DraftKings faces class action lawsuit over alleged deceptive marketing
Boston-based DraftKings is named in a class-action lawsuit filed in Superior Court in Middlesex, Massachusetts. The lawsuit alleges that the sports betting provider deceived customers through cleverly designed marketing efforts.
The Public Health Advocacy Institute (PHAI), known for its successful lawsuits against Big Tobacco, claims in its lawsuit against the sports betting leader that its advertising scheme lured consumers to sign up. The legal action focuses on a recent sign-up promotion by DraftKings in Massachusetts that claimed to offer new bettors a "$1,000 bonus" when they signed up for an online betting account.
The lawsuit alleges that customers will not receive the $1,000 bonus bet until they deposit $5,000 and wager $25,000 within 90 days. The fine print also requires bettors to bet $25,000 at odds of -300 or better.
The class action lawsuit alleges that DraftKings advertised: "Join DraftKings Sportsbook." New customers will receive a $1,000 DK deposit bonus! ” There is a “View Terms” link below the ad.
Based on DraftKings' advertising, a new consumer cannot reasonably be expected to understand that there will not be a $1,000 bonus on his or her first deposit, but instead he or she will only receive a $1 bonus for every $25 bet i.e. Earnable. In order to receive the bonus, new customers must play the game and risk $25,000 within 90 days,” the lawsuit states.
On January 31, Massachusetts began legal sports betting at the state’s three brick-and-mortar casinos. Online sports betting launches March 10th.
Addiction Litigation Lawyer
The DraftKings class action lawsuit was filed in part by Richard Daynard, a prominent attorney and Northeastern University law professor. In the 1980s, Daynard helped uncover evidence that Big Tobacco knew its products posed significant cancer risks.
Daynard claims that DraftKings also realized that it was operating a product that was prone to addiction and dependence. That's why he believes so-called misleading marketing techniques must end.
"Gambling Products are not typical consumer products. They are addictive," the PHAI lawsuit states. “Marketers of known addictive products should take special precautions to minimize the risk of addiction and not require gambling of $25,000 to qualify for promotional offers to new customers who may be gambling naïve.” This That’s Why Ad “This is also an unfair business practice on the part of DraftKings.”
The two lawsuits allege "unfair or deceptive practices" and "untruthful and misleading advertising." The lawsuit seeks a judgment awarding actual damages, including the promised $1,000, plus double or treble damages, reasonable costs and attorneys' fees, and any other relief.
DraftKings denies claim
In response to the lawsuit, attorneys for sports betting agents said the lawsuit has no merit.
As a customer-focused company, DraftKings takes consumer protection and responsible gaming seriously. “DraftKings respectfully disagrees with the claims and arguments of the Public Health Advocacy Institute,” a statement from DraftKings read.
DraftKings said it has attempted to work with PHAI out of court to resolve the matter.
"Unfortunately, the institute ignored our repeated attempts to engage in face-to-face dialogue to carefully consider their concerns and instead filed suit. DraftKings intends to vigorously defend this lawsuit," the company added.
Advertisements in the sports betting industry face strict scrutiny. In Massachusetts, state gambling regulators have banned sportsbooks from advertising sign-up bonuses or other promotions as "risk-free" or "free."
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Source: www.casino.org
