DraftKings Sports finds itself in hot water yet again.
The Middlesex Superior Court has ruled that a lawsuit against DraftKings Sportsbook over one of their welcome offers. The Public Health Advocacy Institute (PHAI) filed the lawsuit, representing a group of bettors. The lawsuit alleges that the bettors were misled about the offer and preyed on by DraftKings due to their inexperience.
While the lawsuit is still in its early stages, the ruling is a bad sign for the industry-leading sportsbook.
The legal challenge focuses on DraftKings’ $1,000 Deposit Bonus, available to all new players. While the offer is advertised as a $1,000 deposit match, the operator only does so for 20% of the original amount. That means a bettor must deposit $5,000 to receive the entire bonus.
In addition to the wording around the deposit match, the lawsuit also states that DraftKings did not clarify that the bonus would be in the form of Bonus Bets. Those bets cannot be withdrawn for cash and must be wagered before expiring.
“The very sort of gambling this promotion requires of new customers ... is not, by any definition, responsible play,” Harry Levant, the PHAI gambling policy director Harry Levant said after the motion failed. “Instead, it’s a recipe for addiction. Yet DraftKings hypocritically extorts its customers to ‘gamble responsibly’ in every advertisement. I don’t believe that’s what DraftKings actually wants.”
The Massachusetts Gaming Commission (MGC), which regulates sports betting in the state, has a long history of battles with operators. One of the most prominent issues between the two sides is how operators advertise. The regulator has penalized several online sportsbooks over the issue, including Barstool Sportsbook, which chose to exit the US market amid a dispute.
While the lawsuit does not directly involve the MGC, that does not mean they will remain on the sidelines. Depending on how the lawsuit plays out, the regulator could pursue its recourse against DraftKings and its controversial welcome offer.
While DraftKings remains an industry giant, this ruling represents another public embarrassment at the worst time for the operator.
The sportsbook recently announced it would add a surcharge to betting winnings in four markets to offset rising tax rates. However, a large public uproar led to the cancellation of the plan just days later.
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DraftKings stunned the sports betting industry by announcing a new surcharge on all customer winnings in four US markets starting in 2024.
