A federal judge in New York has dismissed a consumer class action against DraftKings which alleged the company’s promotion of a $1,000 sign-up bonus was misleading.
Plaintiff Nerye Aminov sued the online casino and sports betting operator last December, claiming that he was misled into depositing $500 into a new account in January 2022, in the belief that he would qualify for the $1,000 sign-up bonus being offered.
The actual bonus terms stated that it would amount to 20 per cent of the total being deposited by a user, up to a maximum bonus of $1,000.
To qualify for the maximum bonus, the customer would need to deposit $5,000 and further stipulations were that they would need to wager a total of $25,000 on daily fantasy games, the operator’s sportsbook (at a specific odds limit) and its online casino offering.
DraftKings disputed Aminov’s action and filed a motion to dismiss, arguing that their advertising was suitably worded and that the plaintiff could not substantiate claims of financial loss or real or potential harm as a result of the promotion.
The Ruling In Favour Of DraftKings
Margo K Brodie, the chief judge of the US District Court for the Eastern District of New York, issued a ruling on Monday that supported DraftKings, agreeing that the terms of the promotion were clearly outlined and displayed prominently in the betting app.
“Plaintiff fails to allege that the promotion could deceive a reasonable consumer because the promotional terms fully disclosed the requirements to be eligible for the full value of the promotion in a conspicuous manner,” Brodie wrote in her summary.
She also referenced that DraftKings clearly stated the key term near the top of the deposit screen.
She added: “Close to the top of the deposit screen before selecting the deposit amount, the DraftKings page prominently stated, in bold, that users ‘will receive a 20% deposit bonus up to $1,000! Bonus funds are earned as you play’.
“Moreover, a reasonable consumer would not be misled to think that merely signing up for a DraftsKings account would entitle them to the full $1,000 deposit bonus when the Promotional Terms specified that users can receive up to $1,000 in bonus funds.”
It is common in cases around marketing and advertising disputes to use the “reasonable consumer” as the standard.
DraftKings Fined $450k By Massachusetts Regulators
Earlier this week DraftKings was fined $450,000 by the Massachusetts Gaming Commission (MGC) for allowing customers to make credit card deposits to fund their gambling accounts.
DraftKings had discovered possible breaches of the code from May 2023, July 2023 and February 2024, during which it had accepted $83,000 from 218 customers using credit cards.
Although the Boston-based operator reported itself to the MGC, the regulating body said that it was imposing the fine due to the delays involved in resolving each matter.
Jim Munro is a betting industry and gambling expert who has been a national newspaper journalist for over 30 years, predominantly at The Sunday Times and The Sun, where he wrote a weekly soccer betting column. Jim also worked on the launch of Virgin Bet with Gamesys and was subsequently head of editorial at LiveScore, the sports media and betting group.
