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DraftKings Faces Class-Action Lawsuit Over Allegedly Deceptive Bonus Bet Advertising

DraftKings, a prominent sportsbook operator, is currently entangled in a class-action lawsuit that alleges the company engaged in 'unfair and deceptive' advertising practices concerning its $1,000 bonus bet offer for new customers. Filed by the Public Health Advocacy Institute on behalf of two Massachusetts residents, Shane Harris and Melissa Scanlon, the lawsuit contends that the promotion's wagering requirements are unrealistic and that marketing misled customers into believing a simple deposit was sufficient to receive the bonus funds.

DraftKings Faces Class-Action Lawsuit Over Allegedly Deceptive Bonus Bet Advertising

The suit argues that DraftKings' promotion violates Massachusetts sports betting regulations, asserting that the company had a duty of care to its customers, especially those new to sports betting, to ensure they were protected from the risks of problem gambling. According to the promotion's terms and conditions, customers are required to deposit $5,000 within the first 90 days of opening an account and place at least $25,000 in wagers to receive the full bonus amount.

The complaint filed by the Public Health Advocacy Institute stated, "DraftKings knew, or should have known, that its advertisement and promotion was deceptive to their target customers, who were new to sports betting and were extremely unlikely to understand the gambling lingo in the fine print."

Mark Gottlieb, the executive director of the Public Health Advocacy Institute, highlighted that the plaintiffs, Shane and Melissa, represent thousands of individuals in Massachusetts who may have been misled by the bonus offer, stating that they "would not have signed up had they understood DraftKings’ unfair and deceptive requirements."

This legal action follows a similar class-action lawsuit filed in Manhattan in October against fantasy sports operators DraftKings and FanDuel. The lawsuit accused both companies of 'negligence, fraud, and false advertising,' focusing on the alleged misrepresentation of daily fantasy games as fair. The complaint was based on the revelation that employees of both companies were allowed to enter contests on each other's sites for cash prizes, potentially giving them an unfair advantage due to access to analytics that aid in determining winning strategies.

DraftKings co-founder Paul Liberman previously acknowledged that some employees made more money through entering DFS contests on FanDuel than their salaries. However, an internal investigation found that no inside information obtained by staff could be seen as advantageous.

As legal challenges mount against DraftKings, the sportsbook operator faces increased scrutiny over its advertising practices and bonus promotions, signaling potential implications for the wider industry.


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