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The well-known sports betting behemoth DraftKings is in danger of facing a class-action lawsuit in its home state of Massachusetts. The Center for Public Health Litigation, located at Northeastern University, and the Public Health Advocacy Institute (PHAI) have declared their intention to take legal action in relation to an alleged deceptive marketing involving a $1,000 incentive given to new bettors in Massachusetts.
The claim that DraftKings consumers were not properly informed about the terms associated with the promised $1,000 bonus is at the center of the upcoming court action. According to the complaint, in order to be eligible for the bonus, players had to deposit $5,000 and put $25,000 worth of bets within a ninety-day period.
In order for these wagers to be eligible for the offer, they also had to have odds of at least -300. According to the complaint, even if these requirements were satisfied, bettors would only get “non-withdrawable credits,” not the real bonus that was promised.
Executive Director of PHAI Mark Gottlieb emphasized the experiences of two plaintiffs who were identified in the case: Melissa Scanlon and Shane Harris. The lawsuit claims that a greater number of Massachusetts consumers were duped by vague bonus conditions.
Disputing the claims made by PHAI, DraftKings expressed its intention to defend itself against the lawsuit. The company stated that it had attempted to engage in an in-person dialogue with PHAI to address concerns but was met with legal action instead.
Massachusetts entered the online sports betting market in March, allowing a select group of mobile operators to legally accept wagers in the state. However, the industry faced challenges related to marketing rules even before the launch, prompting regulators and lawmakers to adjust rules to ensure fair practices.
Richard Daynard, president of PHAI and law professor at Northeastern University, compares the legal challenges experienced by Big Tobacco businesses to those faced by online gambling platforms. Daynard alleges that DraftKings engaged in unfair business practices by intentionally designing its offer to increase consumer sign-ups, wagers, and spending, considering the addictive nature of gambling goods.
The identified plaintiffs demand economic damages, statutory damages, triple damages, injunctive remedies, and any other action deemed reasonable, even though they do not allege any harm. The complaint also demands that DraftKings stop running such deals going forward.