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DraftKings faces lawsuit over “deceptive” sign-up bonus in Massachusetts

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The Public Health Advocacy Institute (PHAI) in Massachusetts has filed a class action lawsuit against DraftKings on behalf of two players alleging a bonus offered by the operator was not clear enough.

According to the suit, the two players, Shane Harris and Melissa Scanlon, are questioning a sign-up promotion from DraftKings. Massachusetts-based PHAI and its Center for Public Health Litigation have filed the lawsuit on behalf of the players.

The lawsuit alleges the two plaintiffs were not aware of the full terms of this bonus. These included them having to make an initial deposit of $5,000 (£3,992/€4,651) to receive a $1,000 bonus when signing up.

The suit adds players were also not aware they needed to gamble $25,000 on qualifying bets in a set period. If they met these terms, they would have received $1,000 in non-withdrawable credits to use on DraftKings.

Lawsuit slams bonus terms

Both Harris and Scanlon say they were confused when they did not receive the bonus stated in the promotion. Based on this, the lawsuit said the DraftKings bonus offer was both “deceptive” and “unfair”.

“DraftKings’ advertising of the bonus is unfair and deceptive because an eligible consumer who, by definition, is a new participant in Massachusetts sports betting, like the plaintiffs, would be unlikely to understand the cost and risk involved in qualifying for the $1,000 bonus,” the lawsuit said. 

“In fact, if the plaintiffs had understood the cost or the odds of winning the bonus, they would not have acted upon the promotion.

“DraftKings knew, or should have known, that its advertisement and promotion was deceptive to its target customers, who were customers new to sports betting and who were extremely unlikely to understand the details of the promotion, even if it were in readable English on the company’s platform or in a font size that a reasonable consumer could be expected to actually read.”

DraftKings criticised for “unfair” business practice

The suit also accused DraftKings of “knowingly and unfairly” designing its bonus. This, it alleges, was to maximise the number of player sign-ups, bets placed and money spent. It added that this is particularly unfair business practice due to the addictive nature of gambling.

“Gambling products are not typical consumer products,” the suit said. “They are addictive.

“Marketers of a known addictive product should take special precautions to minimise addiction risk, not require $25,000 of gambling to qualify for a promotional offer to new customers who are likely to be gambling-naive. DraftKings’ promotion is an unfair business practice for this reason as well.”

The suit added that while the plaintiffs are not alleging an addiction injury, they are seeking economic damages, statutory damages, treble damages, injunctive relief and such other and further relief.

In addition, the lawsuit calls on DraftKings to cease this and other similar promotions.

“Shane and Melissa are typical of many thousands of people in Massachusetts who were misled by the bonus offer and would not have signed up had they understood DraftKings’ unfair and deceptive requirements,” PHAI executive director Mark Gottlieb said.

DraftKings is yet to respond to the filing.

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