New York Lawsuit Alleging Fraudulent Practices Against DraftKings Dismissed
DraftKings Wins Dismissal of New York Class Action Lawsuit Over Sign-Up Bonus Claims
In a significant victory for DraftKings, a federal judge in New York has dismissed a consumer class action lawsuit filed against the sports betting giant. The lawsuit, led by Nerye Aminov, accused DraftKings of using a misleading $1,000 sign-up bonus promotion.
However, US District Court Judge Margo K. Brodie found that the promotional terms were clearly presented, including details that the bonus was “up to $1,000” and earned as users played. Thus, the court dismissed the lawsuit on the grounds that the plaintiff failed to show the promotion was deceptive in New York.
Judge Brodie also dismissed Aminov's other claims, including unjust enrichment and fraudulent inducement. The court case was a proposed class action against DraftKings, which had asked the court to dismiss the suit in its entirety.
While DraftKings has won this legal battle in New York, the company has faced related challenges elsewhere. In Connecticut, for instance, it agreed to refund $3 million to players due to misleading “risk-free” and deposit-match bonus claims. This settlement required refunds to about 7,000 consumers and commitments for improved marketing transparency and staff training.
DraftKings has also settled a separate lawsuit in New York involving a Pennsylvania psychiatrist relating to gambling addiction, but this was resolved out of court and dismissed with prejudice.
The terms of the settlement in the New Jersey lawsuit were not publicly disclosed, but it marked a resolution to a problem gambling-related lawsuit that DraftKings faced earlier this month.
The latest court ruling removes one legal headache for the sports betting giant, but it underscores the ongoing scrutiny and regulatory attention on DraftKings' marketing and bonus practices. The court noted that no reasonable consumer would expect to receive $1,000 simply for opening an account.
Judge Brodie also referenced bold text on DraftKings' deposit screen that explained the bonus terms. The sign-up bonus offer in question was a $1,000 deposit bonus, and the terms of the offer required a $5,000 deposit and $25,000 in bets within 90 days.
Despite these legal challenges, DraftKings has proven it can navigate such challenges while focusing on sustained, responsible growth. The company continues to expand its operations and offerings, aiming to provide an enjoyable and fair gaming experience for its customers.
Sports betting companies, such as DraftKings, are increasingly using technology to present promotional terms clearly, as seen in the New York lawsuit dismissal over sign-up bonus claims. Moreover, the ongoing regulation of sports betting industry ensures that companies uphold fair practices in their marketing and bonus offers, striving to provide an enjoyable and responsible gaming experience for sports enthusiasts.
