Baltimore Fights Removal of DraftKings Lawsuit to Federal Court

Several cities and states are pursuing claims against major sports betting platforms over alleged predatory marketing tactics and app design practices intended to encourage excessive gambling.

The City of Baltimore is asking a federal appeals court to keep its lawsuit against sports betting platforms FanDuel and DraftKings in Maryland state court, arguing the case involves issues that could affect the state’s law and public policy.

The Mayor and City Council of Baltimore originally filed the lawsuit against FanDuel and DraftKings in the Circuit Court for Baltimore City in April, alleging the online sportsbooks used tracking algorithms and aggressive marketing tactics to encourage compulsive gambling behavior among consumers.

According to the complaint, the companies violated Baltimore’s Consumer Protection Ordinance by targeting vulnerable users who were showing signs of gambling addiction.

DraftKings and FanDuel later sought to move the case to federal court, prompting the appeal now before the U.S. Court of Appeals for the Fourth Circuit. In a response brief (PDF) filed late last month, the city urged the court to reject that request and allow the case to proceed in state court.

Gambling Addiction Concerns

Since the state approved online sports betting in 2021, Maryland has seen an explosion in online wagering, particularly in urban centers like Baltimore. In fiscal year 2024 alone, Maryland residents wagered over $5 billion on sports betting sites. By January 2025, more than $457 million in bets were placed through DraftKings and FanDuel by users in Baltimore, according to figures cited in the original complaint.

The companies, as well as other online gambling apps, face a growing number of sports betting lawsuits filed nationwide by individuals who say they developed gambling addiction due to the exploitative nature of the websites. Many of these users report racking up tens of thousands of dollars in losses and receiving repeated promotions even after requesting self-exclusion or help.

These lawsuits claim that the platforms ignored red flags and continued marketing to users who were clearly in distress. In addition, many claim the platforms engaged in false or misleading advertising through claims of “risk-free” promotions and “free bets” that turn out to have numerous strings attached.

In May, DraftKings and FanDuel had the Baltimore lawsuit removed to federal court, based on the fact that neither company is based in Maryland. DraftKings Inc. is based in Nevada, while Flutter Entertainment PLC, doing business as FanDuel Inc., is based in Ireland.

A federal judge rejected the removal, sending the lawsuit back to state court. However, DraftKings and FanDuel have appealed that decision to the Fourth Circuit, arguing that the case should be handled like a consumer protection lawsuit.

In its response brief, the city urged the appellate court to uphold the earlier verdict. The city indicates gambling regulation falls squarely in the jurisdiction of state police power. The response also notes that the city seeks civil penalties and injunctive relief, further differentiating it from a consumer civil lawsuit seeking compensatory damages.

“This case presents the paradigmatic scenario for federal deference: novel questions of state law at the intersection of consumer protection and gambling regulation—an area at the heart of state police power—where no court has addressed the issues presented and federal adjudication would disrupt Maryland’s efforts to establish coherent policy.”

– City of Baltimore

DraftKings and FanDuel Lawsuits

In addition to claims brought by states and municipalities, a growing number of sports betting addiction lawsuits have been filed by consumers in recent months against the two platforms. Many of the cases are brought on behalf of young adults and college-age users who say 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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