‘Risk-Free’ Bets Trigger Class-Action Lawsuit Against DraftKings

Complainant seeking unspecified damages for other New York customers who lost "risk-free bet" that would become less valuable free bet.

Apr 18, 2024 • 14:47 ET • 4 min read
Photo By - USA TODAY Sports

A lawsuit filed Wednesday in New York federal court accuses DraftKings of misleading new customers into believing their first wager would be risk free. 

Samantha Guery filed the complaint and is seeking unspecified damages on behalf of other DraftKings customers in New York who lost their risk-free bets, according to Bloomberg.

The complaint said that “after DraftKings lured users into opening accounts based on the promise of Risk-Free Bets, many new users discovered their money was indeed at risk.”

Certain ads promised customers that if they lost their supposed “risk-free bet,” they’d be credited with a “free bet.” The catch though is that customers would’ve made twice as much placing the same wager with cash than they did with this credit. 

DraftKings allegedly wasn’t transparent with customers that this risk-free bet would actually become a less valuable free bet. 

Same song, different (state)

This problem arose for the sports betting operator in another prominent legal sports betting jurisdiction in recent memory, and unfortunately, it was in DraftKings’ own backyard. 

The Public Health Advocacy Institute (PHAI), based out of Northeastern University in Massachusetts, and its associated Center for Public Health Litigation brought a similar suit against DraftKings in December. This lawsuit alleged that DraftKings customers were unaware they needed to deposit $5,000 and gamble $25,000 via bets of -300 or longer within 90 days - or an average of more than $276 per day - to qualify for a $1,000 sign-up bonus.  

It’s another class action lawsuit against DraftKings that seeks damages for the lack of transparency of what the promotion actually meant. 

“DraftKings knowingly and unfairly designed its promotion to maximize the number of consumers that would sign up for its sports gambling platform, the number of bets that would be placed through the platform, and the amount of money that would be placed on bets through its platform,” the lawsuit alleges. 

DraftKings told Covers in December that it “respectfully disagrees with the claims and allegations made by the Public Health Advocacy Institute” and plans to defend itself in this case. 

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