DraftKings faces Pennsylvania class action lawsuit for ‘risk-free’ claims

DraftKings, a prominent sports betting operator, is currently embroiled in legal troubles in the United States. A group of individuals from Pennsylvania has filed a lawsuit challenging the transparency of the company’s “risk-free” betting promotions.

Loevy & Loevy, a law firm based in Chicago, initiated the legal action on behalf of five plaintiffs at the District Court of Pennsylvania’s Eastern District on April 18. The lawsuit is seeking class action status, which would allow not only the initial plaintiffs but also others with similar grievances to seek compensation and damages.

The core claim made by the legal team is that DraftKings is profiting significantly by deceiving and addicting its users through promotional activities that may violate legal boundaries. This legal action comes on the heels of a separate complaint filed in Baltimore City, which accused DraftKings of engaging in misleading and exploitative practices.

The lawsuit specifically calls into question DraftKings’ “risk-free” betting and deposit-match bonus promotions. The attorneys argue that DraftKings attracts new customers with prominent offers like “risk-free” bets and deposit matches, such as the No Sweat promotion. However, they contend that the company undermines these offers by burying complex terms in barely accessible fine print that users are unlikely to read or fully understand.

An example provided by the legal team involved the user interface for placing a “No Sweat” bet within the DraftKings app. They highlighted that crucial terms and conditions were inadequately displayed, leading users to believe they could place risk-free bets based on the company’s advertising. Instead of transparently presenting the conditions, DraftKings relied on small, inconspicuous hyperlink icons.

Furthermore, the lawsuit scrutinizes DraftKings’ bonus credit programs, alleging that users faced challenges in utilizing and withdrawing these credits due to unexpected expiration dates and deductions. Numerous complaints were reportedly lodged with the Better Business Bureau and state gambling regulators regarding DraftKings’ practices.

The legal team also raised concerns about DraftKings’ alleged targeting of vulnerable young men, suggesting that the platform is engineered to foster gambling habits among customers. Notably, DraftKings has faced legal challenges in Massachusetts and Illinois recently, despite reporting substantial revenues of $4.77 billion in the previous year.

The ongoing legal disputes underscore the complexities and controversies surrounding promotional practices within the sports betting industry, emphasizing the importance of transparency and consumer protection in an evolving and highly competitive market landscape.