A number of individuals have filed suit against DraftKings and FanDuel for their marketing practices, but now a major metropolitan city is joining the fray.
The city of Baltimore has filed against the two operators for unfair, abusive and deceptive trade practices in the Baltimore City Circuit Court. Mayor Brandon Scott’s name is on the case along with the city, claiming that the two sportsbooks are using misleading promotions and corrupt VIP and retention practices to keep problem gamblers wagering with them.
Baltimore mayor says FD and DK exploiting customers
FanDuel and DraftKings are the top two operators in Maryland, with the rest of the pack far in the distance, but that has not stopped the city from taking legal action.
“But rather than accept a robust and profitable market, DraftKings and FanDuel have sought to guarantee their profitability by cheating, hoping to hook, and then ultimately exploit, as many users as possible,” the complaint reads.
The complaint took issue with the complexity of bonus offers for new customers, noting that these bonus amounts are advertised as lump sums but require users to bet their winnings in increments within a short period of time, allegedly establishing a pattern with the user of needing to bet repeatedly in a short window of time.
In addition to marketing, the complaint also attacks the VIP programs of the two operators, claiming that they not only are aware of problematic tendencies but using them to pad bottom lines.
“Indeed, reporting has shown that Defendants collect troves of user data, with one internet gaming company, owned by FanDuel’s parent company Flutter, documented to have collected at least 186 attributes for each bettor, including their propensity to gamble and susceptibility to marketing,” per the complaint.
“DraftKings and FanDuel are not content merely to expand gameplay: they employ sophisticated data analytics to identify and then exploit players showing signs of problem gambling.”
Suit cites UM research and mainstream media gambling reports
The suit relies heavily on mainstream media reporting around the sports betting industry but also utilizes homegrown research to support its conclusions. For example, the filing referenced research from the University of Maryland’s Center of Excellence on Problem Gambling that shows the problem gambling rate of online sports bettors compared to retail bettors is nearly twice as high, with rates of 11.3% and 20.8%, respectively.
The mainstream media coverage referenced in the story recount stories of VIP players attempting to quit betting and said to be enticed back to the app via added bonuses from VIP hosts.
“Upon information and belief, DraftKings and FanDuel VIP hosts and managers continue to target Baltimore users whom they respectively know or should know have a gambling disorder.”
The city is seeking the maximum amount of fines for violating the city’s consumer protection laws, for the court to mandate FanDuel and DraftKings alter their marketing practices and stop “targeting and exploiting disordered gamblers.”
“These companies are engaging in shady practices, and the people of our city are literally paying the price,” said Scott in a release. “DraftKings and FanDuel have specifically targeted our most vulnerable residents—including those struggling with gambling disorders—and have caused significant harm as a result. This lawsuit is a critical step to hold them accountable and protect all Baltimoreans.”
“FanDuel does not comment on specific allegations in pending litigation. We are confident the company operates in accordance with all laws, including those established and enforced by the State of Maryland’s Lottery and Gaming Control Commission,” a FanDuel spokesperson told SBC Americas.
SBC Americas reached out to DraftKings but has yet to hear a response. However, like FanDuel, DraftKings does have a standing policy not to comment on pending litigation.
Scott has previously supported sports betting in the state, placing a ceremonial bet when wagering first launched in the Old Line State.
