DraftKings faces legal battles over promotional practices

Sudhanshu Ranjan January 13, 2025

SiGMA news

DraftKings, a prominent figure in sports betting and daily fantasy sports, is currently facing multiple class action lawsuits across various states. These legal actions accuse the company of deceptive promotional practices, leading to significant controversy and legal scrutiny.

Details of class action lawsuits

The law firm Loevy & Loevy has filed claims in Illinois, Kentucky, New Jersey, Massachusetts, and New York. These claims are brought on behalf of consumers who allege they were misled by DraftKings’ promotional offers and marketing tactics.

At the core of the lawsuits are “no-sweat” bets, which purportedly promote a sense of risk-free betting. While the advertised terms and conditions suggest one thing, they do not cover losses associated with these promotional offers.

“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. But you don’t. It’s not ‘risk-free’ as advertised,” said Loevy & Loevy attorney Issac Green, whose law firm represents the plaintiffs.

DraftKings’ deposit match offers have also come under scrutiny. Plaintiffs claim that the terms and conditions of these offers are complex and often do not meet users’ expectations. Instead of receiving cash, users allegedly receive virtual tokens that limit their ability to withdraw funds.

“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. Our complaints allege that DraftKings is misleading and manipulating customers in violation of the law,” Green added.

Nationwide legal class action

In Massachusetts, plaintiffs Shane Harris and Melissa Scanlon are suing DraftKings through a class action for breaches of state consumer protection laws due to its $1,000 deposit bonus advertisement. DraftKings attempted to have the case dismissed but suffered a setback when a judge allowed the case to proceed.

In New York, Samantha Guery filed a lawsuit against DraftKings for misleading advertising regarding its “risk-free” promotion. Although the lawsuit was voluntarily dismissed, it represents yet another legal challenge DraftKings must address in different jurisdictions.

Last month, Aminov claimed that DraftKings failed to inform new users that their deposit bonus is calculated as 20% of their first deposit, up to $5,000. The lawsuit argues that DraftKings did not disclose the immediate $5,000 deposit requirement and a minimum wagering of $25,000 to qualify for the $1,000 deposit bonus.

The suit aims to represent DraftKings users across the country who allegedly have been victims of deceptive acts. Plaintiffs seek recovery for their damages as well as statutory damages, given the magnitude and impact of these proceedings.

DraftKings’ response

DraftKings has defended its promotional conduct, asserting compliance with laws and regulations. The company continues to face legal challenges while striving to remain competitive in the online gambling market.

In a statement, the company said, “We take compliance and transparency seriously and strive to ensure all our promotions meet the highest standards. We are committed to strongly defending ourselves against these baseless claims.”