DraftKings Faces Another Lawsuit, FanDuel Fights Dismissal

Imagine DraftKings hit yet again by a class-action lawsuit, while FanDuel scrambles to dodge another explosive claim.

That’s the reality across the U.S. iGaming landscape, where major operators face fresh accusations of deceptive promotions and questionable responsibility.

Picture bettors claiming they’re lured by “risk-free” deals, while a former NFL employee demands accountability for fueling his addiction.

Read on to uncover these evolving legal showdowns that challenge America’s leading sports betting giants.

DraftKings, FanDuel Under Fire: New Lawsuits Target Promotional Tactics and Legal Conduct

3 Key Points

1. DraftKings faces a class-action in New York alleging misleading promotions such as “Risk-Free Bets.”
2. FanDuel seeks to dismiss a suit from Amit Patel, arguing he can’t claim damages given his embezzlement past.
3. Both operators risk heightened regulatory scrutiny and potential damages from mounting consumer and legal challenges.

DraftKings Faces New Class-Action Lawsuit in New York

DraftKings and its subsidiary, Crown NY Gaming LLC, have been sued by Clara De Leon and Eric W. Mirsberger Jr. on behalf of similarly situated plaintiffs in the Southern District of New York. This class-action accuses DraftKings of running deceptive advertising campaigns and exploiting problem gamblers through promotions billed as “Risk-Free Bets” and “Deposit Matches.” But once users bet, they discover ambiguous terms that undermine the supposed “risk-free” perks.

Claims of Misleading Ads and Targeted Promotions

Plaintiffs argue DraftKings’ promotions seduce vulnerable users, especially those with gambling addictions, to deposit more. According to the lawsuit, if a punter loses a “risk-free” wager, they do not receive a genuine monetary refund. Instead, they get “Bonus Bets.” From the plaintiffs’ view, that’s a cunning tactic to keep them engaged without the actual benefits pitched in promotions.

DraftKings is also accused of manipulating user data to pinpoint customers showing addictive behavior. Allegedly, these identified customers are assigned “VIP Hosts” who nudge them to place higher bets, fueling irresponsible gambling.

Extended Financial and Emotional Harm

Between 2017 and 2018, the lead plaintiff RTM (from a previous lawsuit) lost over £31,000 in wagers on DraftKings, drastically exceeding his means. Now, De Leon and Mirsberger say they too experienced similar manipulations. Each contends that hidden or misleading deposit match rules further trapped them in repetitive betting cycles.

From DraftKings’ perspective, these promotions align with consumer preference for free bets and fun experiences. But lawsuits call that justification hollow, labeling it a “focus on profit over consumer well-being.” The class action demands regulatory intervention, with plaintiffs seeking damages for alleged contraventions of New York’s consumer protection laws.

FanDuel Fights to Dismiss Lawsuit from Amit Patel

While DraftKings navigates a fresh storm, FanDuel is urging the courts to reject an ongoing lawsuit lodged by Amit Patel, a former Jacksonville Jaguars employee. Patel, who embezzled $20 million from his team, claims FanDuel allowed and profited from his excessive betting habit.

Criminal Conduct and Legal Challenges

FanDuel insists Patel’s wrongdoing—his embezzlement— invalidates his quest for restitution. It points to Florida’s wrongful conduct rule, which bars criminals from seeking damages arising from their own illicit acts. Further, FanDuel denies wrongdoing or a duty of care owed to Patel, emphasizing that they had no direct involvement in how he obtained his betting funds.

Patel contends that FanDuel heavily encouraged his gambling with VIP promotions, ignoring signs of problem behavior. He states that countless deposit and spending anomalies suggested something was amiss. According to him, FanDuel turned a blind eye, focusing on profits from his significant wagering. However, FanDuel counters that any alleged misconduct was Patel’s, not theirs.

Dismissal Motions and Future Implications

The operator’s legal team has now filed a motion for dismissal, stating that the claims are without legal basis and fail to establish direct liability. Patel also named Flutter Entertainment, FanDuel’s parent company, but FanDuel argues the suit lacks jurisdiction over Flutter. Meanwhile, Patel withdrew claims against Fox Corporation and Boyd Gaming.

Both these lawsuits highlight how the industry’s operational practices—like promotional structures and deposit flows—are coming under legal scrutiny. As states regulate, operators in the US face heightened liability from at-risk or problem gamblers, fueling calls for stronger responsible gaming measures.

While DraftKings battles a class-action for alleged “Risk-Free Bet” manipulations, FanDuel aims to dismiss a contentious suit from a convicted embezzler. The swirl of legal challenges signals a pivotal moment for the US gambling sector. Increasingly, plaintiffs accuse top operators of ignoring or exploiting customers’ vulnerabilities, raising questions about consumer safeguards. Whether or not these lawsuits succeed, they underscore the intensifying tension between marketing tactics and the ethical imperative to protect bettors from harm.