DraftKings Faces Legal Challenge over Alleged Player Exploitation

Leading US online sports wagering company DraftKings faces another class-action lawsuit. This newest legal challenge, filed in the Southern District of New York and spearheaded by Clara De Leon and Eric W. Mirsberger Jr., accuses DraftKings and its subsidiary Crown NY Gaming LLC of deceptive advertising and consumer manipulation.

The Operator Allegedly Offered Misleading Bonuses

The lawsuit primarily centers on DraftKings’ marketing practices, especially its “Risk-Free Bets” and “Deposit Matches” promotions. The plaintiffs argue that such promotions do not deliver what they promise, instead misleading and taking advantage of vulnerable users. They also allege that DraftKings knowingly exploits such offers to mislead users into wagering more than they might otherwise.

Plaintiffs point out that customers who lose on so-called “Risk-Free” bets get non-cash “Bonus Bets” rather than refunds on their original wagers. According to the lawsuit,  this tactic encourages users to reinvest these credits into additional bets, fostering habitual gambling. It adds that such practices reportedly disproportionately affect vulnerable groups, including individuals struggling with gambling harm.

One of the most damning allegations is DraftKings’ alleged use of player data to single out customers showing addictive tendencies. The company then reportedly assigns such players “VIP Hosts” specially trained to encourage further betting, offering personalized free bets, luxury gifts, and exclusive experiences designed to keep a gambler as engaged as possible.

DraftKings Faces Other Similar Lawsuits

This case echoes a similar December 2024 lawsuit by Lisa D’Alessandro, which accused DraftKings of enabling her husband’s gambling addiction. As a result, their family lost almost $1 million, leading to severe financial hardship. The D’Alessandro lawsuit highlighted that DraftKings used VIP Hosts who encouraged higher stakes betting, paying daily attention to her husband.

Such legal challenges coincide with increased scrutiny directed at the USA’s online sports betting sites over aggressive marketing practices. While DraftKings has publicly reiterated its commitment to responsible gambling and stressed that it only seeks to provide entertainment for casual bettors, critics argue that its strategies disproportionately capitalize on problem gamblers.

The newest lawsuit seeks injunctive relief and significant damages, alleging violations of New York’s consumer protection laws and common law principles. If successful, it could force DraftKings to rethink its promotional strategies and consumer practices. The case also raises ethical questions regarding the rapidly growing sports betting industry and the delicate balance between consumer protection and financial gains.