DraftKings Faces Legal Action over Alleged Unlawful Account Deactivations

DraftKings Inc., a prominent name in online sports betting, is now the target of a class-action lawsuit filed in the US District Court for the District of Massachusetts. Plaintiffs accuse the operator of allegedly defrauding customers by unlawfully deactivating user accounts and retaining their balances, potentially exposing a widespread issue within the company’s operations.

The Class Action Levies Significant Accusations

Texas resident Eric Avila filed the class action, claiming that in August 2024, DraftKings deactivated his account while it contained a balance of $100. According to the plaintiff, the company cited a supposed violation of its terms of service. Draft Kings justified the termination by stating Avila was operating multiple accounts. However, Avila denies these allegations and argues DraftKings provided no evidence to support its claims.

The plaintiff claims DraftKings has effectively created a “catch-22” blocking him from his account and simultaneously preventing him from withdrawing the remaining funds. According to the lawsuit, this practice is part of a broader pattern, alleging that DraftKings retains millions of dollars from users with accounts deactivated under similar circumstances.

“Users cannot withdraw funds from their DraftKings account because DraftKings has decided the users do not have a DraftKings account.”

Eric Avila’s suit against DraftKings

The class-action suit seeks to represent potentially thousands of affected users, who may have been left with no recourse after the operator deactivated their accounts. Avila claims that DraftKings breached its contractual obligations, drawing attention to the company’s terms of service that guarantee users the ability to withdraw their funds at any time.

DraftKings’ Legal Trouble Is Far from Over

Avila’s class action is the third high-profile court case against DraftKings in recent weeks. A class-action lawsuit filed by Lisa D’Alessandro, whose estranged husband reportedly lost almost $1 million on the site, alleges that the company took advantage of her husband’s addiction by enrolling him in an elite VIP program. D’Alessandro alleges that DraftKings incentivized excessive gambling, bankrupting her family.

In a separate legal battle, a class action in the US District Court for the Southern District of New York alleges that DraftKings illegally shared user data with Facebook, sharing detailed information about users’ gambling behaviors and viewing habits without their consent. The lawsuit claims this practice violated federal privacy laws, including the Video Privacy Protection Act.

Legal experts suggest that the outcome of these cases could set important precedents for the online gambling industry, especially as regulators and consumer advocacy groups continue to push for greater consumer protections. As the cases unfold, DraftKings faces mounting pressure to address the accusations while maintaining the trust of its growing user base in an industry already fraught with controversy.