DraftKings is facing a class-action lawsuit spanning New York, Massachusetts, and California, accusing the company of deceptive marketing practices.
The lawsuit, spearheaded by Chicago-based law firm Loevy & Loevy, alleges that DraftKings misled consumers with promotions such as “risk-free” bets and deposit bonuses.
The legal action builds on accusations that DraftKings failed to provide clear and accurate information about the terms of its promotional offers, potentially violating state and federal consumer protection laws.
Allegations of Misleading Marketing Practices
Central to the lawsuit are claims that DraftKings’ “risk-free” bet promotions were not as risk-free as advertised. According to the plaintiffs, users were required to wager their own funds upfront and, in the event of a loss, only received credits rather than cash refunds. These credits, often subject to restrictive terms and expiration dates, were allegedly difficult to redeem.
The lawsuit also accuses DraftKings of failing to adequately disclose the limitations of its deposit bonuses and other promotional incentives. Plaintiffs argue that these tactics disproportionately affected inexperienced bettors, luring them into financial losses under the guise of risk-free offers.
Law firm Loevy & Loevy has filed the suit in three states, aiming to secure class-action certification to represent thousands of affected users nationwide.
A spokesperson for the firm said:
“By advertising promotions that appeared to offer no financial risk, DraftKings misled thousands of users, violating their trust and potentially breaking the law.”
The plaintiffs are seeking monetary damages, injunctive relief to prevent DraftKings from continuing these practices, and changes to the company’s promotional strategies.
DraftKings Pushes Back
DraftKings has denied the allegations, maintaining that all promotional offers are accompanied by detailed terms and conditions. In a statement, the company said,
“We take compliance and transparency seriously and strive to ensure all our promotions meet the highest standards. We will vigorously defend against these baseless claims.”
However, legal experts suggest the lawsuit could lead to increased scrutiny of the marketing practices employed by online betting platforms, particularly in light of the industry’s explosive growth.
Second Class Action in MA
In 2023, a similar lawsuit was filed in Massachusetts claiming ‘unfair and deceptive’ advertising in relation to the sportsbook’s $1,000 bonus bet offer for new customers.
According to court documents, the plaintiffs claim that the promotion had unrealistic wagering requirements for the customer to receive the full amount of the bonus.
According to the promotion’s terms and conditions, a customer would need to deposit $5,000 with the first 90 days of opening an account. They would also need to place at least $25,000 in wagers in order to receive the full amount of the bonus.
Olivia has worked as an editor and writer for major brands across multiple niches. She now focuses on the iGaming and sports betting industries.