DraftKings faces lawsuit from PHAI in Massachusetts

The lawsuit is in response to DraftKings’ $1,000 bonus sign-up promotion, which has been deemed as 'unfair.'

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The Public Health Advocacy Institute (PHAI) and its Center for Public Health Litigation have filed a lawsuit against DraftKings on behalf of citizens in the state of Massachusetts, US, who opened an account with the sportsbook following its $1,000 sign-up bonus promotion. 

The sportsbook launched in the state in March of this year and has been a part of the growth in sports betting revenue in the state. In October, alone DraftKings generated $33.5m, which was more than FanDuel and BetMGM combined.  

However, PHAI is now filing a lawsuit, due to the ‘unfair and deceptive’ nature of the DraftKings promotion. 

The details of the promotion were that, to receive the $1,000 sign-up bonus players would have to deposit $5,000. Then within 90 days players must place $25,000 worth of bets, a structure where: ‘it is inordinately expensive to obtain $1,000 and the new user is, instead, statistically likely to lose money by chasing the bonus,’ according to PHAI. 

Among the additional points made in the lawsuit, PHAI pointed out the addictive nature of gambling. Citing the DSM-5 and the World Health Organization, which put gambling addiction on the same level as drug or alcohol addiction, PHAI called the promotion unfair as: ‘marketers of a known addictive product should take special precautions to minimize addiction risk.’ 

Two citizens involved in the lawsuit are Melissa Scanlon and Shane Harris. On the matter, PHAI’s Executive Director Mark Gottlieb said: “Shane and Melissa are typical of many thousands of people in Massachusetts who were misled by the bonus offer and would not have signed up had they understood DraftKings’ unfair and deceptive requirements.”  

The case was filed under the name Scanlon et al. v. DraftKings. It concludes with a call for: ‘judgment awarding actual damages, including the $1,000 bonus promised in the promotion or statutory damages’ and ‘an award of double or treble damages, reasonable costs and attorneys’ fees.’ 

 

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