PHAI Issue Lawsuit Accusing DraftKings of Unfair Bonus Tactics

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DraftKings has become the subject of a class action lawsuit filed by the Public Health Advocacy Institute (PHAI) in Massachusetts on behalf of two players who alleged that a bonus provided by the operator was ‘unfair’ and ‘deceptive.’

According to the suit, the offer, a $1000 non-withdrawable sportsbook bonus for new customers, lacked clarity in its terms and had unattainable wagering conditions.

Under the promotion's terms and conditions, customers are required to deposit $5,000 within the first 90 days of account opening. They must also place a minimum of $25,000 in total bets to qualify for the full bonus amount.

The two players, who are also Massachusetts residents, Shane Harris and Melissa Scanlon, claimed that the promotion’s marketing misled them into thinking that a simple deposit would be enough to receive the total bonus funds.

Allegedly Deceptive and Unfair Bonus Tactics

DraftKings’ advertising of the bonus is unfair and deceptive because an eligible consumer who, by definition, is a new participant in Massachusetts sports betting, like the plaintiffs, would be unlikely to understand the cost and risk involved in qualifying for the $1,000 bonus. In fact, if the plaintiffs had understood the cost or the odds of winning the bonus, they would not have acted upon the promotion.” The lawsuit read.

DraftKings was also accused of deliberately and unfairly designing its bonus to maximize player sign-ups, bets placed and spending. The suit contended that this tactic is unfair considering the risk of gambling addiction.

The filing highlighted that operators are obligated to ensure their customers' protection from the potential risks of problem gambling under Massachusetts sports betting regulations.

Shane and Melissa are typical of many thousands of people in Massachusetts who were misled by the bonus offer and would not have signed up had they understood DraftKings’ unfair and deceptive requirements.

Mark GottliebExecutive Director of Public Health Advocacy Institute