DraftKings Must Face Lawsuit Over Sports Gambling App Design

The court has rejected DraftKings’ attempt to immediately appeal a ruling that it must face a product liability lawsuit, after it was found the sportsbook app can be treated as a “product” under Illinois law.

A federal judge has cleared a class action lawsuit against DraftKings to move forward, after determining that the popular sportsbook can not pursue an immediate appeal of an early ruling that allowed plaintiffs to pursue claims over the design of the app under Illinois product liability laws.

In January 2025, a group of plaintiffs filed a DraftKings class action lawsuit (PDF) alleging that the company used misleading advertising for its so called “risk free bets” and “No Sweat First Bets.” The lawsuit claims the promotions failed to clearly disclose key restrictions, which many users say they only discovered after depositing money into the app.

The complaint further alleges that DraftKings illegally targeted underage customers to sign up and gamble, which critics say has contributed to the growing sports gambling crisis among young adults.

DraftKings sought to have the case thrown out early in the proceedings, claiming that the app does not qualify as a “product” under state-specific laws in Illinois. After the Court rejected that argument, DraftKings sought permission to immediately appeal the ruling, which would have delayed progress in the case for years. However, the Court has also rejected that request, clearing the case to move forward.

DraftKings Lawsuit Centers On Sportsbook App Design

DraftKings has grown to be the dominant sports betting app in the U.S. following a 2018 Supreme Court ruling in Murphy v. NCAA, which overturned the federal ban on national sports betting. Since then, 39 states and the District of Columbia have legalized sports betting, with 30 jurisdictions allowing gambling through platforms like DraftKings, FanDuel, BetMGM and Caesars.

However, consumers across the country point to aggressive marketing, misleading promotions and app features designed to encourage constant betting as evidence that companies like DraftKings prioritize profits over consumer protection. Many also allege the platforms use real time data to identify and hook problematic gamblers.

According to mental health experts, these tactics accelerate financial harm to consumers beyond the risks of traditional gambling, as in-game betting, instant deposits and constant push notifications allow losses to mount quickly, while live odds and promotions create an illusion of control that fuels repeated attempts to recover losses.

As a result, companies like DraftKings and FanDuel now face a growing number of DraftKings lawsuits, indicating the companies are manipulating consumers into gambling addictions that are both psychologically and financially devastating. Each claim alleges that the apps place profits well before consumer welfare and established gambling laws and restrictions.

The original DraftKings class action lawsuit was brought by plaintiffs James Beyer, Collin Smothers, Mateen Zafer and Corey Davis in Illinois state court in January 2025. It was then removed to the Northern District of Illinois, where it is now pending before U.S. District Judge Robert W. Gentleman.

After the Court denied DraftKing’s early Motion to Dismiss the lawsuit, a motion (PDF) was filed to certify an interlocutory appeal, which would halt the litigation while they challenged the ruling in a higher court.

In a court order (PDF) issued on February 26, Judge Gentleman rejected the request for the interlocutory appeal, indicating that for such an appeal to move forward prior to final judgment in the case, the question of law involved must impact a controlling issue, be contestable, and an issue whose resolution would speed up the litigation.

Judge Gentleman ruled that DraftKings’ interlocutory appeal request failed to meet that bar, saying the appeal’s outcome would not speed up the litigation. He explained in his ruling that the lawsuit involved four product liability claims, including:

• Design defect
• Failure to warn
• Negligent design defect
• Negligent failure to warn

The judge indicated that the appeal would not address the negligence claims.

“The court finds that interlocutory appeal does not promise to speed up the litigation. In addition to the likelihood of multiple layers of review, interlocutory appeal would fail to speed up the litigation for a more important reason: the question presented by defendants for appeal would resolve only two of the four products liability claims.”

– U.S. District Judge Robert W. Gentleman

Judge Gentleman ordered DraftKings to answer the complaint by March 18, 2026, with plaintiffs filing a joint status report by March 25.

Sports Betting App Lawsuits

The ruling comes as a growing number of sports betting lawsuits are being filed nationwide, particularly on behalf of young adults and college age users who claim they suffered significant financial losses after developing compulsive gambling behavior.

Sports gambling addiction lawsuits are being investigated for individuals between the ages of 18 and 30 who suffered significant financial losses after using online sportsbooks, often exceeding $10,000. Platforms named in ongoing investigations include:

Sports gambling lawyers are reviewing claims nationwide on behalf of young adults and college students who developed compulsive gambling behavior and experienced financial harm that may have been preventable.

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