DraftKings is facing another lawsuit over the language it uses in its bonus promotions, while FanDuel asks for a dismissal of another suit.
DraftKings is no stranger to litigious attacks and is now facing another out of New York. At the same time, FanDuel is hoping it can get out of a lawsuit brought against it by former Jacksonville Jaguars employee and embezzler Amit Patel.
DraftKings, and its subsidiary Crown NY Gaming LLC, face a class-action lawsuit filed by Clara De Leon and Eric W. Mirsberger Jr. in the Southern District of New York.
The case, which was filed also on behalf of similarly situated plaintiffs, centres on allegations of deceptive advertising and consumer manipulation, claims DraftKings misled users with promotions such as “Risk-Free Bets” and “Deposit Matches.”
The complaint, like previous complaints against the operator, asserts that DraftKings’ promotional practices intentionally exploit vulnerable users, including those with gambling addictions.
Advertisements allegedly lure new users with promises of risk-free betting, only for customers to discover that terms and conditions render these promotions less beneficial than advertised.
For example, users who lose “risk-free” bets are credited with non-cash “Bonus Bets” instead of beingrefunded their original stakes. The plaintiffs argue that such practices foster habitual gambling and mislead consumers into wagering more than they might otherwise.
DraftKings is also accused of using user data to identify customers with addictive tendencies and assigning them “VIP Hosts” trained to encourage further betting.
The lawsuit claims that these practices exacerbate gambling addiction, particularly among young men.
The class action lawsuit seeks injunctive relief and significant damages for affected users, alleging violations of New York’s consumer protection laws and common law principles.
DraftKings’ CEO has publicly stated that the platform seeks to attract users who gamble for entertainment, excluding those who consistently profit. Yet, lawsuits allege the company prioritises profit over consumer welfare, as evidenced by its promotional strategies and VIP programmes.
FanDuel looks to dismiss legal challenge
Meanwhile, FanDuel’s legal team has moved to dismiss a suit brought against it by Patel, arguing that the claims made are legally unsound and lack jurisdiction over parent company Flutter Entertainment.
The motion emphasises that Patel’s own criminal conduct — embezzlement — bars him from seeking recovery under Florida’s wrongful conduct rule. Additionally, the defence argues that Patel has not substantiated claims of specific misconduct or regulatory violations by FanDuel or Flutter.
In a federal lawsuit filed in the Southern District of New York, Patel has accused FanDuel, Flutter, and other entities of failing to act responsibly in their engagement with gambling addicts.
Patel, who embezzled over $20m from his employer and spent a significant portion on FanDuel-operated fantasy sports contests, alleges that FanDuel facilitated and profited from his addiction.
The complaint includes claims of negligence, intentional infliction of emotional distress, and violations of Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA).
According to court filings, Patel alleges FanDuel incentivised his gambling through financial promotions, luxury trips, and other inducements, despite allegedly having knowledge of his addiction.
FanDuel contends that Patel’s claims fail to meet the legal threshold for establishing duty or causation and are insufficient to support allegations of intentional wrongdoing.
Patel previously included Fox Corporation and Boyd Gaming in the suit, but dropped them earlier this month.