DraftKings Faces Class Action Over Misleading Gambling Promotions

DraftKings finds itself in hot water again as Pennsylvania residents launch a federal class action lawsuit against the online gambling giant. The suit claims the company uses predatory strategies that push people to gamble and deceive users with promotions labeled as “risk-free.”

DraftKings Sued for Allegedly Exploiting At-Risk Gamblers With Misleading Promotions

A lawsuit was filed in the US District Court for the Eastern District of Pennsylvania on April 18. The lawsuit claims DraftKings has built a business model that targets users who are at-risk young men. The company allegedly uses misleading marketing tactics and complicated, harsh bonus programs. The people suing say they lost a lot of money. They argue that the platform made money by taking advantage of addictive behaviors and weak self-exclusion safeguards.

At the heart of the accusations are the company’s “No Sweat” and deposit match deals. The plaintiffs claim these were not what they seemed. The company marketed them as safe bets, but users had to gamble their own cash first. If they lost, they got “Bonus Bets” that were not real money, not actual refunds. The lawsuit says these bonus credits often did not last long, paid out some of the winnings, and had tough rules for using them. These terms were hidden in small print or not shown until after people had put money in.

One plaintiff says a VIP host pushed him to bet more and deposit faster, even though he had asked to limit his gambling before. Another claims DraftKings let him keep gambling after he put himself on Pennsylvania’s self-exclusion list — a system to help people with addiction issues.

Plaintiffs Say DraftKings Trapped Users with Unwinnable Bonus Terms

The lawsuit also targets DraftKings’ Casino Deposit Match program, which promised to double deposits up to $2,000. The plaintiffs say this deal had impossible conditions, like having to bet tens of thousands of dollars in a week and rules that made it really hard to withdraw money. People who could not meet these terms lost their bonuses and original deposits, even if they had won money.

Court papers claim DraftKings used customer information to spot risky behaviors and then target those users with custom incentives to boost engagement. Some say this approach went too far, putting profits ahead of responsible gambling.

The plaintiffs want money back for their losses and damages under consumer protection laws at the state and federal levels. They also hope to stand for a group nationwide that faced similar promotional tactics. Besides the class action in Pennsylvania, DraftKings now faces legal challenges in New Jersey, Illinois, and Kentucky over its marketing language. The company’s use of terms like “risk-free” and “no sweat first bets” has also come under fire in those class action lawsuits. People suing the company claim these words mislead customers.