DraftKings sued over 'risk-free' marketing language, plaintiffs accuse sports betting fraud
DraftKings is named as a defendant in a class action lawsuit filed in federal court in the Southern District of New York involving alleged deceptive ratings practices by the sports betting operator.
Bronx resident Samantha Guery is the plaintiff seeking punitive and statutory damages on behalf of all others also affected by DraftKings’ financial losses, alleging injuries caused by DraftKings’ deceptive conduct. Guery's attorneys claim that DraftKings misled consumers by advertising "risk-free" first bets of up to $1,000, which were not risk-free at all.
DraftKings intentionally failed to inform customers who took advantage of the "Risk-Free Bet" promotion that they would only receive one free bet. "The offer of a '$1,000 risk-free bet' ... does not imply that the risk-free bet will be converted into a free bet and, in fact, is worth significantly less than the equivalent dollar amount," it said of the bet . complain.
Gary's proposed class action lawsuit would apply to anyone who signed up for a DraftKings account in New York and participated in the "risk-free" promotion. The lawsuit seeks a jury trial.
Litigation Allegations
Guery signed with DraftKings in July 2023 and made what she considered a risk-free bet. The bet was lost, and she realized at that moment that her money would not be easily returned.
Instead, DraftKings credited Gary’s account with a “free bet” equal to the amount of her initial losing bet. Their lawsuit alleges that deposited funds function differently than cash on sports betting platforms.
Free Bet Points are only payable after a bet has been placed. Additionally, if a credit bet wins, the player will only receive the net winnings in the form of cash, not the credits used to place the bet.
Simply put, a winning bet of $100 at -110 odds will return $190.91 to the player's account. A winning credit bet on the same line would leave the account with just $90.91 in cash available for withdrawal.
"The free bet is worth less than half the original bet," the lawsuit states. “This difference makes so-called ‘risk-free’ advertising risk-free at all.”
Gary's attorneys say DraftKings deliberately deceived consumers by including dollar signs in its promotional materials, even though it knew the monetization options for free bet balances were different from traditional currency.
Via Marketing
In recent years, sports betting has come under scrutiny from federal and state lawmakers and gambling regulators for misleading advertising. Many states now ban sportsbooks from running ads containing phrases like "risk-free" or "free bets."
Last year, DraftKings was fined $150,000 in Ohio over its "risk-free" language.
If something claims to be free or risk-free, then under no circumstances should the customer suffer a loss or risk his or her own money. " Matthew Schuler, executive director of the Ohio Casino Control Commission, said. "We do not support attempts to present the truth in small print. "
In New York, Attorney General Letitia James has also been a critic of "risk-free" sports betting ads.
James said on "Alarm" in 2022: "New Yorkers are bombarded with misleading ads...promising 'risk-free' bets and '$1,000 welcome offers' that sound like free money but often come with There are strings attached, and consumers don’t even realize it,” Consumer Reports.
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Source: www.casino.org
