DraftKings is facing a legal battle in its home state of Massachusetts regarding the sign-up offers the operator offers customers.
Anti-predatory gambling group the Public Health Advocacy Institute filed the class action last week. In the complaint, the plaintiffs Shane Harris and Melissa Scanlon argued that the welcome offer of a $1,000 sign-up bonus failed to accurately convey the terms and conditions that come with the offer.
The bonus does offer $1,000 in credits for signing up, but only if the user deposits $5,000, as the bonus is 20% of your first deposit up to a maximum of $5,000. Moreover, with play-through requirements, the terms and conditions of the offer are that users must wager an additional $25,000 on bets of certain odds over the course of 90 days in order to receive the full amount.
Harris and Scanlon argued that the average customer would not expect such onerous terms and conditions on an offer that, outside of the fine print, is advertised as a $1,000 sign-up bonus.
“The Plaintiffs did not in fact understand, and could not reasonably have been expected to understand, that in order to place bets for at least $25,000 over 90 days to qualify for the Bonus, they would have had to wager an average of more than $276 gambling on sports every day for three months,” the complaint read.
“DraftKings knew, or should have known, that its advertisement and promotion was deceptive to its target customers, who were customers new to sports betting and who were extremely unlikely to understand the details of the promotion, even if it were in readable English on the company’s platform or in a font size that a reasonable consumer could be expected to actually read.”
PHAI filed the suit in the Middlesex Superior Court. DraftKings intends to fight the case and claims it has tried multiple times to communicate with PHAI about the offer.
“As a customer-first organization, DraftKings takes consumer protection and responsible gaming seriously. DraftKings respectfully disagrees with the claims and allegations made by the Public Health Advocacy Institute. Regrettably, the Institute ignored our multiple attempts to engage in an in-person dialogue to carefully examine their concerns and, instead, filed suit. DraftKings intends to vigorously defend this lawsuit,” a DraftKings spokesperson told SBC Americas.
Prior to filing the suit, PHAI has been active in the gambling conversation within the Bay State. The group weighed in on potential daily fantasy sports regulations and have published multiple op-eds in the Boston Globe on the topic.
“Online gambling is creating a public health disaster with increasingly addictive products right before our eyes. In fact, massive advertising using unfair and deceptive promotions to hook customers on an addictive product bears an uncanny similarity to what the cigarette companies used to get away with,” said NHAI President and Northeastern law professor Richard Daynard of the suit.
Massachusetts is a state with relatively strict consumer protection laws. The suit alleges DraftKings has violated the Massachusetts Consumer Protection Act, which covers several marketing practices, including prohibitions against bait and switch advertising and deceptive advertising.
