FanDuel and DraftKings Lawsuits Updated To Seek Penalties for Marketing to Problem Gamblers

Companies may face additional liability under Massachusetts law after allegedly failing to respond to a demand letter seeking a reasonable settlement.

Two men pursuing illegal sports betting lawsuits against FanDuel and DraftKings have updated their complaints to include additional charges against the sportsbooks for intentionally marketing their products toward people with signs of problem gambling.

Originally filed in March, the sportsbook lawsuits were brought on behalf of Daniel Arroyo and Yanos Tewolde in Massachusetts Superior Court. The complaints named DraftKings Inc., Crown MA Gaming LLC, Flutter Entertainment PLC, Betfair Interactive US LLC and FanDuel Inc. as defendants.

Arroyo and Tewolde allege that, after placing small bets on DraftKings and FanDuel, they were targeted and encouraged to wager financially damaging amounts of money once the sites’ algorithms detected they were potential problem gamblers.

Sportsbook Gambling Addiction

FanDuel and DraftKings are only two of many online sports betting apps and websites that have risen to prominence after the U.S. Supreme Court made it legal for states to allow sports gambling. As states continue to legalize the practice one by one, sportsbook wagering has exploded, particularly among young people who are comfortable with digital payments through mobile apps on their smart devices. 

However, according to various plaintiffs nationwide, that growth has been fueled by platforms that take advantage of consumers through the use of aggressive promotions and data-driven algorithms that track behavior and tailor incentives to encourage more frequent and higher wagers.

As a result, a growing number of FanDuel and DraftKings gambling addiction lawsuits have been filed claiming that the platforms intentionally encourage compulsive and self-destructive gambling to raise their profit margins.

Online Gambling Marketing Allegations

Arroyo and Tewolde’s lawsuits indicate both started using the sites in 2023 and soon racked up significant debt and signs of gambling addiction. Once their gambling habits were noticed, instead of warning them, they say the websites exploited them.

The men began receiving special promotions, gambling credits, and were even assigned personal “VIP Managers” who offered them tailored promotions.

The original complaints presented claims for failure to warn, defective design, negligent design, negligent failure to warn, negligence, intentional misrepresentation and unjust enrichment. However, on May 15, both Arroyo (PDF) and Tewolde (PDF) submitted amended complaints that added a new claim for Unfair or Deceptive Practices under Massachusetts consumer protection law, alleging the companies recklessly marketed their services to problem gamblers.

The amended complaints indicate the plaintiffs sent the defendants written demand letters on April 8, 2026, as required under Massachusetts law before pursuing the unfair trade practices claims. The letters gave the companies 30 days to respond with a reasonable settlement offer, but the plaintiffs say no reasonable response was provided, clearing the way for the new claims.

As part of the expanded request for relief, Arroyo and Tewolde are now seeking double or treble damages, attorneys’ fees and litigation costs. Double or treble damages are a severe statutory penalty available under Massachusetts law when consumer violations are proven to be willful or knowing.

Sportsbook Gambling Addiction Lawsuits

Sports betting addiction lawyers anticipate that thousands of similar lawsuits 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.

Sportsbook gambling addiction lawsuits are being investigated nationwide, focusing on whether the apps intentionally foster compulsive gambling in order to profit from gamblers’ addictions. Platforms named in various sportsbook lawsuits and 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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