Federal Lawsuit Alleges DraftKings Misled Users with Promos
DraftKings is once again facing legal scrutiny after a federal class action lawsuit was filed by Pennsylvania residents against the online betting platform.
LISTEN TO THIS ARTICLE:The complaint alleges that DraftKings engages in manipulative marketing strategies to encourage compulsive gambling and that it promotes offers labeled “risk-free” that are anything but.
Federal Lawsuit Filed over Deceptive Practices
Filed in the US District Court for the Eastern District of Pennsylvania, the lawsuit claims DraftKings has structured its business to exploit at-risk users, particularly young men, through deceptive advertising and convoluted bonus systems. According to the plaintiffs, this resulted in major financial losses and leveraged addictive behavior, all while failing to implement effective safeguards such as self-exclusion tools.
Central to the legal challenge are DraftKings’ “No Sweat” bets and deposit match promotions, which the plaintiffs argue were misleading. While promoted as safe and risk-free, users were required to wager real money first. In the event of a loss, they would receive “Bonus Bets”, which did not function as cash refunds. These bonus credits were often short-lived, paid out only part of any winnings, and were subject to strict conditions. The lawsuit states that these terms were buried in fine print or only revealed after users had already made deposits.
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Allegations Include Pressure Tactics and Ignored Self-Exclusion
One individual involved in the lawsuit claims a VIP host at DraftKings urged him to increase his betting and deposits, even though he had previously requested restrictions on his gambling activity. Another plaintiff asserts the platform continued to allow him to gamble even after he added himself to Pennsylvania’s self-exclusion list, which is designed to aid those struggling with gambling addiction.
The lawsuit also calls attention to DraftKings’ Casino Deposit Match offer, which promised to double deposits up to $2,000. Plaintiffs argue that this bonus came with unattainable requirements, such as needing to wager tens of thousands of dollars in a single week. If players failed to meet these strict terms, they forfeited both the bonus and their original deposit, even if they had won money during gameplay.
Court documents further allege that DraftKings, one of the most popular PA online casinos, used detailed customer data to identify individuals displaying risky behavior, then targeted them with personalized incentives to keep them engaged. The plaintiffs claim this approach prioritized profits over consumer protection and ethical standards.
Wider Legal Problems for DraftKings
The plaintiffs are seeking compensation for their losses and additional damages under both state and federal consumer protection laws. They also aim to represent a nationwide group of users who may have been misled by similar marketing strategies.
This isn’t the only legal trouble DraftKings faces. In addition to the Pennsylvania class action, the company is confronting lawsuits in New Jersey, Illinois, and Kentucky. These cases also challenge the company’s use of phrases such as “risk-free” and “no sweat first bets”, alleging they misrepresent the true nature of the offers.
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