Federal Judge Dismisses Lawsuit Against DraftKings in New York

DraftKings has successfully avoided a class action lawsuit in New York after a federal judge ruled the company’s promotional campaign for a “$1,000 Deposit Bonus” did not mislead consumers.

Good To Know

• Terms and conditions must be clearly displayed for gambling promotions to be legally valid.
• DraftKings’ bonus required a $5,000 deposit and $25,000 in wagers within 90 days.
• Massachusetts recently fined DraftKings $450,000 for unrelated credit card violations.

The lawsuit, filed by Nerye Aminov, alleged DraftKings’ promotion tricked players into depositing money under false expectations. Aminov claimed he deposited $500 expecting a full $1,000 bonus but only received $100.

On July 28, Judge Margo K. Brodie of the U.S. District Court for the Eastern District of New York dismissed the case, stating the company clearly disclosed the promotion’s terms. The required conditions—depositing $5,000 and wagering $25,000 within 90 days—were displayed in comparable font next to the bonus offer at the point of deposit.

Judge Brodie ruled there was no violation of New York’s General Business Law or common law. “Disclaimers in gambling promotions are valid when clearly communicated,” she noted. The decision highlighted that users had full access to the terms before completing their transactions, undermining any claim of deception.

The court also dismissed Aminov’s misrepresentation and unjust enrichment claims, stating they overlapped with the already-dismissed statutory violations. Aminov did not respond to DraftKings’ arguments for dismissal, further weakening the case.

Although the operator avoided litigation in New York, it faces regulatory penalties elsewhere. The Massachusetts Gaming Commission (MGC) fined DraftKings $450,000 for allowing players to fund sports wagers with credit cards, which is prohibited under state law.