Baltimore Files Lawsuit Over DraftKings and FanDuel Marketing Tactics

The Charm City is about to go to battle.

The city of Baltimore has filed a lawsuit against DraftKings and FanDuel over their marketing tactics. The town alleges that industry leaders use deceptive and misleading tactics to get people to bet on sports. This is fueling the rise in problem gambling, and the city is done waiting for the state to take action.

The 100+-page lawsuit also accuses the operators of using algorithms to target bettors who are wagering most often. The problem is that people struggling with gambling addiction fall into this category and face barrages of ads and promos to ensure they keep gambling.

The lawsuit comes as Maryland’s sports betting market continues to grow. Over $13 billion has been wagered since the market went live on December 21. This has generated around $150 million in tax revenue, but Baltimore doesn’t believe this cost is worth the damage on residents.

FanDuel is facing a similar lawsuit from an ex-Jaguars employee who claims the operators’ marketing tactics forced him to gamble beyond his means.

Who is in Charge of Regulating the Industry?

Every state is in charge of launching and regulating its sports betting industry. However, city and federal governments are now pushing to take over some regulatory control. 

Baltimore’s lawsuit could further change the dynamic between the three levels of government. However, you can expect these operators that the city doesn’t have the right to enforce regulations on marketing. How the case is settled could further determine cities' power over sports betting.

The country is also heading toward a showdown between federal and state regulators over sports prediction markets. States are suing to shut the controversial industry down, but the Commodity Futures Trading Commission (CFTC) is the top regulator for the industry. The CFTC helped launch March Madness prediction Markets last month and could override state resistance.

While both battles concern different areas, they will set a clearer precedent regarding the power level of cities, states, and federal regulators.