DraftKings Faces Legal Challenge Over Bonus Offers in Pennsylvania

• DraftKings is currently facing a lawsuit in Pennsylvania concerning the language used in their bonus offers.
• The individuals encouraging others to join the lawsuit include a gambler who has self-excluded and someone who identifies as a gambling addict.
• The lawsuit claims that the language of the bonus was unclear and misleading to consumers.

In Pennsylvania, sports enthusiasts have initiated legal action against DraftKings, asserting that the terms of the company’s deposit bonus offer were ambiguous and challenging to comprehend, thus rendering it misleading.

Pennsylvania Emerges as the Latest Legal Arena for DraftKings

The lawsuit has been submitted to the Eastern Pennsylvania District Court, prompted by five users of the DraftKings platform within Pennsylvania who found the deposit bonus terms perplexing.

This legal action aims to pave the way for additional plaintiffs, potentially transforming it into a class-action lawsuit. The complaint challenges the marketing strategies employed by DraftKings, asserting that the company misled players into believing they could wager without any financial risk, which was not the case.

‘In reality, DraftKings has orchestrated a scenario benefiting only itself: the undisclosed terms of its promotions require users to deposit and gamble predominantly with their own funds, which they almost invariably lose,’ an excerpt from the lawsuit states.

In the United States, the manner in which companies have presented their bonuses has consistently faced criticism from both legislators and consumers. At the inception of regulated sports betting in the nation, many sportsbooks advertised their welcome bonuses as ‘risk-free,’ implying that the player would incur no financial risk.

However, upon closer inspection of the terms and conditions, it became evident that a player needed to deposit a specified amount and, if that amount was wagered and lost, the sportsbook would reimburse them – albeit not in withdrawable funds, but as bonus credits for future use on the site.

Significant Opposition to ‘Risk-Free’ Promotions in the United States

The current lawsuit also involves a plaintiff who was a VIP player and had been on the self-exclusion list since 2022. Nonetheless, this individual was able to register and play at DraftKings and Golden Nugget in 2024.

Another individual claimed they encountered DraftKings’ branding and advertising on social media, which led them to sign up. This plaintiff contends that this exposure has resulted in their current status as a gambling addict. DraftKings has encountered similar legal challenges in several other states, including Kentucky, New Jersey, New York, and Illinois.

The sportsbook is similarly accused of employing deceptive marketing practices, an accusation that DraftKings has refuted. Despite these issues, the use of ‘risk-free’ terminology in gambling advertisements has diminished across the United States, as sportsbooks have become cognizant of the backlash.

DraftKings has also been endeavoring to launch a dedicated prediction market to compete with platforms like Kalshi and Crypto.com, but these plans may now be on hold.