FanDuel Lawsuit Concerns Grow as Parlay Betting and Social Gambling Target Young Users

Parlay betting losses are rising among users, a trend critics link to social features like FanDuel’s Pass The Leg, which could encourage group wagering on complex bets.

As lawsuits and regulatory investigations increasingly focus on how the sports betting industry profits from gambling addiction, FanDuel’s aggressive promotion of parlay betting has emerged as a central point of scrutiny, particularly for its impact on young and inexperienced users.

Online sports betting has expanded rapidly across the United States as legalization spread state by state, transforming gambling into a smartphone-based, always-on activity. While the industry promotes convenience and entertainment, one betting product now sits at the center of sportsbook profitability and growing legal concern: the parlay.

FanDuel and other major platforms have heavily promoted parlays as an accessible way to bet on sports, while increasingly layering in social and gamified features that encourage frequent play. Critics argue these strategies obscure the true odds of winning, amplify losses, and make it easier for users to fall into patterns of compulsive betting.

Due to the growing impact, sports betting lawsuits are now being actively investigated against several competing sportsbooks, focusing on whether companies knowingly promoted high-loss betting products, failed to provide meaningful consumer protections, or used app design and social mechanics that encouraged excessive gambling behavior.

Why Parlays Are So Profitable for FanDuel and So Risky for Bettors

A parlay combines multiple individual bets into a single wager, requiring every leg to win in order to cash out. Each added leg dramatically reduces the odds of success, even as the promised payout grows larger.

For bettors, parlays often feel like low-risk shots at a big payday, especially when wagers start at just a few dollars. In addition, since betters often win several legs of a parlay before losing the bet, they are left with the feeling that they “almost” won. However, parlays are consistently one of the most reliable profit engines for the sportsbook industry, since the overwhelming majority of the bets lose.

A recent in-depth analysis by The Washington Post found that parlays now generate more than half of sportsbook revenue in some states, despite accounting for a much smaller share of total bets placed.

The report explained that sportsbooks maintain a significantly higher built-in edge on multi-leg wagers than on straight bets. As a result, bettors lose money on parlays at far higher rates, producing consistent and predictable profits for operators like FanDuel.

Parlay Revenue Has Surged Across the Sports Betting Industry

State betting data shows just how lopsided parlay economics have become. An industry breakdown published by CardPlayer found that in multiple legal sports betting states, parlays accounted for roughly 27 percent of wagers but generated approximately 56 percent of sportsbook revenue after payouts.

That imbalance explains why sportsbooks devote so much marketing real estate to parlays, from app home screens to broadcast ads during nationally televised games. Even small parlay wagers produce outsized returns compared to traditional bets.

As the Super Bowl approaches, that strategy becomes even more pronounced. Championship games draw millions of casual bettors, many of whom place their first wagers of the year on parlays tied to player props, touchdown scorers and game outcomes.

Industry commentary has also noted that parlays now dominate betting behavior across major sports leagues. A 2024 report discussing betting trends observed that parlays have become a central focus of sportsbook engagement, prompting calls for increased moderation and responsible-gaming oversight.

Young Adults Are Placing More Parlays — and Losing More Money

Multiple analyses indicate that younger bettors place a disproportionate share of their wagers on parlays, often underestimating how unlikely it is to win multiple legs. Experts warn that parlays are especially dangerous for new bettors because:

• Small wagers create a false sense of control
• Near-misses encourage repeat betting
• Losses accumulate quickly without obvious warning signs

Public health researchers have compared parlay betting patterns to known addiction pathways, where frequent losses are masked by occasional wins and escalating wager sizes.

FanDuel’s “Pass The Leg” Feature Pushes Parlays Even Further

In November 2025, FanDuel expanded parlay betting with the launch of Pass The Leg, a social betting feature introduced ahead of Thanksgiving NFL games. The company described Pass The Leg as a way for users to build parlays collaboratively with friends, with each participant contributing a leg before placing individual bets.

The feature was heavily promoted through in-app placements, digital advertising, social media campaigns and television ads tied to high-viewership NFL games. FanDuel also offered profit boosts tied to Pass The Leg wagers, further incentivizing participation.

Critics argue that social parlay betting amplifies risk by:

• Framing gambling as a shared group activity
• Encouraging longer, more complex parlays
• Adding peer pressure and social validation

Marketing Transparency and Responsible Gaming Questions

Despite the widespread promotion of parlay betting and social features, FanDuel has not disclosed how much it spends marketing these products. Its parent company does not break out advertising budgets by bet type or user demographic.

Consumer advocates say that lack of transparency makes it difficult to assess whether sportsbooks are adequately balancing profit incentives against responsible gaming obligations, particularly when marketing reaches younger audiences during major sporting events.

Could FanDuel Face Gambling Addiction Lawsuits?

As sports betting becomes more entrenched, legal scrutiny is shifting away from whether wagering should be legal and toward how betting platforms are designed and marketed.

Sports betting addiction lawyers are now evaluating potential claims that are increasingly focused on whether sportsbooks promoted high-risk betting products without adequate warnings, used gamification and social mechanics to increase compulsive play, and failed to implement meaningful safeguards for younger or vulnerable users.

Plaintiffs argue that this business model intentionally mirrors the neurological mechanics of addiction, relying on behavioral data, near-miss reinforcement and algorithmic prompts to maximize engagement while minimizing perceived risk. According to these allegations, sportsbooks prioritized retention and revenue growth even as evidence mounted that certain users were experiencing significant financial and psychological harm.

The lawsuits further contend that companies ignored warning signs and public health research, particularly as younger adults, who are neurologically more susceptible to compulsive behavior, became a primary growth demographic for mobile sports betting platforms.

Who Can File a Sports Betting Lawsuit?

Sports betting addiction lawsuits are being investigated on behalf of individuals who started using gambling apps at a young age, and suffered significant gambling-related losses, often exceeding $10,000, after using online sportsbook platforms such as:

• FanDuel
• DraftKings
• BetMGM
• Caesars
• Other platforms