A class action lawsuit is proceeding after a Massachusetts judge denied, in-part, DraftKings’ motion for summary judgment.
Key Takeaways
- The class action suit filed in Dec. 2023 claimed DraftKings’ “$1,000 deposit bonus” campaign constituted misleading advertising and deceptive practices.
- DraftKings filed a motion for summary judgment, seeking to dismiss the suit.
- On Feb. 17, Massachusetts Judge Debra A. Squires-Lee denied most of DraftKings' motion, allowing the case to move forward.
In December 2023, the Public Health Advocacy Institute (PHAI) filed a class action lawsuit against DraftKings on behalf of the lead plaintiffs Melissa Scanlon and Sean Harris. The lawsuit claims that DraftKings failed to adequately disclose the terms and conditions associated with its “$1,000 deposit bonus” promotion.
To get the $1,000 bonus, new customers had to deposit a minimum of $5,000 and wager at least $25,000. Additionally, the bonus they received was a non-withdrawable site credit. The plaintiff’s claim that the terms and conditions of the bonus weren’t clearly disclosed.
In one case, a customer deposited less than $5,000 and was confused when they did not receive their $1,000 bonus. In a second case, a customer never received the bonus after making a deposit and wagering because he was deemed ineligible. Both lead plaintiffs made their deposits soon after the March 2023 launch of legal Massachusetts sports betting.
DraftKings filed a motion for summary judgment, seeking to dismiss the lawsuit. Last week, however, it was denied, for the most part, by Superior Court Judge Debra Squires-Lee. Summary judgment was allowed to dismiss the claim that DraftKings misused customer personal information. The claims of misrepresentation and false advertising, however, are free to legally proceed.
“The jig is up for DraftKings and its highly deceptive marketing play to lure new customers to wager tens of thousands of dollars chasing a bogus bonus,” PHAI executive director Mark Gottlieb said.
This is something of a victory for PHAI, but only in the sense that it is the first lawsuit alleging false advertising against DraftKings to make it this far in the legal process. The lawsuit, however, has a long way to go before a decision is rendered.
Prior to trial, the class needs to be certified. The certification process requires proof that a large number of people were similarly misled by DraftKings. Once certified, class-wide discovery will start. Discovery is a long and expensive process, often taking more than a year.
