DraftKings, FanDuel Claim Sports Betting Apps Not Affected by State Policy

Baltimore City is currently battling to keep a sports betting lawsuit against the companies in state court, saying it could impact Maryland gambling policy.

The owners of DraftKings and FanDuel are trying to convince a federal appeals court to move a sports betting lawsuit by the City of Baltimore to federal jurisdiction, despite the city’s efforts to keep the case in state court.

In April 2025, the Mayor and City of Baltimore filed a lawsuit against FanDuel and DraftKings in the Circuit Court for Baltimore City, alleging the companies use tracking algorithms and aggressive marketing tactics to target vulnerable users, which in return causes compulsive, unsustainable gambling.The city’s lawsuit claims the two apps violate Baltimore’s Consumer Protection ordinance.

However, DraftKings and FanDuel have fought to remove the case to federal court since May, noting that neither site is headquartered in Maryland. In November 2025, a federal judge in the U.S. District of Maryland rejected their efforts, and the two companies appealed that decision to the U.S. District Court of Appeals for the Fourth Circuit.

Sports Betting Addiction Concerns

Maryland first approved online sports betting in 2021, resulting in a boom in online gambling, with state residents wagering more than $5 billion in fiscal year 2024. By January 2025, more than $457 million in bets were placed through DraftKings and FanDuel by users in Baltimore, according to figures cited in the original complaint.

The state is following a nationwide trend as sports betting sites, also known as sportsbooks, became legal after a Supreme Court decision in 2018, which left states to decide for themselves whether to allow the businesses to operate within their borders.

As sportsbooks have expanded, a growing number of critics say they have leaned more on aggressive and deceptive promotions as well as data-driven algorithms that track the behavior of gamblers. The sites then allegedly use that data to identify problem gamblers and bombard them with psychologically-tailored messaging to encourage more frequent and higher wagers.

In a growing number of sports betting addiction lawsuits filed nationwide, consumers, as well as state and local governments, allege these tactics are creating a surge in gambling problems, particularly among college-age users, leading to compulsive gambling, in addition to financial and emotional losses.

Baltimore Sportsbooks Lawsuit Update

In February, Baltimore filed a response brief to FanDuel and DraftKings’ appeal, calling for the Fourth Circuit to uphold the earlier decision to leave the case in state court. According to the brief, gambling regulation in Maryland falls under the jurisdiction of state police and impacts state policy, thus making it unfit to be moved to federal court.

However, in a reply brief (PDF) filed late last month, the two sports betting sites argue that their operations do not impact state policy, indicating their businesses are federally regulated and not under the purview of the Maryland Consumer Protection Act (MCPA).

The argument is increasingly being made by sports betting companies, which claim they can only be regulated at the federal level and, in some cases, assert they can operate even in states where sports betting remains illegal.

In the brief, the sports betting sites indicate they believe the cases will be resolved without ever interacting with state policy and believe those types of questions may not even come up.

“The City overlooks that this case can and will likely be resolved on any of various other grounds, before any hypothetical need to consider ‘interplay’ with state gaming regulations would arise.”

– Reply Brief of Defendants-Appellants, City of Baltimore v. DraftKings Inc. et al

It is unclear when the appellate court will make its decision.

Sports Betting Addiction Lawsuits

The results of the appeal may have broad implications as other states and individuals continue to file sports betting lawsuits nationwide, accusing platforms like DraftKings, FanDuel and others of using predatory practices to exploit consumers and foster addiction, particularly among younger users.

Sports betting addiction lawyers are investigating claims nationwide, focusing on whether these platforms intentionally foster compulsive behavior and profit from 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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