DraftKings Hit with Lawsuits Over Alleged Misleading Practices
DraftKings faces class action lawsuits in Illinois, Kentucky, and New Jersey. The lawsuits accuse the company of using deceptive promotions and unfair practices that allegedly exploit new and vulnerable users.
Promotions Under Fire
The lawsuits target several DraftKings promotions, particularly “risk-free bets,” later rebranded as “sweat-free bets.” Plaintiffs claim the promotions mislead users into thinking they can bet without losing money. Instead of providing cash refunds for losses, DraftKings offers bonus bets with restrictive terms, which plaintiffs argue encourage further wagering.
Deposit match offers are another focal point of the lawsuits. According to plaintiffs, these promotions push users to deposit large sums only to encounter complex wagering requirements. Users must often bet 30 times the bonus amount on high-risk wagers within a short period. Even successful bettors are frequently rewarded with virtual credits called “DK Dollars,” which require additional wagers to gain any real value.
Broader Allegations of Unfair Practices
The complaints also allege that DraftKings unfairly targets specific groups:
- Inexperienced players: Marketing and promotions allegedly appeal to bettors unfamiliar with the risks of gambling.
- Skilled players: Users who consistently win often face restrictions, such as lower bet limits or fewer promotional offers.
- Younger audiences: DraftKings’ daily fantasy sports (DFS) contests, which allow users under 21 to win prizes without wagering money, allegedly familiarize underage individuals with the platform before they are legally eligible to gamble.
Legal and Regulatory Concerns
Plaintiffs assert that DraftKings violated several state consumer protection laws, including:
- Illinois Consumer Fraud and Deceptive Business Practices Act
- New Jersey Consumer Fraud Act
- Kentucky Consumer Protection Act
In Illinois, a separate lawsuit claims the company failed to comply with app store guidelines set by Apple and Google, raising compliance questions for its mobile application.
DraftKings Faces Additional Legal Battles
These class action suits are not the only legal challenges DraftKings encountered in 2024. The company faced lawsuits over data-sharing practices, allegations of improperly using player images, and disputes with former executives. In September, the Major League Baseball Players Association accused DraftKings of using players’ names and likenesses without authorization.
A New Jersey family also filed a lawsuit, claiming the platform contributed to a gambling addiction that resulted in severe financial losses. While DraftKings has not commented on these cases, the company continues to face legal scrutiny in multiple states.
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