DraftKings Class Action Lawsuit Alleges Enormous Revenue Generated by Misleading Gamblers

Sports betting app allegedly uses consumer data to target problem gamblers with personalized promotions and predatory incentives.

A group of plaintiffs have joined together to file a DraftKings class action lawsuit, alleging the sportsbook giant intentionally designed its betting service to foster gambling addiction in users, as part of a coordinated effort to maximize the bets they place, and losses they would likely incur.

DraftKings is the most dominant online sports betting website in the U.S. Although it is only allowed to solicit customers in states that have approved legalized gambling, a growing number of gambling addiction lawsuits now allege that DraftKings and similar companies have fueled a sharp rise in gambling addiction, particularly among young adults.

These lawsuits point to aggressive marketing tactics, misleading “risk-free” promotions, and app features specifically designed to encourage high-frequency betting. In states where online gambling is legal, plaintiffs argue that companies like DraftKings have prioritized profits over consumer protection, using real-time data to identify and retain users that have shown signs of compulsive behavior.

College students and young adults are particularly vulnerable, as many are still learning how to manage finances and assess risk. Rather than offering support or safeguards, these platforms allegedly target inexperienced users with personalized promotions, loyalty perks and psychological triggers that normalize betting while masking its financial consequences.

Claims are now being pursued over the platforms’ addictive nature, predatory design, and the serious financial losses suffered by users pushed into compulsive gambling habits.

In a complaint (PDF) filed by Kenneth Macek and others in the U.S. District Court for the Eastern District of Pennsylvania on April 18, class action status is being sought against DraftKings, Inc., Crown PA Gaming Inc. d/b/a DraftKings, and Golden Nugget Online Gaming LLC, indicating that all plaintiffs were preyed upon by the site’s algorithms, which intentionally encouraged gambling addictions, to maximize DraftKings’ profits.

All five plaintiffs, Kenneth Macek, Matthew Harner, Avi Setton, Lionel Alicea and Robert Walker, are Pennsylvania residents. In October 2017, the state approved a new law allowing legalized internet gambling. The popularity of which exploded during the COVID-19 pandemic.

According to the Pennsylvania Gaming Control Board, online betting raked in $2.18 billion in that state in 2024 alone. However, the lawsuit indicates much of that comes from misleading marketing that exploits consumers, upending their lives through gambling addiction.

“Plaintiffs bring this action because DraftKings is earning enormous amounts of revenue by misleading and addicting its users,” the lawsuit states. “DraftKings’s business model has long involved pushing the boundaries of the law, misleading consumers, and luring naïve gamblers into developing addictions.”

The lawsuit indicates DraftKings takes user data to create profiles of their activities, which the company then exploits by using what the company knows about them to goad them into further addictive gambling.

“DraftKings goes even further than this in knowingly targeting addicted gamblers,” according to the complaint. “The company frequently targets users that are on state self-exclusion lists for addicted gamblers or users who have directly asked the company to suspend or close their accounts to prevent them from continuing to gamble. DraftKings, nevertheless allows and actively solicits these users to gamble large sums of money despite knowing they are struggling to control their gambling addictions.”

The lawsuit claims the site uses a variety of promotions that appear to offer free bets and good deals, but are actually misleading, not truly being free, but roping the consumer deeper into gambling. In addition, the consumer often finds out their “winnings” were forfeited due to deeply buried terms in the promotions. When consumers ask for their money back, they are told they should have read the fine print.

One of the plaintiffs, Avi Setton, asked DraftKings to close his account in 2019 after realizing he had a gambling addiction problem. The website kept the account open, resulting in Setton losing more than $350,000 between 2020 and 2024. DraftKings finally closed the account in 2024, referencing the original request from four years earlier.

The plaintiffs seek class action status for both Pennsylvania users and those nationwide who participated in DraftKings or Golden Nugget Casino Deposit Match Promotions, “Risk-Free” or “No Sweat” bets and other promotions, as well as those who developed gambling addictions while using the website.

They present claims of negligence, Violation of Pennsylvania Unfair Trade practices and Consumer Protection laws, intentional misrepresentation, failure to warn, fraudulent inducement, unjust enrichment, intentional infliction of emotional distress and conversion.

April 2025 Sports Betting Addiction Lawsuit Update

Amid the growing evidence linking sports betting platforms to rising rates of addiction and financial harm, lawyers are now reviewing sports betting addiction lawsuits for individuals between the ages of 18 and 30, who developed gambling addictions and lost $10,000 or more after using sports betting apps like DraftKings, FanDuel, BetMGM and Caesars. 

These claims focus on users who were encouraged to place high-frequency bets, even after showing signs of addiction. Some continued to receive personalized incentives and marketing offers after requesting account closures or appearing on self-exclusion lists, raising serious concerns about how platforms exploit vulnerable behavior.

If you or someone you love suffered financial harm from compulsive gambling on these apps, a lawsuit may help recover losses and hold companies accountable for their addictive design and predatory targeting practices.