How sportsbooks in the United States promote their products matters, as disgruntled punters are increasingly attacking gambling companies in courts
DraftKings is now facing three class-action lawsuits filed against the company because of what is alleged to be unfair and misleading promotional practices. The lawsuits specifically name the language used by the sportsbook in describing its promotions.
DraftKings “Risk-Free” Promotions Targeted in New Lawsuit
Wordings such as “no sweat first bets” are seen as misleading by the plaintiffs who have attacked the company across multiple state lines. One of the lawsuits was filed in New Jersey on January 7, 2025, by one Matthew Youngs.
Youngs, who has filed his lawsuit on behalf of others, has argued in his complaint that DraftKings is responsible for misleading customers and pushing them into financial losses, and in certain cases, into developing an unhealthy relationship with gambling – or gambling addition.
The use of “risk-free” in promotions is often misleading according to sceptics, who have said that in order to actually benefit from the “risk-free” promotion, you would need to first deposit, bet, and lose the money, which the company then repays but only as a credit, you can use to bet again.
In truth, DraftKings has followed a very standard practice adopted by all of its peers in the regulated sports gambling market. However, increasing challenges to this promotional gimmick have now led to a litany of lawsuits filed against not just DraftKings, but others too.
Apart from the lawsuit filed in New Jersey by Youngs, DraftKings has similarly been hit with two other cases in Illinois and Kentucky, filed also on January 7, 2025, and possibly part of a high-pressure strategy against the company.
For his part, Youngs claims that he has been a regular player at DraftKings and has suffered heavy losses due to what he alleges to be misleading terms of the promotions the company has adopted. Risk-free promotions are indeed a contentious point.
They are legal in the majority of states, but some state regulators are demanding that companies not use the term in the way they have. In other words, if a wager is risk-free, regulators argue, it should involve no financial risk on the part of consumers.
DraftKings Confident in Long-Term Company Success
Whether the latest trio of lawsuits will have any tangible success remains to be seen. In the meantime, DraftKings has taken a small hit in its Q4 results, registering losses, but remaining confident that it can come on top.
The company has also been experimenting with ways to motivate players to spend more money with it. A piloted subscription-based service offering odds boost is the newest feature the company offers in certain states, notably New York.
A previously pitched surcharge on player winnings ended up in flames after the community pushed back and competitors started releasing promotional materials taking a swing at DraftKings.
