DraftKings is returning $3 million to customers in Connecticut following an investigation by the state’s Department of Consumer Protection (DCP) into the operator’s bonus offers.
The DCP reached a settlement with DraftKings requiring the Boston-based sports betting and fantasy giant to return funds to approximately 7,000 consumers in Connecticut.
The department initiated an investigation into DraftKings amid allegations of the operator violating gaming law through its casino deposit and general bonus offers between October 2021 and January 2023. DraftKings allegedly violated Connecticut gaming laws by offering bonuses that promised a particular deposit match or bonus bet amount but included a playthrough requirement that was not expressly marketed by the company. DraftKings avoided any further legal or regulatory repercussions through its settlement with the DCP.
According to the settlement agreement, DraftKings “denies all allegations” and “denies any and all liability or wrongdoing.”
DraftKings required to display playthrough requirements in ads
The settlement requires DraftKings to not market or advertise online casino bonuses that “require a consumer to play through their deposit and bonus more than one time without clearly disclosing the required playthrough to the patron.”
DraftKings is also required to “list the type of currency of the bonus award or payout” of its bonuses in Connecticut whether in U.S. dollars of the operator’s virtual currency.
“DraftKings is committed to operating in compliance with all regulatory requirements,” a DraftKings spokesperson told SBC Americas. “We value our relationship with the Connecticut Department of Consumer Protection and will continue to work collaboratively with them.”
Connecticut residents who participated in DraftKings’ bonus offers during the period will be refunded within 60 business days of the finalization of the settlement. After 180 days, DraftKings must notify the DCP players who have not cashed a check or received payment.
As part of its settlement agreement, DraftKings will provide its workforce with annual training on legal marketing and advertising practices in Connecticut. The company will also spend $50,000 to support consumer complaint resolution programs and education.
Bonus offers lead to legal woes for DraftKings
This is not the first time the operator’s promotional offers have faced scrutiny.
While the settlement agreement did not specify exactly which offers were involved in the investigation, but the sign-up offer has been the subject of a number of lawsuits.
One case in Massachusetts is moving towards a trial, while several others are still pending a motion to dismiss.
Earlier this year, five DraftKings customers filed a lawsuit in the Eastern Pennsylvania District Court taking issue with the operator’s $1,000 deposit bonus offer. The suit alleges DraftKings of providing a bonus offer that has terms that are complex and difficult to understand. The suit also takes issue with their substantial playthrough requirements.
“In reality, DraftKings has created an all-upside opportunity only for itself: the hidden terms of its promotions require users to deposit and gamble almost exclusively with their own money, which they almost always lose,” the suit reads.
The lawsuit points to a DraftKings promotion from 2023 that required players to playthrough both the deposit amount and the bonus ten times each in order to maximize the full value of a $2,000 deposit match bonus offered by the operator’s casino platform.
The percentage of credited playthrough amounts was based on which game was played.
The plaintiffs argued that DraftKings is legally negligent and it is violating state consumer protection laws with unjust and intentional misrepresentation. The five DraftKings customers taking legal action are seeking damages for qualifying members of the class.
