A federal judge in New York has dismissed a class-action lawsuit that alleged that DraftKings‘ offer of a deposit bonus of up to $1,000 was “deceptive.”
Margo K. Brodie, the chief judge of the U.S. District Court for the Eastern District of New York issued a ruling on July 28 that plaintiff Nerye Aminov failed to provide a legal basis for the lawsuit. Brodie ultimately found that any “reasonable” customer would have understood the terms of the promotion, which DraftKings had clearly stated.
Aminov sued DraftKings in December on behalf of himself and others, alleging that the online gaming giant committed intentional misrepresentation, fraudulent inducement and unjust enrichment through a “fraudulent and misleading promotion.” At the heart of the issue was a promotional offer that advertised a $1,000 deposit bonus. Aminov claimed the offer was deceptive and that he was misled into depositing $500 in pursuit of a larger bonus than the $100 he received.
DraftKings denied the plaintiff’s assertion and filed a motion to dismiss, arguing among other things that there was no misleading advertising and that Aminov could not substantiate his claims of financial loss or real or potential harm as a result of the promotion.
In plain sight of plaintiff
Brodie agreed with the operator. She wrote in her decision that the three requirements of the offer were “prominently” and “conspicuously” displayed in full and were not hidden, buried, in small print or otherwise obfuscated.
The terms clarified that the actual bonus paid would be 20% of the amount deposited, up to a maximum bonus of $1,000, that the user must deposit $5,000 to be eligible for the full $1,000, and that the user would need to wager a cumulative total of $25,000 on daily fantasy contests, sportsbook (at -300 odds or longer), casino products or any combination thereof to receive the maximum possible bonus amount.
“Plaintiff fails to allege that the promotion could deceive a reasonable consumer because the promotional terms fully disclosed the requirements to be eligible for the full value of the promotion in a conspicuous manner,” wrote the judge. She also noted that DraftKings clearly stated near the top of the deposit screen that users “will receive a 20% deposit bonus up to $1,000! Bonus funds are earned as you play.”
“Prior to depositing funds into a DraftKings account, a reasonable consumer would have seen the promotional terms that were displayed on the deposit screen,” wrote Brodie. The “reasonable consumer” approach is a standard commonly used in cases involving advertising and marketing disputes.
In addition, the judge decided that since the plaintiff did not respond to DraftKings’ arguments in support of its motion to dismiss, the court deemed Aminov’s claims abandoned.
SBC Americas reached out to DraftKings for comment on the decision.
Multiple lawsuits fixated on same bonus
DraftKings has faced lawsuits in other states that have hinged on how it advertises the $1,000 deposit sign-up offer.
The same bonus was the center of a case in Massachusetts, where two residents filed suit in late 2023 against the Boston-based operator in conjunction with the Public Health Advocacy Institute. They alleged that DraftKings violated state consumer protection laws for the way it presented the bonus.
In the Bay State case, Judge Debra A. Squires-Lee denied DraftKings’ motion to dismiss last year, rejecting the operator’s assertion that the plaintiffs had not adequately described the negative impacts they felt as a result of the promotional offer.
“The overall deceptiveness of the mobile app and website, sign-up process and terms and conditions cannot be resolved without additional information,” Squires-Lee concluded, setting in motion what has, to date, been a lengthy discovery process.
The issues related to this particular bonus extend beyond the courtroom as well. Earlier this month, the operator reached a settlement deal with the Connecticut Department of Consumer Protection. As part of the settlement, DraftKings will return $3 million to customers in the state that utilized a similar sign-up promotion offer.
DraftKings denied any wrongdoing but will pay the settlement and agreed to several new stipulations related to the promotion, including displaying what currency bonuses would be paid in and clearly noting playthrough requirements.
