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DraftKings faces lawsuit over “deceptive” sign-up bonus in Massachusetts

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A Massachusetts-based Public Health Advocacy Institute, or PHAI, has brought a lawsuit on behalf of DraftKings for alleged misrepresentation in a bonus offer.

The suit claims that the players Shane Harris, and Melissa Scanlon are disputing DraftKings’ sign up promotion. The players’ lawsuit was filed by Massachusetts-based PHAI, and its Center for Public Health Litigation.

In the lawsuit, it is alleged that the plaintiffs did not know the terms and conditions of the bonus. They had to deposit $5,000 (PS3,992/EUR4,651) in order to get a $1,000 sign-up bonus.

In the suit, it is also claimed that players did not know they had to wager $25,000 in qualifying bets within a certain period. They would have been entitled to $1,000 non-withdrawable credit on DraftKings if they had met the terms.

Bonus terms slammed by lawsuit

Harris and Scanlon both claim to have been confused after not receiving the bonus that was stated in the promotional offer. The lawsuit argued that the DraftKings Bonus Offer was “unfair” and both “deceptive”.

The lawsuit stated that “DraftKings advertising the bonus was unfair and misleading because an eligible customer who is, by definition a new sports bet participant in Massachusetts, such as the plaintiffs would not understand the costs and risks involved to qualify for the $1,000 bonus.”

If the Plaintiffs understood what it would cost to win the bonus or how likely they were to do so, then they wouldn’t have taken part in the promotional campaign.

DraftKings should have been aware that their advertisement was misleading to the target audience, which were new sports bettors who would not understand any of the terms and conditions, no matter if they were written in English or were printed in font sizes that could easily be read by a consumer.

DraftKings criticized for unfair business practices

DraftKings was also charged with “knowingly and unfairly” constructing its bonus. It claims that this was done to maximize the number of players signing up, wagers made and money spent. The report added that gambling is a particularly addictive activity.

The suit stated that gambling products were not normal consumer goods. They are highly addictive.

The marketing of an addictive product must take extra precautions in order to minimize the risk of addiction. They should not demand that new customers, who may be gambling naive, wager $25,000 to receive a promotional deal. DraftKings promotion is unfair for the same reason.”

In the suit, it was stated that although plaintiffs did not claim addiction, they were seeking economic damages as well as statutory damages and treble damage, along with injunctive and other relief.

The lawsuit also demands that DraftKings stop this promotion and all others like it.

Mark Gottlieb, executive director of PHAI said: “Shane & Melissa were typical of the many thousands in Massachusetts that were misled and wouldn’t have signed up if they had understood DraftKings unfair and deceptive conditions.”

DraftKings has not yet responded to the complaint.

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