Massachusetts Class Action Lawsuit Against DraftKings Given Green Light

DraftKings, a popular online sports betting platform, recently faced a class action lawsuit that alleged deceptive practices in their marketing campaign offering a “$1,000 deposit bonus.” The lawsuit, filed by the Public Health Advocacy Institute (PHAI) in December 2023, claimed that DraftKings did not adequately disclose the terms and conditions of the promotion, leading to misleading advertising.

The lead plaintiffs, Melissa Scanlon and Sean Harris, accused DraftKings of not clearly outlining the requirements to receive the $1,000 bonus. Customers were required to deposit a minimum of $5,000 and wager at least $25,000 to be eligible for the bonus. Furthermore, the bonus received was in the form of a non-withdrawable site credit, which was not prominently stated in the marketing material. As a result, customers like the lead plaintiffs felt misled by DraftKings’ promotion.

Two specific cases highlighted in the lawsuit showed instances where customers faced confusion and frustration due to the unclear terms and conditions. In one case, a customer deposited less than $5,000 and did not receive the $1,000 bonus, while another customer was deemed ineligible for the bonus despite making the required deposit and wagers. These incidents occurred shortly after the launch of legal sports betting in Massachusetts in March 2023.

DraftKings attempted to have the lawsuit dismissed by filing a motion for summary judgment. However, Massachusetts Judge Debra A. Squires-Lee denied most of DraftKings’ motion on February 17, allowing the case to proceed. While the judge dismissed the claim that DraftKings misused customer personal information, the allegations of misrepresentation and false advertising were upheld and will be further examined in court.

PHAI’s executive director, Mark Gottlieb, expressed satisfaction with the judge’s decision, calling out DraftKings for their deceptive marketing tactics. He described DraftKings’ actions as an attempt to entice new customers to wager large sums of money in pursuit of a bonus that was not clearly defined.

Despite this initial victory for PHAI, the lawsuit against DraftKings is far from over. The next steps involve certifying the class and engaging in a lengthy discovery process to gather evidence of how many customers were similarly misled by DraftKings’ promotional campaign. Class-wide discovery can be a time-consuming and expensive process that may take more than a year to complete before reaching a final decision.

This lawsuit marks the first significant legal challenge against DraftKings for false advertising, signaling potential repercussions for the company’s marketing strategies. As the case progresses, it will shed light on the importance of transparent advertising practices in the online sports betting industry.