DraftKings Hit with Class Action Lawsuit Over Allegedly Problem-Riddled Sports Betting National Championship

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action lawsuit out of New Jersey Superior Court alleges DraftKings did not give a fair shake to those who participated in its Sports Betting National Championship (SBNC). The plaintiff behind the 22-page complaint alleges that while proposed class members paid hefty entry fees for the SBNC based on defendant Resorts Digital Gaming, LLC’s representations, the event was instead operated in a “negligent, arbitrary, and capricious” manner. All told, the plaintiff argues the SBNC entry fee he paid was “entirely or substantially worthless.”

The complaint says the SBNC, which took place from January 11 through 13, 2019, was promoted as a competition for which amateur and professional sports bettors from across the country would travel to New Jersey to compete against each other. According to the case, the entry fee for the SBNC was $10,000, with $4,700 per entrant going toward the prize pool, $300 toward administrative costs and $5,000 allotted to participants’ accounts for use during the tournament. First place was to receive no less than $1 million, the case says.

At issue in the lawsuit is the tournament’s alleged “ever-changing—and often contradictory—set of rules.” As the plaintiff tells it, once a tournament participant placed a wager through the DraftKings platform, the defendant would “arbitrarily, capriciously, and almost universally without explanation” determine whether to accept the wager. According to the complaint, no rules were ever posted by DraftKings with regard to what types of wagers would and would not be accepted, and the defendant in fact advertised by way of its senior project manager’s Twitter account that betting limits “shouldn’t really come into play in major sports.”

“Notwithstanding this representation and the wholesale absence of any actual policy, the Defendant accepted certain wagers and rejected others in a schizophrenic and wholly irrational manner,” the complaint reads.

By way of example, the suit provides that one contestant attempted to bet on the PGA Tour Sony Open—an identifiably “major sport,” the complaint points out—only to have his wager rejected without explanation. After providing further examples, the case states that matters became more complicated due to the “wildly varied” amount of time it took for bets to be accepted or rejected, with SBNC participants locked out of access from wagered funds while the decision-making process ran its course.

When the dust settled on the SBNC, the lawsuit goes on, more than $4 million was wagered during the three-day tournament, with DraftKings reportedly collecting more than $330,000 in losses by participants. More from the suit:

“The Defendant’s arbitrary and capricious acceptance of some wagers, and rejection of other similar wagers; prompter grading of wagers for persons physically present in Jersey City; crediting some SBNC participants with winning funds from a given sporting contest upon which bets had been placed, before crediting other SBNC participants with winnings funds from the same contests on which bets had been placed; permitting at least one SBNC contestant to wager after the announced close of wagering in the SBNC; and general operation of the SBNC in an arbitrary, capricious and uniformly haphazard manner; all constitute unconscionable practices in connection with the Defendant’s sale of merchandise, in contravention of [New Jersey state law].” 

The complaint can be read below.