The Public Health Advocacy Institute (PHAI) in Massachusetts has taken legal action against DraftKings on behalf of two players who claim that the terms of a sign-up promotion were not adequately disclosed. The players, Shane Harris and Melissa Scanlon, were represented by PHAI and its Center for Public Health Litigation in a class action lawsuit.
The lawsuit alleges that the two plaintiffs were not fully informed of the conditions attached to a bonus offer from DraftKings. They claim that in order to receive a $1,000 bonus when signing up, they were required to make an initial deposit of $5,000 and gamble $25,000 on qualifying bets within a set period. The plaintiffs say that they did not receive the bonus as advertised and were confused by the terms and conditions.
The lawsuit contends that DraftKings’ bonus offer was deceptive and unfair, stating that new participants in Massachusetts sports betting, like Harris and Scanlon, were unlikely to understand the cost and risk involved in qualifying for the bonus. It accuses DraftKings of knowingly designing the bonus to maximize player sign-ups, bets placed, and money spent, particularly criticizing the requirement of $25,000 in gambling to qualify for the offer. The lawsuit also emphasizes the addictive nature of gambling products and the need for marketers to take special precautions to minimize addiction risk.
In response to the lawsuit, PHAI executive director Mark Gottlieb called on DraftKings to cease such promotions and accused the company of misleading thousands of people in Massachusetts. The lawsuit seeks economic damages, statutory damages, treble damages, injunctive relief, and other forms of compensation. However, DraftKings has not yet responded to the filing.
The legal action brought against DraftKings highlights the potential pitfalls of unclear and deceptive bonus terms in the gambling industry, and could have implications for other operators offering similar promotions.