Lawsuits Allege DraftKings Exploits Gambling Addicts
DraftKings is facing lawsuits filed in Illinois, Kentucky, and New Jersey, which accuse the company of using deceptive practices to encourage gambling addiction.
Draftkings app opened on App Store. DraftKings accused of fueling gambling addiction in lawsuits.
LISTEN TO THIS ARTICLE:The class-action lawsuits, filed this week, claim that DraftKings employs misleading promotions to attract users and maximize its revenue. One suit, filed by the Chicago-based law firm Loevy & Loevy, states that the company’s business model has “long involved pushing the boundaries of the law, misleading consumers, and luring naïve gamblers into developing addictions”.
The Promise of Risk-Free Bets
The plaintiffs argue that DraftKings markets itself as offering a risk-free gambling experience to attract new users. However, the lawsuits claim that instead of providing the promised risk-free opportunities, the platform locks users into betting almost exclusively with their own funds, which they usually lose.
The suits also accuse DraftKings of encouraging users who win initially to make increasingly risky bets until their money is depleted. The platform allegedly targets individuals likely to lose substantial sums of money, referring to them as “marks”.
One aspect under scrutiny is DraftKings’ “Risk-Free Bet” or “No Sweat First Bet” promotion. The lawsuits claim that users must deposit and wager their own money, and when they lose, they receive a “Bonus Bet” instead of the original cash amount.
Unlike cash, Bonus Bets cannot be withdrawn or directly converted into cash. They must be wagered and won before acquiring any cash value. Furthermore, winnings from Bonus Bets do not include the initial wager amount, unlike bets made with U.S. dollars. For example, a $100 Bonus Bet at even odds results in $91 after the operator’s cut, compared to $191 for a regular bet.
The lawsuits argue that these casino bonuses manipulate users into creating accounts and risking money they might otherwise have kept.
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Young People Targeted
The plaintiffs include Wyatt Robinson, a 19-year-old from Kentucky who signed up for DraftKings in 2023 after seeing an advertisement featuring comedian Kevin Hart. Robinson alleges that he was misled by promotions and lost money after believing his bets were risk-free.
The suit further claims that DraftKings deliberately targets young men, a demographic considered vulnerable to developing gambling addiction. It alleges that the platform’s interface is designed to obscure the true terms of its offers, which makes it harder for users to understand the risks.
Sports betting apps are the tobacco industry of this decade: harmful, deceptively marketed, and too easily accessible to young people. Rather than acting responsibly to address these problems, DraftKings is taking full advantage of them to pad its bottom line. Its so-called risk-free bets are a fraud designed to lure inexperienced and susceptible consumers with an illusion that their money is safe. It is not. Most people who fall prey to the ads never see their money back, and far too many chase their losses and suffer tragic results. DraftKings knows this up front and is making a business out of that suffering. This is a national problem and we are bringing litigation to address it.
The lawsuits, filed in the District of New Jersey, the Western District of Kentucky, and Cook County, Illinois Circuit Court, include claims of intentional misrepresentation, negligence, unjust enrichment, conversion, and violations of state consumer protection laws.
DraftKings has not yet responded or made an appearance in the cases.
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