DraftKings is facing another class-action lawsuit in New York district court over allegations of deceitful and unethical promotions and advertising.
In a filing with the U.S. District Court for the Eastern District of New York, Clara De Leon and Eric W. Mirsberger Jr. assert that the Boston-based operator has been “deceiving New Yorkers and misleading them” into betting larger sums and more frequently.
The lawsuit takes issues with DraftKings’ use of language such as “risk-free bet” or “no sweat bet.” The plaintiffs allege that while those promotions falsely promise new users that they will get free money which they can wager without risk, DraftKings increases users’ propensity to gamble by refunding such wagers via bonus bets rather than real money.
Alleging that DraftKings uses these promotions to entice “gambling-naive customers” like the plaintiffs in question, the suit added that the company does not clearly communicate that those signing up for “no sweat” promotions were at risk of losing their money and needed to make an additional winning bet in order to get some of their money back.
Through this practice and others, the lawsuit argued that DraftKings attempts to instill long-term gambling habits in new users by forcing them to make many bets to comply with the fine print.
Latest lawsuit accuses DraftKings of targeting the vulnerable
The filing also claimed that when DraftKings realizes that users are betting savvily, the company limits the size and frequency of bets the users can make.
The lawsuit also accused DraftKings of deliberately targeting players it should know are experiencing gambling addictions by pairing them with VIP Hosts. The plaintiffs claim that these VIP Hosts “milk them for every dollar they have” via unethical tactics such as luring them back with promotions that require more deposits and wagers.
“As expected, some of these targeted people developed debilitating gambling addictions as a result of DraftKings’ carefully orchestrated schemes to draw them in with misrepresentations and then force them to engage in habit-forming behavior to meet the promotional terms as they chase after DraftKings’ illusory promises,” stated the suit.
Ultimately, the accusations assert that DraftKings broke New York laws regarding false advertising, responsible gambling messaging, intention misrepresentation, fraudulent inducement, unjust enrichment and negligence.
The plaintiffs are seeking injunctive relief and compensatory damages.
“Risk-free” language has drawn other lawsuits
DraftKings is also already facing several lawsuits related to similar allegations.
In Massachusetts, a class-action suit regarding “risk-free” bets that was filed by two residents, working with the Public Health Advocacy Institute, is moving forward after a judge denied the operator’s motion to dismiss.
This isn’t even the first such lawsuit in the state of New York. A pending U.S. District Court for the Eastern District of New York filing claims intentional misrepresentation and fraudulent inducement over DraftKings’ marketing practices for first-time deposit bonuses.
And DraftKings is the defendant in lawsuits filed in Illinois, Kentucky and New Jersey alleging the use of “false promises and misrepresentations” regarding its “no-sweat” promotions.
