DraftKings, FanDuel Face Lawsuits Over Gambling Losses Caused by Addictive Designs

A series of complaints were recently filed, which could be among the first of thousands of sports betting lawsuits against FanDuel and DraftKings, seeking to hold the sportsbooks accountable for target vulnerable young adults.

FanDuel and DraftKings face three lawsuits brought last week in Massachusetts state court, each raising nearly identical allegations that the popular sports betting apps should have detected that users were falling into addictive gambling patterns, yet instead of providing assistance or warnings, “VIP” managers were assigned to each of the plaintiffs to push them deeper into debt and losses.

The complaints were filed by Daniel Arroyo (PDF), Joseph Santaniello (PDF) and Yanos Tewolde (PDF) in the Commonwealth of Massachusetts Superior Court on March 26. They each name DraftKings Inc., Crown MA Gaming LLC, Flutter Entertainment PLC, Betfair Interactive US LLC and Fanduel Inc as defendants.

All three men say they initially placed small bets on DraftKings and FanDuel, but were later encouraged to wager amounts far exceeding their actual incomes, leading to significant financial harm. Their experiences reflect a growing number of similar accounts nationwide, particularly among young adults, who allege that online sportsbooks rely on opportunistic algorithms designed to promote compulsive gambling behavior.

DraftKings, FanDuel Gambling Addiction Concerns

Sports betting sites, also known as sportsbooks, have expanded significantly in the United States since being legalized in 2018, with individual states continuing to decide whether residents can participate and be marketed to by the advertising.

With the expansion has come increases in gambling addiction problems nationwide, particularly among young people who are comfortable with digital payments through mobile apps on their smart devices. Critics accuse platforms like DraftKings and FanDuel of taking advantage of users, by pushing aggressive promotions and data-driven algorithms that track behavior and tailor incentives to encourage more frequent and higher wagers.

The owners of these apps are now facing a growing number of sports betting addiction lawsuits that argue the betting platforms intentionally encourage compulsive gambling and self-destructive wagering to increase their profit margins.

March 2026 Sportsbook Allegations

The three men share very similar tales of starting with small bets after being bombarded constantly with promotions, and then finding their bets creeping higher and higher in amount and frequency. They each go on to claim they were manipulated into gambling debts by sophisticated algorithms and promotional psychology that far outstripped their ability to combat it as individuals.

Arroyo began using FanDuel and DraftKings in 2023, when it was legalized in Massachusetts, starting with “small, recreational bets” while watching sporting events. His lawsuit notes that his gambling pattern did not stay that way but instead grew voraciously.

By the end of 2023, Arroyo had placed $196,639 in wagers, about twice his pre-tax income at the time. In 2024, his wagers jumped exponentially, to more than $1.3 million. Last year, he wagered in excess of $1.5 million, which the lawsuit notes was more than 15 times his income at that time. After that, he left his job to gamble full time, resulting in nearly $200,000 in total losses and a gambling addiction diagnosis.

Santaniello also began using FanDuel and DraftKings in 2023, having experience making sportsbook bets sporadically using offshore companies. Since he began using the two sites, those bets stopped ceasing to be sporadic, and he has since placed about $5 million in wagers, primarily on DraftKings.

“Plaintiff, as the consumer of Defendants’ respective products, did not expect the products to be psychologically and neurologically addictive, far beyond that which might be expected from non-online gambling and/or non-online sports betting when the products are used in their intended manner by their intended audiences.”

– Joseph Santaniello v. DraftKings Inc. et al

Tewolde, by comparison, had never placed sports bets before encountering FanDuel and DraftKings in 2023, though he was a long-time sports fan. He began making bets through the mobile apps while watching games.

Shortly after Tewolde started wagering on the apps, they began sending him special promotions and gambling credits, coaxing him into betting more than $4,000,000 on DraftKings alone, along with another $183,000 on FanDuel. These amounts far exceeded his income, his lawsuit states.

All three men indicate that once the apps observed their gambling habits, they began receiving special deals and were all assigned a personal “VIP manager” whose job appeared to be to offer tailored promotions designed to increase their rate and amount of wagering. All three say it worked, much to their detriment.

The plaintiffs indicate that the platforms easily could have identified them as problem gamblers and, instead of suggesting help or providing guardrails, the apps encouraged them to suffer catastrophic financial losses using advanced psychological marketing efforts that they knew would lead to addiction.

Arroyo, Santaniello and Tewolde present claims of failure to warn, defective design, negligent design, negligent failure to warn, negligence, intentional misrepresentation and unjust enrichment.

Gambling Addiction Lawsuits

These are some of the first individual gambling addiction lawsuits filed against the two sports betting apps. Most previous claims have challenged the apps’ operating legality or were class action lawsuits.

It is expected that thousands of similar claims will be filed in the coming months and years by consumers nationwide who have found themselves facing severe financial losses due to predatory algorithms and promotions used by FanDuel, DraftKings and similar online sportsbooks.

Sports betting addiction lawyers are investigating claims nationwide, focusing on whether these platforms intentionally foster compulsive behavior and profit from users’ escalating losses. Platforms named in ongoing investigations include:

To find out whether you qualify for a sports betting lawsuit, submit information about your potential claim for an attorney to review. All cases are handled on a contingency fee basis, meaning you pay nothing unless a settlement is obtained in your case.

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