Lawsuit Over DraftKings ‘No Risk’ Bet Promotions Cleared to Move Forward

Judge determined bettors can make a plausible argument in court that DraftKing’s “Risk Free” and “No Sweat Bet” promotions were deceptive.

A federal judge is allowing a DraftKings class action lawsuit to proceed against the sports betting platform, which must face allegations that its promotion of “Risk Free” and “No Sweat” bets are misleading, and promote gambling addiction.

The original complaint (PDF) was brought last January by Matthew Youngs in the U.S. District Court for the District of New Jersey, presenting damages from DraftKings Inc., Crown NJ Gaming Inc. d/b/a DraftKings, Resorts Atlantic City, and DGMB Casino LLC, as the defendants.

DraftKings is the most popular online sports betting website in the U.S., but it now faces a growing number of gambling addiction lawsuits, alleging that it is fostering addictions by manipulating consumers with pernicious algorithms and misleading promotions that are specifically designed to cause compulsive gambling behavior.

Among other claims of aggressive marketing tactics, consumers like Youngs have criticized the company for what they say are misleading “No Risk” sports betting promotions.

The complaints contend that DraftKings promotes offers that appear to provide free bets or attractive bonuses. Plaintiffs argue the ads can be misleading, claiming the bets are not truly free and may instead draw consumers into placing more wagers. They also say many customers later discover their “winnings” were forfeited due to terms buried deep in the promotion, and that requests for refunds are often met with reminders that they should have read the fine print.

According to Youngs’ lawsuit, DraftKing’s misleading “No Risk” promotions have led to the company “earning enormous amounts of revenue through misleading promotions and addicted users.”

The New Jersey man says he began using the site for its daily fantasy sports in 2016, when he was in his early 20s. However, after seeing promotions for the company’s new sportsbook deposit-match offers, he began participating in those as well.

Youngs indicates that he did not get his deposit matched in cash, but instead only got a portion of it in DK Dollars after making numerous wagers on sporting events. He seeks class action status for anyone who has lost money using DraftKings Casino Deposit Match Promotion.

DraftKings Motion to Dismiss Fails

DraftKings opposed the litigation, filing a motion to dismiss the lawsuit under numerous legal arguments. While he dismissed parts of the lawsuit dealing with other aspects of DraftKings promotions, U.S. District Judge Stanley R. Chesler issued an opinion (PDF) on November 19, allowing the claims over DraftKings “No Risk” promotions to proceed.

According to the opinion, DraftKings argued that consumers could not claim the advertisements were false because documentation existed on the site detailing how the promotions worked. Judge Chesler disagreed, ruling that just because such details existed does not mean the ads were not deceptive. He also rejected efforts to prevent the lawsuit from achieving class action status.

“DraftKings essentially argues that because the full terms and conditions were available somewhere, Plaintiffs cannot plausibly show the ads were deceptive and therefore unlawful. This Court disagrees and finds that for both promotions, Plaintiffs at least plausibly plead deception on the part of DraftKings, and therefore, plausibly plead unlawful conduct.”

– U.S. District Judge Stanley R. Chester

Judge Chester did dismiss charges against the company’s new customer bonus promotions and “no-sweat” promotions and dismissed a claim for injunctive relief.

Sports Betting Lawsuits

The opinion will allow Youngs’ lawsuit to move forward, joining similar lawsuits nationwide against operators of sports betting websites like DraftKings, FanDuel, BetMGM and Caesars.

These claims focus on college age users who were encouraged to place high-frequency bets, even after showing signs of addiction. Some continued to receive personalized incentives and marketing offers after requesting account closures, or appearing on self-exclusion lists, raising serious concerns about how platforms exploit vulnerable behavior.

If you or someone you love suffered financial harm from compulsive gambling on these apps, contact a sports gambling lawyer to see if you are eligible to recover losses and hold companies accountable for their potentially addictive design and predatory targeting practices.

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