DraftKings Faces New Class Action Lawsuit Over “Risk-Free” Bet Promotions
DraftKings Sportsbook is currently embroiled in a second class-action lawsuit, this time in the federal court of the Southern District of New York.
The lawsuit, spearheaded by plaintiff Samantha Guery, accuses DraftKings of deceptive and misleading advertising related to its “risk-free” bet promotions.
Allegations of Misleading Promotions
The crux of the lawsuit is the claim that DraftKings’ promotion of “risk-free” bets is fraudulent and misleading. According to the complaint, the promotion involved customers placing bets with their own money under the impression that they could not lose.
However, if the bet was lost, customers did not receive their original stakes back in cash. Instead, they were credited with a “Free Bet” token, which the lawsuit argues is worth less than the actual cash wagered, both because it cannot be withdrawn and because the payout structure is less favorable than cash wagers.
The Financial Discrepancy Explained
The legal filing details the financial mechanics of how the “Free Bet” works, pointing out a significant discrepancy in value compared to actual cash bets. For instance, a $100 cash bet at even odds would typically return the original $100 stake plus $100 in winnings, less the bookmaker’s commission.
In contrast, a winning “Free Bet” of $100 would only result in winnings (minus the commission), without the return of the original stake—essentially half the return of a cash bet.
The lawsuit also references regulatory actions in states like Ohio and Massachusetts, where the use of the term “risk-free” in gambling advertising has been banned.
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