DraftKings Faces Class Action Over Misleading Gambling Promotions

A lawsuit filed on April 18 in the US District Court for the Eastern District of Pennsylvania alleges that DraftKings has structured its business model to exploit at-risk young menImage Sources: Shutterstock.com

DraftKingsfinds itself in hot water again as Pennsylvaniaresidentslaunch a federal class action lawsuitagainst 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 Pennsylvaniaon April 18. The lawsuit claims DraftKingshas 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 ngaking 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 plaintiffsays a VIP host pushed him to bet more and deposit faster, even though he had asked to limit his gambling before. AnotherclaimsDraftKingslet 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 lawsuitalso 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 DraftKingsused customer information to spot risky behaviorsand then targetthose users with custom incentives to boost engagement. Some say this approach went too far, putting profits ahead of responsible gambling.

The plaintiffs want money backfor 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, DraftKingsnow faces legal challenges in New Jersey, Illinois, andKentuckyover 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.