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Read Full BioMichigan resident Michael Koester has filed a lawsuit against DraftKings, alleging that the company violated state laws regarding self-imposed deposit limits.
The complaint alleges that DraftKings violated laws in Michigan as well as other states, including Colorado, Connecticut, Indiana, Iowa, Louisiana, and New York.
Specifically, the states dictate that gambling platforms must not allow users to increase self-imposed limits without first giving the individual a 24-hour cooling-off period.
By not enforcing this delay, Koester says DraftKings failed to prevent his “destructive gambling cycle, which caused him significant harm.”
Player Lost Over $25K at DraftKings
In his lawsuit, the plaintiff includes screenshots showing the platform allowed him to remove self-imposed limits on multiple occasions between 2022 and 2023. He claims this led to increased losses on the platform, totaling more than $25,000.
He notes that other online gambling platforms, including FanDuel, BetMGM, and tribal casinos, correctly impose a 24-hour waiting period.
Koester is bringing the lawsuit on behalf of all DraftKings users who were able to increase their self-imposed usage limits without the required delay. It claims that the aggregate amount exceeds $5 million and demands that DraftKings repay that money.
As is customary for these types of lawsuits, the filing asks for treble damages, as well as punitive damages and legal expenses.
DraftKings Facing Multiple Lawsuits
DraftKings is also facing lawsuits in Illinois and New Jersey over its free bet promotions. Federal judges ruled the lawsuits could proceed last month. In many states, including Illinois and New Jersey, gambling companies are prohibited from using terms such as “risk-free” in promotions that require users to use their own funds.
DraftKings ran a campaign in the states that promised “ALL WIN NO RISK” and “New customers bet risk free up to $100,” but users were only given a free bet token if their bets lost rather than being refunded in cash. The judges ruled that this misled customers who could reasonably assume that they would be refunded in cash if their bets lost.
The company is also facing a lawsuit in New York from a blind user who claims the website fails to provide equal access for visually impaired users.
While these lawsuits have been filed by individual users, the city of Baltimore took legal action against both DraftKings and FanDuel last year. The city alleges the betting platforms intentionally encourage problem gambling through deceptive practices.
That lawsuit stated, “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.”
The complaint alleges that one way the company does this is by violating state laws that are designed to protect problem gamblers.
