DraftKings ‘Risk-Free’ Bets, Other Promotions Instilled Gambling Addiction: Lawsuit

Pennsylvania players say they were duped by misleading bet promotions that appear to be safe, but were actually designed to be enticing and addictive.

A DraftKings class action lawsuit has been filed that raises claims that the poplar sports betting platform, and its “risk-free” and “no sweat” promotions, are engineered to create costly gambling addictions in consumers.

The complaint (PDF) was brought by five different plaintiffs in the U.S. District Court for the Eastern District of Pennsylvania on July 15, seeking class action status for all Pennsylvania customers, to pursue damages from DraftKings, Inc., Crown PA Gaming Inc, and Golden Nugget Online Gaming LLC, who are named as defendants.

Like many states, Pennsylvania legalized online gambling in October 2017, and by 2024, online casino revenue had surpassed $2 billion, with DraftKings leading the market and accounting for $510 million.

With the rapid expansion of legalized online sports betting across the U.S., growing concerns have emerged about the predatory nature of these platforms, which often feature app designs and marketing strategies aimed at young, financially inexperienced users. Critics warn that these tactics have led to widespread financial harm, with some individuals losing thousands of dollars in a short period of time before recognizing the addictive nature of the platforms.

Amid increasing evidence of the online platforms intentional designs, sports gambling addiction lawsuits are being pursued by users in several states, alleging that DraftKings and similar sites target vulnerable users and exploit individuals showing clear signs of addictive behavior.

In the DraftKings lawsuit brought earlier this week by Kenneth Macek, Matthew Harner, Avi Setton, Lionel Alicea and Robert Walker, plaintiffs claim DraftKings has profited from deceptive advertising suggesting players will get free money and easy wins, while roping them into a system that uses sophisticated algorithms and player data to increase compulsive gambling behaviors.

“DraftKings attracts new customers and keeps existing customers coming back by advertising an all-upside gambling experience, falsely promising customers that they will get free money that they can wager without any risk. In reality, DraftKings has created an all-upside opportunity only for itself: to obtain the promised cash bonus, the hidden terms of its promotions require customers to deposit and gamble their own substantial funds that they almost always lose.”

–Kenneth Macek et al. v. DraftKings, Inc. et al

The lawsuit highlights the site’s promises of “Risk-Free” and “No Sweat” bets, noting that those connotations are not true, as DraftKings requires players to deposit funds into the site to cover their bet and does not return the money if they lose while playing these supposedly safe games. Instead, the company gives the players a “Bonus Bet” which cannot be withdrawn and must be spent on future bets.

Even when gamblers win a bet, the lawsuit notes that DraftKings takes 9% as its take, so consumers never get their full “risk free” deposit back.

Plaintiffs say there are numerous similar games constantly being promoted by the website as low-risk bets, such as Casino Deposit Match promotions.

The complaint also claims that many customers have suffered financial losses due to these deceptive promotions, which DraftKings continues to use. It suggests the company may be deliberately misleading users because it profits heavily from those it has already exploited.

The lawsuit presents claims of violating Pennsylvania’s Unfair Trade Practices and Consumer Protection Law for misleading and deceptive advertisements, intentional misrepresentation and unjust enrichment.

DraftKings Gambling Addiction Lawsuits

This class action lawsuit echoes broader concerns that companies like DraftKings have prioritized profits over consumer protection, using real-time data to identify users showing signs of compulsive behavior. 

Instead of implementing safeguards, or supporting those at risk, the platforms allegedly target vulnerable users with personalized promotions, loyalty rewards and psychological tactics that normalize betting while hiding its financial risks, efforts made more troubling by the industry’s aggressive lobbying against sports betting safeguards.

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 25, who developed gambling addictions and lost $10,000 or more after using sports betting apps like DraftKings, FanDuel, BetMGM and Caesars. 

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.

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