Ollie Ring Gambling Expert
Ollie is a sports betting and online gaming expert, with nearly ten years writing and editing experience. He most enjoys deep-dives the fineprint of regulation or data-led reports to bring nuance to his analysis. Away...
Read Full BioSports betting giants FanDuel and DraftKings are facing legal action from the City of Baltimore.
The complaint, filed in the Circuit Court for Baltimore City, alleges that the two operators have repeatedly violated the city’s Consumer Protection Ordinance. It accuses them of deceptive and abusive practices that target vulnerable users, especially those suffering from gambling-related harms.
The city is seeking injunctive relief, civil penalties, and a fundamental change in how these companies operate in Baltimore.
“Rather than accept a robust and profitable market, DraftKings and FanDuel have sought to guarantee their profitability by cheating, hoping to hook, and then ultimately exploit, as many users as possible,” reads the lawsuit.
Allegations of Predatory Promotions and Bonusing
The plaintiffs go on to explain what they consider to be a predatory bonusing practice. They cite new user promotions on both platforms, which offer $150 in bonus bets that must be used within seven days of signing up. On DraftKings, this is in the form of six separate $25 bets, and FanDuel’s bets are given in increments.
“In addition to giving the misleading illusion that gambling is not risky, these ‘bonus bets’ help ensure new users bet often as soon as they join the platform,” the lawsuit claims. “Defendants are not interested in people merely dipping their toes in the water: they want bettors to bet, in significant amounts, over and over.”
Further, the lawsuit goes on to lament the practice of “relentlessly” sending push notifications with calls to action to bet and bet often, thus making compulsive gambling an “inevitable result.”
“Some get hooked, and that’s the point,” according to the filing. It continues by citing recent reporting, which suggests that mobile gaming operators purposefully alter their algorithms to target those likely to suffer from gambling-related harm.
The Mayor and City Council of Baltimore lament that FanDuel and DraftKings seek to extract “maximum potential revenue” or “lifetime total value” from each user over time. It claims that “VIP programs are used to personalize the inducements to gamble, and proprietary algorithms help identify just the kind of push-notification that is most likely to induce the next bet.”
“The platforms are designed to create disordered gamblers and then exploit them,” continues the filing. “Defendants’ targeting of the vulnerable is so widely known that professional gamblers have taken to purposefully mimicking behavior of those with a gambling disorder – e.g., by programming bots to open their mobile applications in the middle of the night.”
Baltimore Public Health Impacts and Expert Testimony
Mary Drexler, Programme Director at Baltimore’s University of Maryland Center of Excellence, publicly noted that the gambling hotline staff members have been “noticing a disturbing trend….We are starting to see more calls from college-age males and their parents… As the industry booms, problem gambling is growing too, especially among 18-to24-year-old men who grew up loving sports—and their phones—and can’t restrain their mobile sports betting impulses.”
The lawsuit alleges that these operators’ practices are a clear breach of the Baltimore City Code, which makes it illegal to use unfair, abusive, or deceptive trade practices. It alleges that using “troves of data to identify, target, and exploit the most vulnerable” is unfair, deceptive, abusive, wilful, against public policy, and also prohibited by law.
This is a “first of its kind” lawsuit, says former federal prosecutor and NFL Tight End Colin Cloherty. He shared on LinkedIn: “While there have been class action cases with similar allegations, this is the first lawsuit brought by a municipality against DraftKings and FanDuel.”
The Plaintiff points to Flutter’s safeguarding policy in the United Kingdom regarding how these companies should behave in Baltimore. In the UK, there are financial checks and restrictions on VIP programs, which are absent across the United States.
