Attorneys have filed a class-action lawsuit in New York, accusing DraftKings of deceptive practices, misleading residents into betting, and losing significant amounts of money.
The Boston-based online gambling giant is now facing legal challenges over deceptive marketing and predatory practices in five states: New York, Massachusetts, Illinois, Kentucky, and New Jersey.
The complaint, filed by civil rights specialists Loevy + Loevy on behalf of plaintiffs Clara De Leon and Eric W. Mirsberger Jr., alleges that DraftKings misled New Yorkers with promotions such as “risk-free bets” and deposit match offers.
DraftKings Faces Class-Action Lawsuit in New York Over Alleged Deceptive Practices
The complaint, filed by the civil rights law firm Loevy + Loevy on behalf of plaintiffs Clara De Leon and Eric W. Mirsberger Jr., alleges that DraftKings misled New Yorkers with promotions such as “risk-free bets” and deposit match offers.
The plaintiffs contend these marketing tactics were designed to exploit gambling-naive users, encouraging them to bet more frequently and lose more considerable sums of money.
Misleading “Risk-Free” Promotions
Central to the lawsuit is DraftKings’ advertising of ‘risk-free bets,’ which plaintiffs allege were anything but. Users enticed by the promise of no-risk wagers found that their original stakes failed to be refunded as cash but instead replaced with non-withdrawable bonus bets. These bonus bets required additional wagering to unlock cash value, a process obscured in the promotions’ fine print.
“DraftKings’ activities in New York are a textbook example of its pattern of skirting and sometimes flat-out ignoring laws and regulations intended to protect consumers,” the complaint states.
It later adds that “DraftKings’ conduct was unfair and deceptive in that DraftKings used and employed deception, fraud, false promises, and misrepresentations about the nature of the no-risk promotions.”
Predatory Tactics and Targeting Vulnerable Gamblers
The lawsuit accuses DraftKings of deliberately targeting individuals exhibiting signs of gambling addiction. According to the filing, DraftKings assigns VIP Hosts” to high-value gamblers, not to encourage responsible play, but to keep them playing with promotions requiring further deposits.
One plaintiff, who lost over $45,000 in under a year, reportedly had daily contact with multiple VIP Hosts showering him with new offers.
“This is deceptive marketing, plain and simple,” says Mike Kanovitz, the partner at Loevy + Loevy, who is leading the litigation. “We do not tolerate corporations lying in any industry.
In the context of gambling, where the risk of addiction is so well understood, corporate deception is particularly cruel and abusive, and can even be criminal. It must be punished to the full extent of the law.”
Widespread Legal Scrutiny
New York’s lawsuit is part of a broader wave of litigation against DraftKings. Similar complaints in Massachusetts, Illinois, Kentucky, and New Jersey allege that the company’s promotions falsely promise financial benefits while downplaying or hiding the significant risks involved.
DraftKings has also faced regulatory penalties, including a $250,000 fine in Ohio, where the company displayed advertising outside a college football stadium and was found to have targeted customers who were under the State’s legal betting age.
The plaintiffs seek ‘injunctive relief, actual, statutory and punitive damages to compensate themselves and the Class for the injury inflicted on them by DraftKings and to prevent DraftKings from continuing to deceive consumers.’
