Online sports betting company DraftKings is facing a federal class action lawsuit for using exploitative marketing tactics.
Five people from Pennsylvia have launched a federal class action lawsuit against DraftKings, alleging that the betting firm used exploitative marketing on people struggling with gambling addictions.
Filed in the US District Court for the Eastern District of Pennsylvania, the lawsuit claims that DraftKings did not adhere to safe gambling practices, making money off those at risk of gambling-related harm.
Chicago-based civil rights firm Loevy & Loevy, on behalf of its five clients, makes specific mention of DraftKings’ “no sweat” bets that covered up its terms in the small print, as reported by local news site Go Erie. The lawsuit alleges that these bets were far from risk-free and actually targeted those who would be at risk of losing a lot of money.
One plaintiff is a schoolteacher from Pittsburgh with income of around $50,000 a year. They lost $134,000 on DraftKings, using all of their own funds and then asking for more from family and friends.
Another plaintiff has asked to close their account for good, only to reopen it and lose more than $350,000. Their gambling led to serious mental health conditions, like anxiety and post-traumatic stress disorder.
DraftKings allegedly used manipulative marketing tactics
All five plaintiffs claim to be vulnerable users, with one highlighting that he could continue using DraftKings even after joining Pennsylvania’s self-exclusion program.
The criticisms levelled at DraftKings claim that the gambling firm uses customer data to target those who are prone to gambling too much. The lawsuit suggests this tactic is careless and manipulative, against both ethical rules and state laws.
At the time of writing, DraftKings has not publicly responded to the lawsuit. It comes as Pennsylvania recently began consideration of a bill seeking to better protect customers in regulating skill games.
