DraftKings Sued for ‘Risk-Free’ Marketing Language, Plaintiff Alleges Sportsbook Duped Consumers
Posted on: April 23, 2024, 09:24h.
Last updated on: April 23, 2024, 09:55h.
DraftKings is named as a defendant in a proposed class-action lawsuit filed in New York’s Southern District federal court for the sportsbook’s alleged deceptive marking practices.
Bronx resident Samantha Guery is the plaintiff and proposes on behalf of all others similarly impacted by DraftKings’ financial damages plus punitive and statutory compensation for claimed injuries inflicted by DraftKings’ deception. Guery’s attorneys allege DraftKings misled consumers by advertising “risk-free” first bets up to $1,000 that were anything but risk-free.
DraftKings deliberately did not communicate that customers availing themselves of the Risk-Free Bet promotion would only be credited with a Free Bet. The ‘$1,000 Risk-Free Bet’ offered … made no suggestion that the Risk-Free Bet would be turned into a Free Bet that was, in fact, far less valuable than the same figure in U.S. dollars,” the complaint read.
Guery’s proposed class-action lawsuit qualifies anyone who registered an account with DraftKings in New York and participated in a “risk-free” promotion. The litigation is seeking a jury trial.
Lawsuit Allegations
Guery signed up with DraftKings in July 2023 and made what she thought was a risk-free bet. The wager lost, and that’s when the plaintiff says she realized her money wasn’t simply going to be returned.
DraftKings instead credited Guery’s account with “free” bet credits in the same amount as her original losing wager. Her lawsuit contends that the credited money doesn’t function the same as cash on the sportsbook platform.
Free bet credits cannot be withdrawn until they’re wagered. A winning bet on a credit wager also only returns the net win in cash to the player, not also the credit that was used to place the bet.
In simpler terms, a $100 winning cash bet on -110 odds would return $190.91 to the player’s account. With a winning credit bet on the same line, the account would receive only $90.91 back in cash that would be available for withdrawal.
“The Free Bet is worth less than half of the initial bet,” the lawsuit explained. “The difference renders the supposed ‘risk-free’ promotion anything but risk-free.”
Guery’s attorneys say DraftKings knowingly deceived consumers by including the dollar symbol in its promotional materials while understanding that a free bet credit is unlike traditional money in its monetizing capabilities.
Marketing Crackdown
Sportsbooks have faced scrutiny in recent years from federal and state lawmakers, as well as gaming regulators, for misleading advertising. Numerous states now prohibit sportsbooks from running adverts that include wording like “risk-free” or “free bet.”
Last year, DraftKings was penalized $150K in Ohio for its “risk-free” language.
If something is claiming to be free or risk-free, then it has to absolutely not require the patron to incur any loss or risk their own money,” explained Ohio Casino Control Commission Executive Director Matthew Schuler. “We are not supportive of trying to put the truth in small print.”
In New York, state Attorney General Letitia James is also a critic of “risk-free” sportsbook advertising.
“New Yorkers have been bombarded with misleading ads … that claim ‘risk-free’ bets and ‘$1,000 welcome offers,’ which sound like free money but often come with strings attached without consumers’ awareness,” James said in a 2022 consumer alert.
Related News Articles
Maryland Sportsbook Requests to Ease Incentives Rules Denied
DraftKings Targeted in Class Action Lawsuit Alleging Deceptive Marketing
US Sportsbook Brand Leaders Scale Back Advertising Spend in 2023
Sportsbook Leaders Commission Poll on Nebraska Online Sports Bets
Most Popular
LOST VEGAS: Wynn’s $28 Million Popeye
MGM Springfield Casino Evacuated Following Weekend Blaze
Mark Wahlberg’s Latest Acting Role: Las Vegas Gym Operator
Mandalay Bay Already De-Delanoing for W Welcome
Most Commented
-
VEGAS MYTHS RE-BUSTED: The Final Resting Place of Whiskey Pete
October 25, 2024 — 3 Comments— -
DraftKings Upgrades Loyalty Plan, Unveils New Elite Program
October 22, 2024 — 2 Comments— -
VEGAS MYTHS RE-BUSTED: Tiger Attack Wasn’t Siegfried & Roy’s Fault
November 8, 2024 — 2 Comments— -
Massachusetts Sheriff Drove Cop Car to MGM Springfield Drunk, Missing Tire
October 7, 2024 — 2 Comments—
Last Comment ( 1 )
Come on now. She never bothered to read the terms, which are always referred to in all sports book promotions? If I'm on her jury, I vote caveat emptor. Next case.