Court Rejects Class Action Lawsuit Against DraftKings

A New York Court just made a significant ruling over sportsbook advertising.

The Southern District of New York has dismissed a class action lawsuit filed against DraftKings Sportsbook over its welcome offer. Judge Denise Cote found that the advertising did not violate state or federal regulations and clearly communicated the appropriate information. 

The lawsuit argued that DraftKings used deceptive advertising around its welcome offer, which included a deposit bonus and “No Sweat Bet”. The plaintiffs felt they had been tricked into spending more money to claim the offer, echoing arguments from similar lawsuits filed since PASPA was overturned.

Judge Cote also highlighted the lack of specific examples in the lawsuit. While lawyers for the plaintiffs argue examples shouldn’t be needed due to the similarity between ads, the judge ruled that at least one example was required to back the lawsuit’s claim.

DraftKings had successfully defeated a similar lawsuit over the summer, which was cited in the decision to dismiss the current one. The pair of victories provides further confirmation that sportsbooks have become more careful in their advertising, closing a legal vulnerability that many have exploited over the years. 

Rulings Deliver Grim Reminder on Problem Gambling

While the decision to dismiss the lawsuit focused on the advertising of the offers, the ruling reminded us of a grim reality involving Problem Gambling.

In her ruling, Judge Cote cited a case from New Jersey that established that sportsbooks don’t have any responsibility to protect against problem gambling. While targeted advertising has strict regulations, operators don’t have any legal liabilities for accepting bets from people struggling with addiction.

While many operators choose to offer problem gambling resources and have protocols in place, their practice of actually limiting bettors makes it hard to know how effective they are. The industry has faced allegations over the practice from some regulations. They believe sportsbooks are almost exclusively limiting winning bettors to protect their revenue, while letting losing gamblers bet freely.

Regardless if the allegations are true, the ruling from Judge Cote delivers an important reminder of the role of sportsbooks in the fight against gambling addiction.