A federal judge has dismissed a proposed class action lawsuit brought against DraftKings, finding that the company’s promotional advertising.
A federal judge has dismissed a proposed class action lawsuit brought against DraftKings, finding that the company’s promotional advertising for a $1,000 deposit bonus was not materially misleading under New York law.
In a 23-page memorandum and order issued on 28 July, US District Judge Margo K. Brodie granted DraftKings’ motion to dismiss, concluding that the promotional terms were sufficiently disclosed and that the plaintiff’s claims failed to state a plausible legal basis for relief.
The complaint had been filed by New York resident Nerye Aminov in state court and later removed to the US District Court for the Eastern District of New York.
It alleged that DraftKings engaged in deceptive marketing practices by advertising a “$1,000 Deposit Bonus” that required complex conditions not evident in its headline messaging.
Aminov claimed that he was misled into depositing $500 into a DraftKings account based on the promotion, believing he would receive a larger bonus in return, but was ultimately credited only $100.
The lawsuit alleged violations of New York General Business Law (GBL) §§ 349 and 350, as well as common law claims for fraudulent inducement, intentional misrepresentation, and unjust enrichment.
However, Judge Brodie found the core of Aminov’s claims, that consumers were deceived by the promotion, could not be substantiated.
The court emphasised that the promotion’s terms, including the requirement to deposit $5,000 and wager $25,000 within 90 days to earn the full $1,000 bonus, were fully disclosed on the same screen as the deposit interface.
It found the terms were not hidden or buried in fine print, but rather presented in comparable font and format as other on-screen elements.
Disclaimers valid in gambling promos
Acknowledging precedent that permits disclaimers to defeat deception claims when disclosures are clear and prominent, the court determined that the promotional language, including the “up to $1,000” qualification, would not mislead a reasonable consumer.
In doing so, the court addressed the inherent nuance of advertising language and clarified that the legal standard hinges on the expectations of an objectively reasonable consumer.
The judge also rejected an argument that a customer must affirmatively assent to the promotional terms or that additional mechanisms were necessary to verify consumer understanding.
Instead, the court pointed out that because the terms were integrated into the deposit process and viewable prior to transaction completion, full disclosure had been achieved.
The court did not reach the question of injury, having already concluded the promotion was not materially misleading.
Merely transferring money into an account did not constitute a monetary loss, the court also reasoned, especially when the funds remained under the account holder’s control and could be withdrawn.
Unjust enrichment claim falls apart
The plaintiff’s receipt of a $100 bonus was cited as further undermining the plausibility of his injury claims.
The court also dismissed Aminov’s claim for unjust enrichment, finding that it repeated the same facts as his other claims and did not allege any separate harm.
While plaintiffs can plead unjust enrichment as a backup argument, the judge said such a claim cannot stand on its own if it is essentially identical to other claims that have already been thrown out.
In addition, the judge considered Aminov’s claims for fraudulent inducement, intentional misrepresentation, and a request for injunctive relief to be abandoned, because he did not respond to DraftKings’ arguments against those claims in his legal brief.
In granting the motion to dismiss in full, Judge Brodie’s ruling highlights the legal onus on the plaintiff not only to articulate the misleading nature of an advertisement, but to do so in light of the actual disclosures presented to them.
DraftKings’ legal defence relied heavily on the argument that the promotion’s structure was standard within the online gaming industry and was sufficiently transparent.
By prevailing at the pleading stage, DraftKings avoided discovery and the potential certification of a class action, thereby alleviating substantial litigation risk.