Not what they thought
DraftKings is facing a class-action lawsuit that contends that the Boston-based sportsbook operator misled its new customers by telling them their first bets would be “risk-free.” The lawsuit seeks unspecified damages for all DraftKings customers in New York who lost money through the promotional wagers.
DraftKings only allowed the user to keep the profit from using the bonus credit and not the stake
The ads promoting this offer said that users would get a free bet credited to their account if their first wager was a loser. Customers claim that the return that they received from using the free bet wasn’t even half of the winnings if they used cash to place the exact same bet as DraftKings only allowed the user to keep the profit from using the bonus credit and not the stake.
For example, if someone placed a $100 bet with cash on a winning selection that had even odds, the return would be a $100 profit and they would also get the $100 stake back. With the risk-free offer, the $100 bonus bet would yield them the $100 profit and they would not get the stake back.
Confusing language
Samantha Guery, who filed the lawsuit in a New York federal court, claims that DraftKings’ intention with the promotion was to try to attract unsophisticated or new bettors who were likely to lose their funds as the “risk-free” terminology could help people who have a “natural resistance” to betting overcome this barrier.
claims that this violates New York’s business laws and advertising regulations for gambling operators
It was only after people created new accounts and made their first wager that they realized their funds were actually at risk. The plaintiff claims that this violates New York’s business laws and advertising regulations for gambling operators.
Not an isolated issue
The complaint outlines how numerous US states, including Massachusetts and Ohio, have tightened up regulations about sportsbooks’ use of potentially misleading language like risk-free in their ads.
DraftKings is already facing another class-action lawsuit related to a different type of sign-up offer. The complaint in Massachusetts from December claims that a $1,000 welcome bonus was misleading due to the extensive wagering requirements for people to convert the bonus into real money.