DraftKings Wins NY Lawsuit, Judge Rules ‘$1,000 Bonus’ Ad Was Not Misleading
A federal judge has dismissed a class-action lawsuit against DraftKings in New York, ruling that the company’s “$1,000 Deposit Bonus” promotion was not deceptive to a reasonable consumer. The decision is a significant legal victory for the operator in a case that scrutinized the transparency of its marketing offers.
A “Reasonable Consumer” Would Not Be Misled
The lawsuit, filed by plaintiff Nerye Aminov, claimed the promotion was intentionally unclear and designed to trick users into depositing money. Aminov stated he deposited $500 expecting a $1,000 bonus but only received $100.
However, U.S. District Judge Margo K. Brodie found that DraftKings had clearly disclosed the terms of the offer. The judge noted that the deposit screen “prominently stated, in bold, that users ‘will receive a 20% deposit bonus up to $1,000! Bonus funds are earned as you play.’” The court determined these disclosures were conspicuous and that a “reasonable consumer would not be misled.”
The full terms, which required a $5,000 deposit and $25,000 in total wagers to unlock the entire $1,000 bonus, were displayed near the offer. The judge ruled that because these conditions were fully disclosed, the plaintiff’s claims of being deceived were unfounded.
A Contrasting National Legal Landscape
While the New York ruling is a clear win for DraftKings, it comes as the company navigates a series of legal and regulatory challenges in other states. The victory stands in contrast to a settlement the company reached in Connecticut over a similar promotional offer, where it agreed to refund $3 million to customers.
The company is also facing a lawsuit from the city of Baltimore, which alleges deceptive advertising and targeting of vulnerable players. In Massachusetts, DraftKings was recently hit with a record $450,000 fine for illegally accepting bets funded by credit cards.
These differing outcomes highlight the complex and varied legal landscape that operators like DraftKings must navigate across the country. A promotional strategy that passes legal muster in one state can lead to a multi-million dollar settlement or a lawsuit in another, demonstrating the ongoing challenges of state-by-state regulation.
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