited $500 in pursuit of the larger bonus but only received $100.
DraftKings argued that there was no misleading advertising and stated that Aminov could not substantiate his claims of “financial loss or potential harm” due to the promotion. DraftKings filed a motion to dismiss, to which Brodie agreed.
Her decision said that the offer's requirements were “prominently” and “conspicuously” displayed in full and were not hidden.
“Prior to depositing funds into a DraftKings account, a reasonable consumer would have seen the promotional terms that were displayed on the deposit screen,” said Broadie
DraftKings to refund Connecticut customers
New York is not the only state where DraftKings has faced legal trouble with its promotions. The Connecticut Department of Consumer Protection ordered DraftKings to pay $3 million to 7,000 customers who participated in certain bonus offers between Oct. 19, 2021, and Jan. 4, 2024. The bonus offers included promises such as a deposit match or a deposit bonus advertised between these dates.
“Gaming operators must clearly communicate the terms of any promotion to their customers, including requirements to wager a certain amount or other conditions to obtain a promised award. We are happy that DraftKings has agreed to assess its promotions, provide additional training to its employees regarding Connecticut’s laws and regulations, and return funds to consumers who misunderstood and in many cases were completely unaware of the terms of the promotions they participated in,” said Department of Consumer Protection Gaming Division Director Kris Gilman.
