DraftKings is facing a series of class action lawsuits in several states concerning promotional practices that are deemed deceptive and fraudulent.
The Boston-based sports betting and DFS giant has seen class action lawsuits filed against it in Illinois, Kentucky and New Jersey by six plaintiffs who are seeking injunctive relief and damages for themselves and on the behalf of others for alleged deceptive practices by DraftKings, which include the promotion of “no-sweat” bets.
“Consumers should be able to rely on one of the leading sports gambling outfits in the country to do what it promises and play by the rules,” said Loevy + Loevy attorney Issac Green, whose law firm represents the plaintiffs. “Our complaints allege that DraftKings is misleading and manipulating customers in violation of the law.”
Suits filed in Illinois, Kentucky and New Jersey
The class action suits allege DraftKings uses “false promises and misrepresentations” by deploying its “no-sweat” promotion causing new customers to believe they can spend their money with the sportsbook without risk. Despite, the “no-sweat” claim by DraftKings, the actual terms and conditions of its promo allegedly does not offer compensation for losses.
“The complaints allege that DraftKings deliberately makes it sound like you get the cash value of your bet back, which encourages new players to bet larger amounts of money than they otherwise would,” added Green. “But you don’t. It’s not ‘risk-free’ as advertised.”
The suits also consider betting limits used by DraftKings. The plaintiffs claim DraftKings encourages losing gamblers to continue wagering, particularly with large bet amounts while the operator is limiting winning bettors by shrinking their bet sizes and frequencies.
Deposit match offers are also an issue raised in the class actions against DraftKings.
According to court documents, the plaintiffs allege DraftKings’ deposit match offers incentivizes customers to spend larger amounts of money despite the promotion not matching expectations by its users due to complex terms and conditions. The deposit match offers also only provide players with virtual tokens to spend instead of cash.
The six plaintiffs behind the class actions believe DraftKings’ promotional practices are deceptive and fraudulent as they target minors, provide false promises and misrepresentations but they are not the only patrons taking legal action against DraftKings.
DraftKings risk-free lawsuit moving forward in MA
In Massachusetts, two residents filed a class action suit against DraftKings for allegedly violating state consumer protection laws for the advertising of its $1,000 deposit bonus.
The plaintiffs, Shane Harris and Melissa Scanlon, are working with the Public Health Advocacy Institute and claim DraftKings used “unfair and deceptive acts” in its promos.
Last August, a Massachusetts judge denied a motion to dismiss the case by DraftKings.
That same month, Samantha Guery filed a class action suit against DraftKings in New York alleging the operator engaged in deceptive advertising for its “risk-free” promo.
Guery argued that the free bonus bet she received from the promo did not equal the amount of her initial wager leading to a claim of DraftKings misleading customers.
The suit against DraftKings would be voluntarily dismissed with prejudice after Guery initially did not respond to communication attempts by the court. As a result, Guery’s lawyers asked to be relieved from the case which eventually led to its voluntary dismissal.
New York continues to be a popular venue for DraftKings’ legal woes with the operator also facing a lawsuit in the U.S. District Court for the Eastern District of New York.
Last month, Nerye Aminov filed a class action lawsuit against DraftKings alleging charges including violating New York General Business Law, intentional misrepresentation and unjust enrichment over its marketing practices for first-time deposit bonuses.
Aminov alleges that DraftKings did not properly inform its new users that its deposit bonus is calculated as 20% of up to $5,000 of the new users’ first deposit. The suit claims that DraftKings didn’t disclose the immediate need for a $5,000 deposit and a wagering of at least $25,000 to be eligible for the promotion’s $1,000 deposit bonus.
In the suit, Aminov is seeking the return of his initial deposit or the full $1,000 bonus. He is also seeking statutory damages. The suit includes a nationwide class of DraftKings users who opened an account and deposited with the operator in response to the promo.
