DraftKings Lawsuit Alleges Sportsbook’s ‘Risk-Free’ Betting, Cash Bonus Promotions Are Bogus

DraftKings has been hit with a proposed class action lawsuit that accuses the sports betting platform of luring consumers with deliberately misleading promotions and false promises of “risk-free” first bets, leading many gamblers to develop addictions.

The 73-page DraftKings lawsuit says that the sportsbook, the biggest player in New Jersey’s online sports betting industry, has enticed users with glittering promotions such as $1,000 signup bonuses, “No Sweat” first bets and promises to match a consumer’s deposit up to $2,000. The class action suit contends, however, that these offers are often accompanied by complex and confusing terms and conditions that are hidden from users until after they have made their deposits to the platform.

Consequently, many consumers have wagered and lost thousands—or even hundreds of thousands—more than they intended and/or developed a serious gambling addiction, the case alleges, adding that DraftKings in fact mines user data to spot the "most potentially-lucrative [sic]" players.

According to the complaint, DraftKings “intentionally targets” young men vulnerable to developing a gambling addiction and deliberately designed its interface to “prevent them from understanding the terms” of its advertised offers.

“DraftKings advertises an all-upside gambling experience, falsely promising new users that they will get free money which they can wager without any risk,” the complaint shares. “In reality, DraftKings has created an all-upside opportunity only for itself: the contracts require new users to deposit and gamble almost exclusively with their own money, which they almost always lose.”

“Risk-free” bets?

The filing charges that even in the face of rising gambling addiction rates in New Jersey, defendants DraftKings, subsidiary Crown NJ Gaming Inc. and DGMB Casino LLC—through which the sportsbook operates its online platform in the state—have long targeted their advertisements at new users, naive gamblers and those most likely to lose money on the site.

For one, the lawsuit asserts that DraftKings’ offer of “risk-free” initial bets to new users is intentionally deceptive given that “there is nothing free of risk about the transaction.” Crucially, hidden fine-print terms that the platform allegedly “knows will be overlooked and misunderstood” require that the consumer deposit funds and place the bet with their own money, which, if lost, is returned in the form of a “Bonus Bet” rather than withdrawable cash, the case says. These expirable “Bonus Bets” hold no cash value and can be used only for further gambling on the platform, the suit specifies.

Per the complaint, DraftKings also promotes a bonus of up to $1,000 for new customers who open an account and deposit funds. However, the terms of this promotion make it “inordinately unlikely” for a consumer to get the advertised $1,000 because, in reality, the platform only matches 20 percent of a user’s deposit and requires them to play through 25 times the amount of bonus money awarded, the filing alleges.

“In plain terms—which the fine print regarding this promotion deliberately obscures and the large-print advertisements for this promotion completely misrepresent—in order for a user to get a $1,000 bonus, they actually need to deposit five times that amount ($5,000), and then, within 90 days, risk $25,000 on DraftKings sports bets,” the lawsuit relays.

In addition, the $1,000 bonus is not rewarded as withdrawable cash funds but as “DK Dollars” that, like “Bonus Bets,” hold no monetary value and must be used on the platform, the suit explains.

Moreover, the case takes issue with DraftKings’ casino deposit match promotion, whereby the company promises to match 100 percent of a user’s deposit up to $2,000. According to the complaint, this offer is subject to terms that are nearly impossible to satisfy and “egregious” playthrough requirements that must be fulfilled within a seven-day period.

The complex terms of the deposit match promotion also give DraftKings the ability to seize all of a consumer’s funds should they fail to complete the requirements, the filing states. This routinely results in users accidentally losing all the money they deposited, the lawsuit claims.

“In reality, this promotion ends up only one of two ways: users either lose their initial deposit because they are unable or unwilling to satisfy the unreasonable play-through requirements that are only revealed to users after they have begun the promotion, or they make far more bets than they initially intended and risk developing a dangerous gambling addiction,” the suit contends.

To make matters worse, DraftKings often opts customers into the deposit match promotion without their knowledge after they place a bet on the platform, the case alleges. Once users realize their money is “locked up” in the promotion, they are faced with the choice between trying to recoup it by gambling extensively in a short window or forfeiting the funds entirely, the complaint describes.

The filing accuses DraftKings of intentionally misrepresenting the nature of its promotions and misleading users about the material dangers and risks associated with them.

Who’s covered by the DraftKings lawsuit?

The DraftKings lawsuit looks to represent anyone who has participated in a DraftKings casino deposit match promotion and lost part or all of their initial deposit or winnings.

In addition, the lawsuit seeks to represent anyone who wagered in New Jersey and opted into a DraftKings promotion advertising a “risk-free” or “no sweat” bet and lost.

Finally, the suit looks to cover anyone who opened an account and deposited money while in New Jersey in response to a DraftKings $1,000 bonus promotion for new customers.

I’ve lost money through a DraftKings promotion. How can I join the lawsuit?

You don’t need to do anything right now to join, sign up for or add your name to the class action lawsuit detailed here. Usually, you need to act only in the event of a class action settlement, at which point class members—that is, those covered by the deal—may be notified with details about the case and instructions on how to file a claim for a settlement rebate.

It can take months or even years for a class action suit to be resolved, so be patient and check ClassAction.org often for updates on the top class actions.

Check out ClassAction.org’s lawsuit list for the latest open class action lawsuits.